Measuring Risk to Manage Climate Disaster

This is the second piece on Professor Semmler’s work on the economics of climate change. Read the first here.

Images of a burning Amazon rainforest last week brought people across the world face to face with the effects of increasingly aggressive deforestation and the killing and displacement of humans and animals in one of the most diverse ecosystems on earth. São Paolo, the largest metropolis in the Americas, was covered by a blanket of smoke that turned the day to night.

The images are searing, but the response so far from Brazilian President Bolsonaro has been callous. The incentives toward inaction are evident: clearing forest expands arable farmland, which many growers see as key to economic growth. But is this analysis sound? Is environmental degradation truly a way to stave off economic stagnation?

Deploying models traditionally used to measure the dynamics of financial crisis and economic contraction, Willi Semmler, Arnhold Professor of International Cooperation and Development, is at the forefront of new efforts to try to make measurable the economic impacts of climate catastrophe. His conclusions may be alarming, but the concreteness of his analysis offers some hope that hard data can change the kind of short-term thinking behind the Amazon fires.

Semmler began his academic career with a mathematical economics dissertation inspired by the work of the classical economists of the late 18th and 19th centuries. For these luminaries – Smith, Ricardo, Marx – political economy was very much focused on theorizing a novel and wholly transformative phenomenon of industrial capitalism. Their questions were basic, and their approach socially informed: Why and how do economies grow? Where does the growth go, what impact does it have on inequality of income and wealth, and how? And, most importantly for subsequent generations of economists including Semmler: How can the economic engine periodically sputter and stall?

Soon after earning his Ph.D., Semmler became interested one particular kind of crisis-prone growth: climate change. “We realized that the economy is using up resources and also producing pollution. So we started working on growth and resource availability and exhaustion. How much do we leave to the next generation, and what are the environmental effects of economic growth?”

He began to adapt dynamic economic models that measure risk and recovery around financial crises to work in climate catastrophes, drawing inspiration from similar work around natural disasters by University in Exile Economics professor Emil J. Gumbel.

 “The same thing that happens during financial crises is happening in climate disasters. You usually have certain regions where  public capital — infrastructure and zoning — is destroyed. Private capital is destroyed. People lose lives. Agricultural production is destroyed. When capital is destroyed, potential output is destroyed. And the similarities are so striking,” with how financial disasters play out, says Semmler. Read his co-authored paper.

The results of Semmler’s decades of work at The New School, as well as his work as senior researcher at the International Institute for Applied Systems Analysis in Austria, and his work for the IMF, the ILO and the World Bank, are a set of practical recommendations for how to actually manage the risk of catastrophe in the era of accelerating climate change. In moving to that next step of formulating policy, Semmler thought carefully about risk distribution across generations and between different regions of the world. Referring to the work of philosopher John Rawls, Semmler notes that the problem of risk management is “a problem of fairness and justice.” The resulting policies are meant to both help prevent the worst catastrophes while also enabling the best possible response to the ones that do occur.

In order to prevent as many catastrophes as possible, even at our current stage, a large-scale and structural transformation of the economy is needed, says Semmler, encompassing a shift away from fossil fuels and the construction of preventative infrastructure, such as dams. This shift will itself require financing, but the typical mechanism for funding new public initiatives appears to be a political non-starter. “Raising taxes and winning elections? This will be insufficient!” he remarks.

Instead, Semmler proposes that governments raise money by issuing bonds. These 50-100-year “green bonds,” as Semmler calls them, “can transform the energy system on the large scale. They are more effective than just using a carbon tax…and distribute the burden of stepping out of fossil fuel energy and moving into renewable energy between the generations.” “Financing Low-Carbon Transitions through Carbon Pricing and Green Bonds,” a recent paper co-authored by Semmler and several NSSR alumni and students, including Mariana Mazzucato, will be published by the venerable German Institute for Economic Research in its Quarterly Journal for Economic Research. Read a working version, published at the World Bank working paper series.

Semmler has also considered how to narrow the gap between affluent countries, which tend to generate the most pollution, and developing nations, which generate relatively little pollution but are most vulnerable to its effects. An international financing effort building on the Copenhagen Accord would be necessary to both address how to build infrastructure to help reduce the risk of climate disaster as well as how to repair the damage when disaster does occur.

