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Articles by Tom
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What are the most significant economic policy changes that impact a company's financial performance?
Interest rates are one thing, carbon risk is another. While it's been possible for folks to kick the can down the road on carbon exposure, and there are a number of large investors backing away from reporting/investment standards, that's no longer the case. One driver is emerging software (Emitwise, etc) capable of shining a light on Scope 1 through 3, another is a growing awareness of all partners (customers, suppliers, voters) that carbon risk matters. Policy has led here in a few countries (eg UK) and lagged in others, but the next decade will see a global levelling on investor/customer expectations which will drive policy from an unexpected direction: WTO as climate hawk, enabling jurisdictions to level risks across markets.
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You’re struggling to make sense of your economics continuing education. What’s the best way to approach it?
I return to the single most important (impactful) macro-economic variable of the 21st century - that's climate risk, and the associated need to transition to a low-carbon economy. The ways in which economists traditionally describe macro-trends no longer apply - attempts to do this via DICE/RICE (Dynamic/Regional Integrated model on Climate and Economy) fell flat. Meant as a meaningful way for economists to educated themselves, along traditional lines, about this macro-change they've achieved the opposite: enabled economists to continue to think of climate risk as a change to an existing worldview. It is not that (I've criticized it in Waking the Frog, Ch 4) and the need to bring bottoms up approach to risk on an asset level is required.
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How can trust be used to improve economic sociology theories?
Trust is normally dependent on past performance; any expert, model or theory is back-tested to ensure it would account for what we see. Economics has the paradox that the past is no longer (was it ever?) a basis for what we'll see going forward. Climate risk, in particular, ensures the future will be nothing like the past. Actuaries have already run the alarm bell, as a group committed to quantitive analysis. Hence, trust will now shift to economists better able to engage on our ongoing (n=1) experiment - that will require substantive revisions to how uncertainty is incorporated into narrative, models or theory.
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You're an economist who wants to stay relevant. What do you need to do?
The main thing is to be better able to link systemic uncertainty, often best described in qualitative terms (eg climate risk), to quantitative analysis. When the past is no longer a predictor of the future, traditional actuarial and quantitative approaches no longer apply. A decision to continue to produce quantitative analysis may hold, or it may be better to turn to a narrative approach (see Narrative Economics by Shiller, or Ch 4 of my own book Waking the Frog).
Activity
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Well argued position by Toby Heaps and Ralph Torrie on the issue. Where is the chorus of corporate support from the traditional free market / global…
Well argued position by Toby Heaps and Ralph Torrie on the issue. Where is the chorus of corporate support from the traditional free market / global…
Shared by Tom Rand
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In nothing to do with work updates, and everything to do with general awesomeness, after three amazing years together, Peter MacLeod and I decided to…
In nothing to do with work updates, and everything to do with general awesomeness, after three amazing years together, Peter MacLeod and I decided to…
Liked by Tom Rand
Experience & Education
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French
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More activity by Tom
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Billionaires like Bill Gates who are climate-aware have a problem. They occupy a reality that's somewhat like ours but is heavy on sources confirming…
Billionaires like Bill Gates who are climate-aware have a problem. They occupy a reality that's somewhat like ours but is heavy on sources confirming…
Liked by Tom Rand
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While we hallucinate that coddling incumbent ICE production (we’ve been subsidizing the industry for decades) is in any way evidence of a ‘free…
While we hallucinate that coddling incumbent ICE production (we’ve been subsidizing the industry for decades) is in any way evidence of a ‘free…
Shared by Tom Rand
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Just Stop Calling Them Offsets! I agree with Owen Hewlett and The Gold Standard: Just stop calling them offsets. Once you call them offsets and…
Just Stop Calling Them Offsets! I agree with Owen Hewlett and The Gold Standard: Just stop calling them offsets. Once you call them offsets and…
Liked by Tom Rand
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Morgan Solar Fins at the OAA headquarters in Toronto offer a range of design features and uses. Here they provide excellent shading, light the…
Morgan Solar Fins at the OAA headquarters in Toronto offer a range of design features and uses. Here they provide excellent shading, light the…
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This is the coolest year of the coming decades. We will look back on 2023/4 as heavenly. This is, obviously, very unfortunate. So - mitigate, people,…
This is the coolest year of the coming decades. We will look back on 2023/4 as heavenly. This is, obviously, very unfortunate. So - mitigate, people,…
Shared by Tom Rand
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Hope you can join us on October 24 for the 18th Annual Kern County Energy Summit. The half-day event will highlight the region's diverse and dynamic…
Hope you can join us on October 24 for the 18th Annual Kern County Energy Summit. The half-day event will highlight the region's diverse and dynamic…
Liked by Tom Rand
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Parity's lifetime US GHG reductions are the equivalent of 67,159,758.87 miles driven by an average gas-powered passenger car! 🚗 Some other…
Parity's lifetime US GHG reductions are the equivalent of 67,159,758.87 miles driven by an average gas-powered passenger car! 🚗 Some other…
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🔋The Energy storage and Battery recycling market is poised for substantial growth in the coming decade, fueled by rising EV adoption and the demand…
🔋The Energy storage and Battery recycling market is poised for substantial growth in the coming decade, fueled by rising EV adoption and the demand…
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