CLIMATE & FINANCE ARE NOT GAMES, BUT GAME THEORY CAN HELP

Weekly
October 10, 2022
  • Climate and finance are linked by a Nash equilibrium
  • A long-term strategy would be preferred, but short-term gains prevail
  • Thus, the climate imbalance increases as economic activity and profits grow
  • Good news, macroeconomic policies can provide an exit from this sub-optimal situation