UNS — Universitas Sebelas Maret (UNS) Surakarta was entering its 45 years age marked by an open Academic Senate Session on Friday (12/3/2021). Birthday wishes were delivered from national and international partners, alumni, and universities. A scientific oration was also presented in the session by Economic Noble Laureate in 2003, Prof. Robert Franklin Engle, Ph.D.
The Noble Laureate delivered a scientific oration on Climate Change as a reality that everybody must face. Climate change brings two types of risks, physical risk, and transitional risk. Physical risk can be observed from the changes in the soil, weather, and infrastructures. In contrast, the transitional risk results from policy changes regarding climate change, technology, consumerism, and market sentiment during the transition period to the lower-carbon economy.
During the Covid-19 pandemic in 2020, the transitional risk is the most observable. The New York University Professor stated that transitional threat caused an economic downturn in various sectors such as airline, entertainment, and other sectors. Climate change risk also affects the stock market, portfolios of stocks, and bank portfolios.
“We might be worried about the Covid, and we might be worried about the recession. But the biggest risk is probably climate change,” Prof. Engle mentioned in his speech.
At this point, two options are available in facing climate change, adaptation or mitigation. Better risk evaluation is needed to improve financial system performance and allocate more capital to a more productive industry to apply the adaptation option. Mitigation can be used by committing to reducing the emission.
“These are three of my grandsons. When I see them, I (am) wondering whether (th)is peaceful appearance today is going to be still a peaceful performance when they grow up. They are actually quite worried about it,” the 79 years old Professor concluded. Humas UNS
Reporter: Ida Fitriyah
Editor: Dwi Hastuti
