Nobel Prize winner doesn’t have the answers either

Nobel Prize winner doesn’t have the answers either

PES organizes lecture from Nobel Prize winner

01-12-2022 · Background

MAASTRICHT. In the struggle against climate change, should all investors switch to green shares, which may have a lower return than ‘regular’ shares? Or is it better to take those higher profits and then invest the money in green research? It is one of the dilemmas that was discussed in the Statenzaal at the Faculty of Law last Tuesday evening. Professor Lars Hansen, Nobel Prize winner for Economic Sciences in 2013, gave a livestream lecture from his study at the University of Chicago.

Answers to the above questions are impossible to give at this moment, says Hansen. The reason is uncertainty. That is the main subject of his lecture. Uncertainty especially about climate change. “Exactly how the world will change, which economic opportunities will arise, and which political decisions will contribute most to the maximisation of people’s social well-being, is still unclear.” But one thing is certain, said the professor: “Waiting until all uncertainties have become clear, is not an option. Something has to be done now; with the risk that the decisions are not optimal.” It is the most important message that Hansen wants to give the students this evening.

During his presentation, Hansen shows a number of slides. One is about the well-known tipping point: the moment when the earth has warmed up so much that there is no way back. But where does that point lie? At 1.5 degrees? Or at two? “This is a source of uncertainty too. Also, how great will the damage be exactly in that case?”

After the presentation, there is time for questions from the audience. The host from the Political Economy Society Maastricht, the suprafaculty study association and organiser of the evening, throws a microphone cube to anyone who wants to ask a question. One is about the Amazon rain forest in Brazil, where large-scale deforestation takes place to create agricultural land, while this area is considered to be ‘the earth’s lungs’. The forest absorbs a great deal of carbon dioxide and emits oxygen. “Stopping deforestation is good for the world, but bad for Brazil,” the student says. “How could one ensure that it would also be better for Brazil to stop deforestation?” Professor Hansen refers to what he said during his lecture. “This is a good example of a situation in which the social cost for Brazil is higher than that for the world. An option to put this right, would be to compensate the difference, so when money from the rest of the world goes to Brazil.”

“What do you think when people say that they have no influence whatsoever on the climate?” someone in the audience asks. Hansen: “Scepticism is very important in science. I am open to having those options included in the discussion. Put it on the table.”

Author: Yuri Meesen

Photo: Enrique via Pixabay

Tags: Nobel Prize,Nobel Prize winner,climate change,law faculty,statenzaal

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