With Felix Kübler at "Rosengarten"

Prof. Felix Kübler's career was shaped by a chance encounter with an economics book. Today, he researches how complex economic models link financial markets and climate change, and how to improve intergenerational social policy.

While studying mathematics, Felix Kübler came across a book on economics that captivated him. “I was naive and believed everything in it,” he says, “and since I wasn’t that good at math, I decided to switch to economics. It turned out to be a perfect fit.” He was so fascinated by the subject that he decided to pursue a PhD, choosing to study in the United States to reconnect with fond memories of his teenage years there. “At that time, getting a PhD in the US pretty much meant you were on an academic track.” So his career path was set. “I became an economist for life,” he adds with a laugh. His switch to financial economics came somewhat unexpectedly when he joined Prof. Thorsten Hens at UZH. Although he had already done extensive research on economic uncertainty, also in financial contexts, his focus had remained in economics. Now he specializes in macrofinance – a field that bridges macroeconomics and finance.

One of his main research interests is computational economics, which uses numerical methods to solve complex, non-linear economic models. “Advances in neural networks and AI-driven machine learning have made this field far more interesting, opening up new ways to tackle previously unsolvable problems,” he explains. Kübler studies the macroeconomic impact of human-induced climate change. By incorporating climate factors into financial models, he explores how economic policies can help mitigate the effects of climate change and adapt to changing conditions. Key questions he addresses are: What measures, such as taxes, regulations or no action at all, are effective today? And how should financial markets adapt to play a positive role in addressing climate change, rather than contributing to it? When it comes to climate solutions, one widely discussed approach among researchers is a global emissions tax. “In our models, such a tax would have a positive impact on emissions. For example it would make coal, which is the main problem, uncompetitive and reduce its use,“ says Kübler. “However,” he notes, “taxes are often viewed negatively and the introduction of new ones is extremely unpopular, especially among older generations. Young people welcome lower emissions because they’ll be affected by climate change the longest, but older people may feel differently because of rising energy and transportation costs.” In the United States, the focus of Kübler ’s research, support for an emissions tax is unlikely due to limited public transportation options and high demand for heating and cooling. “In many regions, a car is essential, and in extreme climates, heating or air conditioning is necessary for survival,” he explains.

Kübler’s research explores whether financial compensation for older generations could build broader support for an emissions tax. Such compensation could help seniors cope with rising costs while also benefiting younger generations by reducing climate impacts. Increasing pension benefits for older generations could be one way of gaining support for such a tax. This would offset the higher heating and transport costs they might face. “Younger people who contribute to these pensions might receive less in the future, but would gain from a more stable climate,” he explains. “Our calculations show that such intergenerational compensation mechanisms could improve overall quality of life and foster broader support for climate measures like an emissions tax.” Reflecting on his career path, Kübler admits: “Some days I think I should have gone into medicine – it’s a field where you can really see the impact you’re making.” A doctor, for example, can help people directly. “With economics, however,” he adds, “you have the chance to drive a broader, systemic change.” His advice to others is to always ask questions and be critical. “The world is full of misinformation, and many people present their views as the absolute truth. In reality, we all know far less than we think. It’s crucial to understand the limits of our knowledge and to examine carefully what we’re told.“

Author: Jamie Brama
Photos: Caroline Krajcir