Professor Willi Semmler of The New School and co-editor of the Oxford Handbook of the Macroeconomics of Global Warming was the keynote speaker at the Development Policy Seminar on “A Macroeconomic Framework for Climate Investment with Implications for Structural Change and Employment” held today in New York. Prof. Semmler presented a macroeconomic model for assessing optimal public policy decisions on investments in adaptation, mitigation and infrastructure. He also presented a model that assesses implications of carbon tax, and subsidies for low carbon intensity sectors on employment and output. Collectively, the large-scale models demonstrate the importance of taking into account the sources of greenhouse gas emissions; the damage caused by such emissions; the financing of climate policies; and the phasing-in of renewable energy. The models also show that structural transformation toward a low-carbon economy requires considerable support by industrial, labour market and compensation policies.

Chaired by Diana Alarcón, Chief of the Development Strategy and Policy Analysis Unit of the Development Policy and Analysis Division, the seminar concluded with a Q&A session, where participants from different UN entities and academia further explored, among other things, the importance of considering the balance between mitigation and adaptation investment projects; the implications of cross-border trade on an economy’s preferences over production activities of different carbon intensities; and the consequences of the changing labour markets as a result of low-carbon transformation.