His prescriptions thus vary in scope. Semmler believes that the involvement of supranational organizations, such as the World Bank and the International Monetary Fund, is absolutely necessary to support recovery developing nations  after disasters. But when it comes to preventative measures, “nation-states are responsible for certain things and for third and other things, the global community is responsible,” he says. “There’s a balance to recognize the fact that on an individual level, we can’t really do too much. There’s a sense in which there needs to be global redistribution and global responsibility, but also we can’t defer responsibility to a kind of imagined global community, when in fact nations are still effectively the ones who need to be taking action, raising taxes, issuing climate bonds.”

Semmler’s work encapsulates much of what’s best of The New School’s tradition of engaged scholarship. Drawing on specialized knowledge, Semmler has worked to adapt existing dynamic models to deal with unforeseen but pressing sociopolitical issues with an eye towards practical, sustainable solutions. Very much in line with the NSSR’s intellectual heritage, however, Semmler is not working alone. As director of the Economics of Climate Change project at NSSR’s Schwartz Center for Economic Policy Analysis, and in conjunction with the University’s Centennial celebrations, Semmler is organizing the “Climate Disasters and the Green New Deal” conference on September 3, featuring economists Stephanie Kelton (NSSR alum now at Stony Brook University), Claudia Kemfert (German Institute of Economic Research), Bob Kopp (Rutgers University), and Stefan Mittnik (Ludwig Maximilians University of Munich). Semmler hopes the event will inform and motivate policy makes to take action on climate change now. “There’s a huge group of new Congress members who are pursuing [issues related to climate change], but nobody can put this platform forward without talking about the Green New Deal. I want to put these two things together. There’s the climate disaster, and Green New Deal.”

Lucas Perelló, Politics PhD Candidate, Wins Fulbright to Honduras

Free elections contested by parties are central to our conventional notions of democracy. But on what basis does a voter relate to their party: ideology, favors, personal interests, something else? And once party systems are established, how do they evolve? For New School for Social Research Politics PhD candidate Lucas Perelló, these questions provide the framework for his dissertation. And starting in September, he’ll be investigating them as a Fulbright Scholar in a country going through a nearly unprecedented political shift: Honduras.

Born in the U.S. and raised in Chile, Perelló studied politics broadly before focusing on comparative politics, especially in Latin America. After completing an MA in Chile, Perelló completed an MA in Applied Quantitative Research at New York University. But as he approached a career as a political scientist, he felt something was lacking. Looking to expand his conceptual formation, Perelló moved a few blocks north to NSSR.

“The New School overlapped with one of my other interests, which was to expand my methodological knowledge qualitatively. I was drawn to the emphasis given to aspects of development to solve conceptualizing things differently, giving you a different theoretical lenses to study particular political phenomenon.”

Political Party Shift

Immersing himself in empirical case studies and theory, Perelló began to formulate a research plan that married these elements tightly while renewing his passion for comparative approaches. “I study how political parties, and how is it and why is it that party systems change…and how it is that political parties engage with voters,” Perelló says. In this case, ‘political party systems’ refers to how elections are set up, whether voters choose between two parties or multiple parties. The question of party linkages looks at how parties get votes.

“This is a continuous debate within political science and comparative politics, but originally people thought political parties would appeal to voters on either on a programmatic basis, or a clientelist basis, or a charismatic one.” In other words, people vote for a party based on either an ideological agreement, a quid-pro-quo arrangement whereby a vote can be redeemed for favors, or force or personal magnetism of a candidate alone.

Of course, one party can have multiple sorts of such ‘linkages’ with voters, varying according to target demographic, general level of development, or ideology, and changing over time. With this interest party linkages and their evolution, Perelló was drawn to a comparatively understudied region, Central America, specifically Honduras. “Honduras actually presents very interesting insights into the entire discussion of party system change, and the types of party linkages that exist within society,” Perelló says.

Case Study: Honduras

Like many Latin American countries, Honduras transitioned from military dictatorship to democracy in the 1980s. For several decades after — even through a coup in 2009 — the country featured a two-party system that operated on a decisively clientelist model. But in the 2013 elections, a fundamental shift occurred: the two-party system gave way to a multi-party one, including an upstart Anti-Corruption Party led by a popular sportscaster.

