Mobilizing economic research against climate change

The 25th United Nations Climate Conference (COP 25) has just ended in Madrid without any significant progress in terms of international coordination aimed at combating global warming. However, the latter is becoming more and more pronounced, as shown by the multiplication of natural disasters in 2019 in the wake of previous years. As a result, the 2010—2019 decade is the hottest decade ever recorded since meteorological records began in 1850.

Despite this irrefutable scientific evidence, to the dismay of climate skeptics, the growing mobilization of civil society, especially young people, and the declarations of intent of large companies, the Business as usual is continuing and the goal of limiting global warming to 2 degrees by the end of the century is in jeopardy. To reverse this bad trajectory, the contribution of excellent scientific research is essential and must be further promoted.

Precisely, at the Louis Bachelier Institute (ILB), our ambition is to contribute to sustainable growth and finance with the contribution of excellent French scientific research, with the following motto:” Together, let's find solutions for a world in transition ”. In fact, there is no doubt that the major challenge of the 21st century represented by global warming cannot be contained without strong synergies. It is with this in mind that the interdisciplinary program Green and Sustainable Finance was launched in 2018. Its objective is to bring together the French and foreign academic community on issues related to financing the environmental transition. It can also rely on the numerous research studies emanating from chairs hosted at ILB, such as the Climate Economics Chair, the Sustainable Finance Chair and Responsible Investment, the Finance and Sustainable Development Chair or even the Energy & Prosperity Chair.

This new issue of Cahiers Louis Bachelier provides a non-exhaustive overview of scientific research recommendations for achieving a low-carbon transition and sustainable finance. It starts with a major interview with Christian de Perthuis, who looks back on his recently published book. The ticking of the climate clock. The second article is devoted to the work on carbon pricing by Christian Gollier, who also published an astonishing book this year: The climate after the end of the month. The third article summarizes the work Detox Finance, written by Stéphane Voisin and Jean-Baptiste Bellon, which proposes several remarkable solutions for finance to become greener and more sustainable. Finally, the last text discusses work by Peter Tankov on the lack of reliable data to assess physical climate risks financially.

Happy reading!

Ryadh Benlahrech, editor-in-chief of Les Cahiers Louis Bachelier

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