Team member names
Laura Cugusi and Chiara Di Leone
Short summary of your improvement idea
The project explores the fundamental reevaluation of how we perceive and act upon climate change, focusing on the overlooked, yet central role of discount rates in environmental policy. Our aim is to reframe and improve the climate protocols currently in use at the Intergovernmental Panel for Climate Change (IPCC), centering on the methodological nuances and ideological underpinnings of climate models.
The project seeks to challenge the logics of financial valuation that tacitly dictate climate policy by integrating both existing and new alternative mathematical philosophies into the design of climate protocols. We aim to achieve these goals in two ways: 1) by re-conceptualizing climate protocols not as sporadic international meetings but as everyday technical decisions), including the use of discount rates in IPCC climate projections that shape long-term environmental outcomes and 2) through a History of Science analysis, by investigating alternative frameworks for valuing the environment that transcends practices of discounting in evaluating environmental outcomes.
Discount rates reflect the value of money at different points in time, adjusting future cash flows to their present value. Short versus long-termism perspectives influence whether analysts and policymakers favor more or fewer mitigation and adaptation measures in climate strategies and solutions. Used in climate models, these rates vary—developed countries typically use lower rates (4%-6%) for public projects, while developing countries might use higher rates (10%-12%) due to capital costs. When used in climate models, higher rates can downplay the urgency of climate action by reducing the present value of future damages.
But, like most things, the relationship between time, value, and the climate is not given; it is designed. It has been established in a specific way, but it could have easily been different.
Through historical analysis, we will foreground some of the critical junctures in history when the financial principle of discount rates was constructed—not as a natural inevitability but as a conscious choice. From 1864 German practices of forest management to contemporary climate agreements like the Kyoto Protocol all the way to Islamic Finance and Mesopotamian accounting tablets, we will examine how the relationship between time and money (specifically as it extends to the environment) has historically been imagined, represented, and enforced.
The scalar shift in the notion of Climate Protocols, from once-a-decade accords to the bottom-up redesigning of the financial terms of the climate equation, opens up a design space which broadens the possibilities for alignment between economic and ecological incentives. The importance of discount rates, specifically, cannot be overstated: they have been at the centre of one of the most obscure, yet most consequential debates known to humankind.
Additionally, we aim to reorient contemporary debates on climate protocols towards more actionable ends. Economic incentives championed by Environmental Economics and embodied in carbon markets can only go so far and even seem merely cosmetic when the most fundamental financial infrastructures underlying climate policy inherently – and always – favor the present.
The logics behind discount rates affects how investments are evaluated, including those concerning the environment. It is clear how short-term logics of finance are not designed to work well for forests that will exist 80 years from now or for oceans that are slowly starting to acidify. As a result, plans for deep ocean mining are calculated based on cost-benefit analysis that incentivize scraping life off the bottom of the ocean – all under the auspices of enormous short term financial gains.
Our approach will move protocols entrepreneurs away from the daunting task of intervening in climate change issues to focusing on identifiable, manageable and scalable elements. In this way, we will leverage financial mathematics as the trojan horse that helps us walk through the large, impenetrable rooms of the IPCC and of world governments.
What is the existing target protocol you are hoping to improve or enhance?
Climate Protocols. Specifically, the use of discount rates in IPCC climate models and their impact on climate policy.
What is the core idea or insight about potential improvement you want to pursue?
The core idea of our project rests on the following pillars:
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The belief that the efficacy of climate models can be improved by redefining the notion of Climate Protocols as better tuned in to reflect de facto indicators of system health and wellbeing of living beings, as opposed to being calibrated to anachronistic variables such as GDP.
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The mission to redefine the notion of Climate Protocols to include the mathematical gestures that reside within climate models themselves, departing from the questioning of the axiom of the discount rate (embedded as a key element in the mathematical calculations of the climate models, and which represents the value of risk and profit/losses across time).
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The investigation of historical junctures where alternatives valuations of time vs money could have been possible.
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The harnessing of scientific expertise, multiple literacies and collective imagination to prototype and test alternative protocols for climate governance by closely engaging with the mathematics of climate models.
