ALBERT

Description: Sustainability, Vol. 9, Pages 1858: Natural Resource Economics, Planetary Boundaries and Strong Sustainability Sustainability doi: 10.3390/su9101858 Authors: Edward Barbier Joanne Burgess Earth systems science maintains that there are nine “planetary boundaries” that demarcate a sustainable, safe operating space for humankind for essential global sinks and resources. Respecting these planetary boundaries represents the “strong sustainability” perspective in economics, which argues that some natural capital may not be substituted and are inviolate. In addition, the safe operating space defined by these boundaries can be considered a depletable stock. We show that standard tools of natural resource economics for an exhaustible resource can thus be applied, which has implications for optimal use, price paths, technological innovation, and stock externalities. These consequences in turn affect the choice of policies that may be adopted to manage and allocate the safe operating space available for humankind.

Description: Sustainability, Vol. 10, Pages 13: Innovative Corporate Initiatives to Reduce Climate Risk: Lessons from East Asia Sustainability doi: 10.3390/su10010013 Authors: Edward Barbier Joanne Burgess Businesses, investors, and insurers are requiring better quantitative assessments of their exposure to climate risks and their impact on climate change. They are incorporating these assessments in their day-to-day management and long-term investment decisions. Already, there are efforts to develop international guidelines, common policies and legal frameworks for such assessments, as well as the desire to foster climate financing. We examine recent progress in East Asia and the rest of the world in setting targets, pricing policies, and other mechanisms to reduce climate risks. We develop a model that demonstrates how reduced climate risk management may lower the total cost of capital of firms, thus making them more attractive to investors. We discuss the additional policies needed to support improved climate risk management in investment decisions, private investments in climate science, technology and innovation (STI) expansion, and more widespread adoption of climate financing and principles. Central banks, financial authorities, and governments can advance this objective by creating financial incentives to support investment decision-making. This would take into account factors such as improving climate performance, establishing better climate risk management and reporting requirements to foster green STI, and developing international guidelines and common policy and legal frameworks to support better climate risk management, assessments and reporting.