Planetary Economics

How well do our assumptions about the global challenges of energy, environment and economic development fit the facts?

Energy prices have varied hugely between countries and over time, yet the share of national income spent on energy has remained surprisingly constant. The foundational theories of economic growth account for only about half the growth observed in practice. Despite escalating warnings for more than two decades about the planetary risks of rising greenhouse gas emissions, most governments have seemed powerless to change course.

Planetary Economics shows the surprising links between these seemingly unconnected facts. It argues that tackling the energy and environmental problems of the 21st Century requires three different domains of decision-making to be recognised and connected. Each domain involves different theoretical foundations, draws on different areas of evidence, and implies different policies.

The book shows that the transformation of energy systems involves all three domains – and each is equally important. From them flow three pillars of policy – three quite distinct kinds of actions that need to be taken, which rest on fundamentally different principles. Any pillar on its own will fail.

Only by understanding all three, and fitting them together, do we have any hope of changing course. And if we do, the oft-assumed conflict between economy and the environment dissolves – with potential for benefits to both. Planetary Economics charts how.

“A seminal book that challenges conventional wisdom about growth, innovation and climate policy – a caractère iconoclaste… In filling out the picture, Planetary Economics contains a crucial practical message: the fact that energy is at the core of the economic machine is both the challenge and the opportunity, and three pillars of policy together can steer it in safer directions.” 

Laurence Tubiana, Ambassador and Special Envoy for Climate Change, France, and President, 21st UNFCCC Conference of Parties (COP21)

“A profoundly important book – a genuinely original view of how we might overcome some of the most fundamental problems facing effective climate change policy around the world today”. 

Lord Anthony Giddens, Fellow Kings College Cambs,  and former Director of the London School of Economics.

Author: Michael Grubb, with Jean-Charles Hourcade and Karsten Neuhoff
Year: 2014
Type: Final paper