Integrating Multiple Timescales in the Economic Modelling of the Low-Carbon Transition

The climate crisis has resulted from the interaction of multiple complex systems within our physical world and the society we have built within it. Rapid technological evolution has powered economic development and consumption, but at a pace that natural planetary systems have been unable to cope with. We must now rely on the same processes of technological development to decarbonise our economies before the emission reduction targets of the Paris Climate Agreement are missed. Policymakers require modelling tools for guidance in how to develop and deploy the necessary technologies. This chapter discusses how these modelling tools account for the multiple timescales involved in responding to the challenge of climate change. It finds important deficiencies in the ways that standard models define and combine timescales. It presents a nascent alternative approach that places technological timescales at the heart of the analysis and finds that meeting the Paris targets is still possible. However, even this advanced approach negates the timescales necessary to develop and implement effective policy, which calls into question the feasibility of the targets. This chapter concludes that modelling could play a critical role in developing effective policies to shorten the timescale required for decarbonisation. However, to get there we must first address a factor that operates on even longer timescales: fundamental changes in economic theory.