“What is interesting about this change is that not only did the party system change quite abruptly, but the types of linkages that the political parties are adopting also shifted suddenly,” Perelló explains. Whereas clientelism and corruption were once the norm, programmatic appeals on the basis of ideology are gaining ground, especially among wealthier constituencies.  

There are several reasons that clientelism can lose its power. Appeals based on loyalty-for-favors become weaker as countries become wealthier. Additionally, clientelism can disenfranchise large parts of a population. “There’s many levels associated with this, but at least in the Honduran context these are very exclusive networks,” says Perelló. “For example, you can have a low-income household that is very dependent on some specific policies. The benefits that you might receive from these policies that are actually aimed at reducing poverty are contingent upon who you vote for. And [the government can] keep the electorate poor because they’re dependent on them if they want to stay in power. It’s been so entrenched that the way that it also molds how individual voters, how citizens actually see democracy.”

Because this shift from clientelism to programmatic appeals in developing countries is so unusual, Honduras is a fascinating case study against which to test existing theories of party systems and linkages. Perelló has visited Honduras several times, but found that pervasive clientelism made it nearly impossible to access the people and spaces relevant to his research. It also made for an interesting situation of mistaken identity. Once, while dressed up for a visit to the National Congress, dozens of older women surrounded him. “They approached me with receipts, with CDs, pictures of their kids, asking me if I could get their sons or their daughters who just graduated a job, if I could help them pay for receipt of electricity,” he says. Only when he opened his mouth to speak — in Chilean Spanish — did the crowd realize he was not a government official and could not help them. Local politicians were similarly reluctant to let Perelló in, stonewalling him or only disclosing details of the opposition’s approach.

Opening New Doors

Returning for 10 months with the prestigious Fulbright scholarship and an office and teaching position at Central American Technological University (UNITEC), Perelló is hopeful that more doors will open to him, especially among the political elite. “I really need to spend more time there — more time to conduct interviews, more archival research,” he says. He applied to several different grants and credits his Fulbright success to the wisdom and guidance of David Plotke, Professor of Politics and his dissertation advisor, as well as Tsuya Yee, Assistant Dean of Academic Affairs. But he’s cautious: “A Fulbright can work in favor or against you in the sense that, perhaps you’re seen as a representative of the U.S. government who’s meddling around internal politics of a country that has been historically intervened by the U.S. But at least to get my foot in the academic world, Fulbright has so far worked in my favor!”

Despite his focus on Honduras, Perelló believes his project can help scholars and the public understand how political systems can move away from clientelism, and how two-party systems can become more open and contested. “My overall objective in understanding these changes is to understand how can you strengthen democracy in countries that have such a strong authoritarian past.”

Hubertus Buchstein on the Heuss Professorship and Otto Kirchheimer

Connections between The New School for Social Research and Germany are both long-standing and numerous, ranging from the University in Exile in the 1930s to the Technical University of Dresden exchange program today,

A transformative moment in this transatlantic relationship happened in 1965, when New School President John Everett worked with the Volkswagen Foundation to create the Theodor Heuss Chair of the Social Sciences. Named for the first president of West Germany, this was the first professorship in the United States supported by a German foundation; Volkswagen endowed the chair for five years, after which the German federal government assumed responsibility. According to the most recent history of The New School for Social Research by Judith Friedlander, the chair “evolved out of earlier exchanges of mutual recognition and appreciation” between Heuss and New School leadership; like many University in Exile faculty members, Heuss himself had been dismissed from an academic position by the Nazis in the 1930s.

Early Heuss Professors included sociologists and philosophers who had studied critical theory in postwar Frankfurt School with the original founders of the Institute for Social Research, among them Jürgen Habermas. Today, the Heuss Professorship rotates between NSSR departments.

In 2018-2019, the Politics Department welcomed Hubertus Buchstein, a Full Professor in Political Theory and History of Political Ideas at the University of Greifswald. In addition to teaching a spring seminar on Habermas and the current work of Critical Theorists in Germany, he also completed extensive archival research on political theorist and University in Exile professor Otto Kirchheimer. Read on for more about his year here.

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RESEARCH MATTERS: So I hear you’ve been to The New School a few times before! Can you tell us about your own academic history and what brought you here?

