Climate Change Crisis: Prescribing Alternative Economic Policy Using An Austrian Framework

This paper reviews the literature surrounding climate change adaptation and mitigation to assess the possible contributions and limitations of heterodox economics to climate change policy. Through interdisciplinary research between economics and environmental issues, this paper aims to stress the importance of utilizing heterodox schools of economics to create more pragmatic and dynamic policy. The secondary aim is to use Austrian frameworks to contribute to the construction of feasible, efficient, and equitable climate change policy. This paper used qualitative and textual analysis of the Austrian schools of economics conceptualize possible policy responses to climate change. Research found that the Austrian prescription of privatized climate change policy, though robust in internal validity, fallaciously believes in the power of property rights and tort litigation to feasibly, efficiently, and equitably resolve competing interests regarding the use of natural resources. Further research is needed to implicitly analyze the values hidden within adaptation and mitigation strategies. The limits and values of the social system dictate the limits and values that are carried over into economics and thus, climate change policy. It is necessary to understand and predict how economic systems, social systems, and institutions will evolve as economic stability, social cohesion, and institutional cooperation will affect the limits of climate change policy. Findings suggest that policy should abandon ‘either/or’ solutions in favor of ‘both/and’ solutions to climate change. This paper is useful in understanding environmental economics and institutional structures and evolution. The research provides further insight into heterodox perspectives of environmental economics.