Beyond Partial Explanations: Oil, Capital, and the Global Financial Crisis of 2008
Authors: Giorgos Kallis, Jalel Sager
Abstract: In this review we parse several leading economic explanations of the oil price spike in the years leading up to the 2008 crises, dividing them into two basic groups: explanations that begin with the global financial system and its impact on oil prices, and those that take physical oil supplies as their point of departure. We do not find the evidence for oil as a primary causal factor in the global economic crisis unequivocal. The two categories of explanation we review, monetary and supply, have complementary aspects that suggest they may be pieces of a larger picture. Whether one focuses on global imbalances, “easy money,” or pegged currency blocs—or on increasing global oil demand—an integrative answer that slots these explanations into a coherent whole seems within reach. In conclusion, we argue for a view of the economy that handles complexity and systemic causation in a more nuanced way.
Impact of economic recession on carbon emissions: A cross-national empirical analysis
Authors: Qinglong Shao, Giorgos Kallis
Abstract: Previous researches on economic recession mainly focus on economics and finances, fewer studies discuss the impact of economic recession on carbon emissions. In this study, we employ panel regression and other advanced methods, to comprehensively investigate the impact of economic recession on carbon emissions among 157 economies all around the world, during the years 1960-2013. Findings show that: the first, generally speaking, de-carbonization begins one year before the recession, and keeps de-carbonized until three years after the recession. However, most of the recessions are only relatively de-carbonized, absolute de-carbonization are rarely seen; the second, economic recession is the most essential determinates to de-carbonization; lastly, the correlations for developing economies are significant than developed counterparts, and the reduced income caused by recession is a major factor to de-carbonization. We contribute to a further understanding of the impact of economic recession on carbon emissions under various quantitative approaches.
Financialisation and sustainability: an evolutionary perspective
Authors: Alessandro Vercelli
Abstract: This paper analyses the nexus between financialisation and sustainability from an evolutionary viewpoint. The historical evidence suggests that the process of financialisation may be seen as a long-run tendency characterizing the evolution of market relations. This trend, however, has been often restrained by constraints of religious, ethical and political nature. This conflict produced an alternation of periods characterized by financial repression, as in the Bretton Woods era, and periods characterized by the systematic relaxation of financial restraints leading to an acceleration of financialisation, as in the neoliberal era started in the 1980s. The compatibility between financialisation, that seeks the relaxation of constraints on economic decisions, and sustainability requisites setting crucial economic, social, and environmental constraints, is in principle problematic. The paper shows that the interaction between economic, social and environmental unsustainability within the existing financialisation trajectory caused the Great recession. The time has come to establish a sustainable development trajectory.
Transition to a low-carbon economy
Authors: Giovanni Bernardo, Simone D’Alessandro
Abstract: This paper analyses different policies that may promote the transition towards a low-carbon economy. We present a dynamic simulation model where three different strategies are identified: improvements in energy efficiency, the development of the renewable energy sector, and carbon capture and storage. Our aim is to evaluate the dynamics that the implementation of these strategies may produce in the economy, looking at different performance indicators, such as the GDP growth rate, unemployment, labour share, carbon emissions, and renewable energy production. Scenario analysis shows that a number of tradeoffs between social, economic and environmental indicators emerge. Such tradeoffs undermine an ‘objective’ definition of sustainability.