HUBERTUS BUCHSTEIN: When I was working on my PhD thesis at the Free University of Berlin in the late 1980s, the topic involved some emigrants I knew were at The New School. So when for the first time in my life I came to America in 1990, I went to The New School. I wanted to see the building where Hannah Arendt had been — I simply wanted to be at the building!

I also got in contact with Andrew Arato and his wife Jean Cohen. He was the only one in the huge Frankfurt School camp who wrote critically about Eastern Europe. When I came back as a Humboldt Research Fellow in 1994, I taught a class with Andrew on the political sociology of the Frankfurt School. I came for the next seven years, every year for two months in February and March, and taught a class twice a week.

Since then I’m still in close contact with The New School and I come every year to New York. It was very easy to make friends here, to get to know people. It’s very international and this was totally different than what I knew.

RM: It was that different than Berlin?

HB: Berlin is Germany’s biggest city. But in comparison to New York it was a sleeping city. And in those days my Political Science department in Berlin didn’t have so many international students, in particular from Eastern Europe and from Latin America.

Teaching was also quite different. Here it’s more lecture-style seminars. In Germany we start in our theory classes with a discussion of the text. We have assigned sometimes 20, 30 pages only for class and the students have to read them three times so it’s like 80 pages. Here you assign a book but you can’t always do such a close reading. I really had to adjust to this style of teaching.

Economics PhD Student Kyle Moore Talks Policy and Capitol Hill

This story originally appeared on the Insights blog from the Schwartz Center for Economic Policy Analysis at The New School for Social Research

Kyle Moore starts a new job on Capitol Hill next week. He’ll be joining the Democratic staff of the Joint Economic Committee (JEC) as a Senior Policy Analyst.

Our first order of business is to offer Kyle a hearty congratulations on his success! Kyle is a long-time member of the SCEPA and New School community, and we wish him well as he goes forward in his economics career.

Kyle earned his MA in Economics from the New School for Social Research, served as a SCEPA fellow within the Retirement Equity Lab (ReLab), and went on to pursue his PhD in the department, which he is currently writing. Some of Kyle’s ReLab work can be found here and here. The Review of Black Political Economy also recently published his research done with ReLab.

As Kyle begins his journey to impact policy within the hallowed halls of our government, he shares a little of his experience below. His story reflects the same desire to confront some of today’s biggest challenges that attracted many of us to the New School. He talks about how he got to where he is today and gives some advice to those who will follow him.

  1. What will you do in this job?

    My role will be to write reports and issue briefs on the economic policy issues that matter to Democratic Members of Congress, to prepare briefings for and help contact experts to participate in Congressional hearings on those topics, and to help write the JEC response to the annual Economic Report of the President.

  2. Can you describe your research work and focus?

    As a researcher, I’m mainly interested in understanding the causes and consequences of identity group-based social and economic disparities. I want to provide explanations (and hopefully policy solutions for) persistent gaps in health, wealth, income, and employment across race and gender. To do this, I work within the traditions of stratification economics, institutional economics, and the political economy of health. My dissertation work is centered on the health consequences of racial disparities in access to economic resources and exposure to potentially stressful events. I also have a deep interest in the philosophy of social science and in economics’ role in academia and policy circles as a social science

  3. What interested you in working on Capitol Hill?

    My interest in working with the JEC, and with economic policy more broadly, stems from my view that social scientists have a responsibility to put their knowledge and their work into practice. Because the subject matter of the social sciences (particularly economics) is human well-being, those who have the time and resources to study the social sciences are called to two purposes: to make others aware of the causes and extent of social and economic problems, and to do what’s possible to alleviate those problems. Inequality, poverty, and racial disparities in mortality and morbidity are too important to be treated as only academic concerns; they have real consequences for people’s lives. Working with the JEC gives me the opportunity to get research directly into the hands of members of Congress — research that could make a real impact on people’s life chances.

  4. What are your hopes as you go forward in this new position and in your career?

    I’m looking forward to learning a lot about how economic policy is shaped while working with the JEC. My hope is that I’ll be able to direct people towards better understandings of the causes and consequences of economic inequality. I’d especially like to bring the expertise I’ve built studying persistent racial economic disparities to the staff, in hopes that progress can be made towards reducing those disparities. I also hope that the position will give me a more well-rounded understanding of economics and economic policy, beyond my current areas of expertise, that will be valuable for the students I plan to teach once I make my way back into academia.