What is your discovery methodology for investigating the current state of the target protocol? Eg: field observation, expert interviews, historical data analysis, failure event analysis.
Interviews with experts and forum discussions:
- Lead Authors of the IPCC report, such as Paul Edwards at Stanford.
- (Financial) Mathematicians
- Historians of Rules, Standards and Protocols.
- Monthly Online discussion forum sessions (via Trust Discord, Anticipatory Governance, Weird Economies platform)
Workshops:
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Workshops to design new mathematical formulas to discounting (or not) the future
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Writing workshop commissioning multidisciplinary experts to write short “scenario” summaries for Earth’s future corresponding to different applications / iterations of the model.
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IPCC protocols design simulation
Desk research:
- History of (Social) Science, looking at several archival materials, from 1846 tables on the first discounted cash flows in German forest management literature to the Latin American World Model—a crucial, yet largely forgotten, global simulation published in Argentina by a group of radical cyberneticians in 1974— to different conceptualizations of risk in Islamic Finance.
- Philosophy of (Political) Technology, engaging with the role of mathematics in informing climate action, or the lack thereof.
- Analysis of the financial and economic aspects of IPCC climate models
Publications/Presentation:
- WIP Open Source Comprehensive report on the research findings and methodologies
- WIP Open Source climate model prototypes
In what form will you prototype your improvement idea?
- The prototype improvement idea consists in the design of a series of speculative protocols (in line with state of the art models currently in use in the scientific community) applicable to real earth system models and IPCC projections.
- Workshopping alternative financial models for the time-value-environment matrix that challenge discount rates with selected experts and communities.
- The project intends to facilitate the drafting of an actionable protocol for the assessment of planetary health and for the diversifying of planetary futures together with top level experts, interdisciplinary professionals in the field of climate science, economy, mathematics / statistics, writers, artists, historians and other stakeholders.
- In addition, we will conduct a test rerun of “vintage” climate models, such as the Latin American World Model or the Limits to Growth report, to discuss their uses of discount rates.
- A multiplicity of discount rates merely reflect the photograph of planetary conditions in the present and project/ perpetuate an understanding of the planet’s history based on a limited interpretation of the problem space, the models that represent it, as well as the space of possible solutions. Therefore, our approach aims at mapping the network of key actors included in the economic aspects of climate models, taking the IPCC frameworks as an epistemological opportunity to reframe how finance and climate interact.
How will you field-test your improvement idea?
- Presenting the results to a test audience that includes policymakers, selected scientists and economists involved in the preparation of IPCC reports, climate impact researchers as well as ecological economics think-tanks. The research group designs and organises a practical workshop with institutional, academic, and activist / artists / educators and individuals / organisations part of a “community of practice” in climate governance, including the Potsdam Institute Climate Impact Research and the Earth System Governance research group, the Anticipatory Governance Working Group (which we both joined in 2020)
Who will be able to judge the quality of your output? Ideally name a few suitable judges.
- Liliana Doganova, economic sociologist
- Financial mathematics experts
- Ecological economics experts
- Researchers and policy experts at EIT Climate-KIC
- Researchers at the Future of Humanity institute
- The Anticipatory Governance community
How will you publish and evangelize your improvement idea?
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Final Report + Open Source Draft Protocols
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Network Map of key actors included in the economic aspects of climate models
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External Media: Publish selected Interviews and research material (Medium/Substack)
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Open Source library/knowledge database with lists of key readings and experts
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Network with existing research / political / activist groups working on alternative economic climate models.
What is the success vision for your idea?
New climate protocols are published in a variety of platforms (academic journals, magazines, online platforms ) and presented in conferences, talks, forums and venues, such as Serpentine R&D, the Institute for Cultural Inquiry (ICI) in Berlin, and Weird Economies. The outcome of the workshop leads to drafting comprehensive reports about alternative economic climate models. Selected protocols are discussed in formal institutional/ planetary context and adopted as policy in local pilot programmes and culminate in the establishment of a Shadow IPCC conference as a permanent network of open source prototyping practices for climate action and earth systems governance.
This add was run in the New York Times in 1998 by the Global Climate Coalition which was an industry group that actively campaigned against climate science until 2002. Source: Climateinvestigations.org