This year’s first LSE Masterclass in Social Sciences took place in Madrid from 11 – 13 April 2016, kindly sponsored by the Fundación Ramón Areces. This masterclass was taught by LSE academics Dr Luca Taschini, Dr Graham Floater and Dimitri Zenghelis, and focused on the key outcomes and challenges after the Paris Climate Change Conference (COP 21).
The first day saw Dr Luca Taschini focussing on international emissions trading, with an emphasis on environment externalities, market failures, and market-based instruments.
An externality as a cost was described by Dr Taschini using an example of a fisherman downstream from a polluting factory, leading to a decrease in the lake’s fish harvest. In this case, the externality led to market failures, as the price of the goods did not reflect all of the costs to society associated with its production. Dr Taschini concluded that the market lacks a mechanism by which to account for external costs, so it tends to favour more production of goods and services from industries inflicting damage to the natural environment.
This was followed by a more comparative approach looking at the European emissions trading system and carbon pricing around the globe.
On the second day, Dr Graham Floater talked about cities and the green economy, with a special focus on urban innovation.
Stockholm was used as the case study, and Dr Floater discussed how the city took early action on green policies. Stockholm has managed strong economic growth, whilst transitioning to a low-carbon economy. The city’s ambitious goal for 2050 is to become free of fossil fuels, which will require strong and early policy action over the next few years to overcome long-term lock-in of high carbon infrastructure, systems and technology.
The last day concluded with Dimitri Zenghelis discussing costs of carbon reduction, innovation and competitiveness. Mr Zenghelis described how climate change, caused by past greenhouse gas emissions, is already having serious economic consequences, especially in more exposed areas of the world.
Without action, warming could exceed 4°C by the end of the century, with extreme and potentially irreversible impacts. Choices today create path dependencies for decades to come. The choices selected are dependent on the expectations regarding technologies and the initial conditions of the innovation process, with government having a role to play in both these areas.
Mr Zenghelis analysed the climate change Paris Accord, where countries agreed to hold the rise in global temperatures to below 2°C, while pursuing efforts to keep that increase to 1.5°C.
The Climate Change – After Paris what next? Masterclass was a great kick-off for the 2016 Masterclass cycle thanks to the very insightful and interactive seminars by Luca, Graham and Dimitri, as well as the incredibly well-informed and engaging audience. The application numbers and the profiles of the selected participants for the Climate Change programme were exceptionally high, underlining the fact that public interest in the topic here in Spain also remains high. Rightfully so, as the policies discussed will decide nothing less than the future of our planet.
Christian Thiel, Project Manager, LSE Enterprise Ltd
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