  5. How did your time at SCEPA and in the NSSR Econ Department influence your decision to work in policy?

    Taking courses within the Economics department at NSSR and working at SCEPA and the Retirement Equity Lab set me up to take on this role in policy. Both sets of experiences were essential in shaping my understanding of the relationship between academic research and economic policy.
  6. NSSR’s Economics department is steeped in a tradition of political economy that’s constantly asking of its students “What is the end (purpose) of economic study?” Without that framing, it’s possible to treat economic study as just a set of interesting data puzzles. The critical perspective that’s baked into the coursework at NSSR steers students towards discussions of social and economic inequality, and what we can do about that inequality. Working at SCEPA and ReLab allowed me to put that critical frame developed through courses in the Econ department to practice, translating academic research into policy briefs and white papers using accessible (non-academic) language. I was able to produce a body of work on the intersection between race, aging, and retirement policy while there, developing some expertise on those subjects. I also gained valuable technical skills working with statistical software, government databases, and longitudinal surveys that I’ve used for my own research and will continue to use in my work with the JEC.

  7. As a role model for other NS Economics students, what advice would you give a current NS Econ student if they wanted to follow in your footsteps?

    It’s important to seek out opportunities to produce work with your name on it that will be publicly distributed. Whether it’s a blog post, an op-ed, a chapter review, a policy brief, or an academic research paper. Your body of work is something that accumulates over time, follows you throughout your career, and will often open a lot of doors for you. Any time is a good time to start writing.

    Start going to seminars, academic conferences, and events. Ask questions there, meet people, talk about your research, and if you don’t have a clearly defined topic, talk about what you’re interested in. The key is to make connections with people; the more people that know who you are and what you’re interested in, the more of a chance there is that when they hear about an opportunity that might be good for you, they send it your way. Doing good work is a necessary but insufficient condition for getting to a position where that work can make a difference.

    Put together a group of colleagues and mentors you can rely on to speak openly with about work, research, and the troubles that come along with academic life. It’s not easy for anyone, and no one gets through coursework or research entirely on their own. Research and scholarship are both social processes, so it makes sense that the best research and scholarship is done in groups. Most importantly though, having people to talk to and confide in is essential for maintaining mental health throughout grad school.

  8. Given the polarization of politics today, what role do you think current New School Economics student can play in creating real and positive change?

    NSSR Economics students are perhaps uniquely positioned among the universe of Econ students in that they aren’t discouraged from taking Economics’ role as a social science with real social and political implications seriously. NSSR Econ has a “vision” that is, at its core, unabashedly progressive. That vision is something that economics as an academic discipline desperately needs, but it’s equally needed at think tanks and in the places where economic policy is shaped.  

Benjamin Van Buren on Perception, Illusion, and Returning to New York

In 1976, NASA’s Viking 1 orbiter, which was circling around Mars, delivered one of the most striking and close-up images of this distant place that had ever been seen by earthlings. The photograph featured what looked like a human face sculpted into the surface of the planet. While many realized that the face was simply a coincidental pattern of light and shadow caught at just the right time, some took this “face on Mars” as evidence of abandoned alien civilizations and government cover-ups. 

Picture and close-up of the “face on Mars” taken by the Viking 1 orbiter

Visual perception has a difficult job. Starting from highly limited sensory input (flat, low-resolution images), it fills in gaps, adding information that was never there to begin with. Such extrapolations can provide an accurate sense of the world, or they can lead us astray. The wonders and folly of perception motivated Benjamin Van Buren, the new Assistant Professor of Psychology at The New School for Social Research (NSSR), to develop a research program concerning the precise mechanics of attention, perceptual inference, and illusion.

But how exactly does one study perception? One approach, which Van Buren favors, is psychophysics, a branch of psychology that deals with the relationships between physical stimuli and mental phenomena. Van Buren’s work maps visual inputs onto visual experiences, an approach favored by Gestalt psychologists, who discovered, for example, that how you see something moving depends dramatically on the context in which you view it.

Which dot is circling the other?

