What Is Mandatory TCFD Climate Disclosure?

TCFD stands for Task Force on Climate-Related Financial Disclosures. The TCFD’s overall aim is to encourage a greener and thus more stable international financial system. The TCFD disclosures allow investors and financial institutions to make more informed and clearer price risk related decisions. Making climate disclosures mandatory in alignment with TCFD’s framework encourages a greater international effort to move towards a greener economy.

Categories Economic Concepts

Introduction To Ecological Economics

Ecological economics focuses on the need for human economic activity to not extend beyond our ecological ceiling whilst providing prosperity for all. It differs from neoclassical (more traditional) forms of economics in that there is not an emphasis on growth but rather ensuring planetary and societal welfare through redistributive and regenerative systems. Some current day examples of economic frameworks that use ecological economics are degrowth (Hickel & Kallis) and Doughnut Economics (Kate Raworth).

The Social Discount Rate

The Social Discount Rate (SDR) represents the value we place on the welfare of future generations and consequently the cost that society today should bear for future generations - a low SDR places a similar value on future generations’ welfare as on current ones, a high SDR does the opposite. A high SDR used in policymaking results in much less money being spent on climate action today.  An example of different discount rates being used in climate models can be seen in the Stern vs Nordhaus debate, whereas Nordhaus used a high and Stern a low discount rate. 

Categories Economic Concepts

What is Jevon’s Paradox?

Jevon’s paradox describes how a more efficient use of one resource can actually result in the opposite: an increase in use of that particular resource. In 1992, Harry Saunders built on Jevon’s paradox and said “energy efficiency gains will increase consumption above where it would be without these gains”. Efficiency alone is not enough to reduce the overall consumption of energy, but needs to be employed in conjunction with policies that limit the use of energy as well.

Categories Economic Concepts