Van Buren gives the above example: Which dot is circling the other? We perceive the relationship between the two dots (i.e. which is stationary, and which as ‘orbiting’) by referring their motion to an external reference frame — either the screen or the moving background texture. The influence of background motion on the appearance of the dots strongly supports the Gestalt view of perception — that wholes take precedence over parts, and the appearance of parts depends on the wholes they are seen to comprise.

Gestalt Psychology has a long history at The New School; the first University in Exile faculty included Max Wertheimer, considered the father of Gestalt psychology, and Rudolph Arnheim. More recently, working outside the Gestalt tradition, Arien Mack, Alfred J. and Monette C Marrow Professor of Psychology, has advanced the study of perception with her research on inattentional blindness.

Van Buren’s path to NSSR began with an interest in visual aesthetic experiences. “In high school, I was always doing art-related stuff; making animations, wood carvings, and kinetic sculptures after Jean Tinguely. Then I got to college and the whole universe opened up before me,” he recalls. At the University of Pennsylvania, he followed a program in cognitive science and started working with Anjan Chatterjee on projects in neuroscience and aesthetics. “I wanted to see if it was possible to use a relatively ‘hard’ scientific approach to better understand things that seem more ineffable, like art experiences,” he says. This led him to a string of projects exploring the cognitive demands of viewing photographs of beautiful and ugly landscapes, how attention is deployed to attractive faces, and how artists’ painting styles change as a result of Alzheimer’s disease.

Most recently, Van Buren has also been probing the perception of intentions. Strictly speaking, when we see somebody reach out to hold our hand, or run to catch a train, the sensory data contain nothing more than physical states and changes. But in both of these cases, we experience the action in more than merely physical terms — we see it as performed by an agent with a mind, who has beliefs and goals. As a case study, his research has focused on another strong and storied illusion, in which we reflexively see simple geometric shapes (which we know to be inanimate) as alive and goal-directed when they move in particular ways.

In the same way that we can’t help but experience other visual illusions, we can’t help but see the shapes in the above Heider and Simmel film as animate, and telling some kind of story

Van Buren explains that seeing the world in this rich way is adaptive, driven by evolutionary pressures and the demands of development. Successful interaction with the world requires seeing it in all sorts of ways that go beyond the input data. “You can conceive of perception as solving a number of different problems. And we need not always think of perception as one process; it can be understood a variety or processes that are tacked together as solutions to problems that are posed by the environment,” Van Buren says.

For the past several years, Van Buren has been investigating perception’s curious “solutions” at Yale University, where he earned his doctorate, and at KU Leuven in Belgium, where he conducted postdoctoral research. His projects have explored everything from the perception of food’s caloric content to visitors’ aesthetic experiences in art galleries. Most recently, he has been interested in the question of how and when a still photo — which, strictly speaking, corresponds to a single moment of time — is seen to represent a longer stretch of time (from a few seconds to hours).

A New York native, Van Buren is looking forward to joining the New School and leading his own laboratory, the NSSR Perception Lab. He envisions the lab as “a space where people feel encouraged to break new intellectual and methodological ground, and where they learn from one another by sharing and debating ideas.” He is also excited about potential interdisciplinary collaborations with Parsons faculty and students. “Designers spend much of their time thinking about how we see the world in order to improve our experience of our surroundings. A lot of this knowledge would be interesting to vision scientists, but communication between these fields has been fairly rare. Fortunately, The New School is known for collaborations across disciplinary boundaries and for a widespread willingness to explore new avenues of research,” he says, citing the example of Professor of Psychology Michael Schober, who conducts research on jazz musicians as they improvise. “This work moves beyond all the existing paradigms in psychology in order to answer profound questions about how people read each other’s signals and create together.”

In Fall 2019, Van Buren will be teaching two classes. In “Visual Perception and Cognition,” NSSR graduate students will survey the latest vision science, including research on the perception of color, motion, shape, material, and depth. “I want to focus on big themes, and I plan to incorporate a lot of demonstrations.” he says. In “The Psychology of Aesthetics and Design,” undergraduates will study existing literature on empirical aesthetics, design a research question, and test their hypotheses through rigorous experimentation. He hopes these projects will reflect students’ own design practices and concerns, and that through them they will also discover new ways in which empirical methods can be used to enhance creative work.