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Climate Change is the World’s Greatest Macro-Economic Shock

Issue 18 - 2023
Climate Change is the World’s Greatest Macro-Economic Shock

By Marie Owens Thomsen, IATA Senior Vice President, Sustainability and Chief Economist

IATA’s newly established Sustainability and Economics Division allows us to address the challenge of flying net zero by 2050 in a more holistic manner. The impacts of climate change on our global economy touches absolutely everything and everybody. At its core, the issue is about weening the global economy off its fossil-fuel dependency. All production processes need to evolve, we need to consume differently, and we are likely to have to confront more catastrophic weather events and dire living conditions which will increase displacement and migration. This will affect GDP, exchange rates, interest rates, unemployment, economic policy, and all facets of the global economy. As such, it is a systemic challenge, in need of systemic responses.

Systems thinking

Much of our thinking is compartmentalized, or siloed. Even in our universities we slice the topics up into pieces and behave as if they are somehow separate. One immediate consequence of climate change is that it has brought with it a greater understanding of our interdependencies. The biosphere encompasses the global ecosystems upon which much economic activity rests and upon which our survival depends. It is now more obvious that a system is not the sum of its parts, but the product of their interaction.  

Our mission is to provide analysis that facilitates and promotes air transportation’s transition to net zero by 2050. In doing so, we will rely not only on our own sustainability experts and economists, but on all of IATA as well as on our member airlines, partner external organizations and academia. We will need everybody’s knowledge, and we will need all possible solutions combined to succeed in this mission.

Optimizing use of data and analytics

Data is the foundation of all our analysis. At IATA we have privileged access to industry data provided by our member airlines. We complement our industry data with data from external sources and seek to promote wider data sharing across our value chain and beyond. We work on developing models that help us extract maximum information value. 

Every crisis generates the need for new sets of data and new metrics. Data development on the economics side has reached a level of maturity that contrasts with the vast need for new data on the environmental side. Getting everybody to agree on definitions is also a challenge. The lack of such norming and harmonization of metrics makes any comparative analytics that much more difficult. It is important to know that the sustainability field is still a nascent one, one that is in a constant state of flux, and one where many decisions will have to be made based on insufficient information. 

Preparing for a transformative future

Armed with our data and analytical capabilities, we are working on assessing all existing and potential future solutions along three dimensions: when they will be available, their capacity to reduce carbon emissions and their cost. This work will help us flesh out our more conceptual path to flying net zero by 2050 and help us put options into perspective and order our priorities. Most large-scale solutions lie some time ahead of us. While working towards facilitating those, we will strive to take action on multiple fronts that are more readily within reach. 

Aviation finds itself within one of its fastest ever transformations, born out of necessity, to ensure that flying sustainably becomes a reality by mid-century. Our goal is to decarbonize aviation without reducing aviation’s historic and growing role in supporting freedom of movement and commerce. We firmly believe that air transportation is a form of connectivity that the world cannot do without. Hence, the only way forward is to fly more sustainably and our role at IATA is to support that transition as best we can.

Biography of Marie Owens Thomsen

Marie joined IATA in 2022 as Chief Economist. In January 2023 Marie added responsibility for IATA’s Environment and Sustainability activities to her role.

Marie joined IATA from Lombard Odier where she was Head of Global Trends and Sustainability. Her 30-year professional life includes roles for both investment banks and private banks, including HSBC in London, Merrill Lynch in Paris, and Indosuez in Geneva. Outside of the financial sector Marie worked for IKEA, and she also founded and managed her own company in the equine industry.

Marie holds an MBA from the University of Gothenburg in Sweden, and a PhD in International Economics from the Graduate Institute in Geneva, Switzerland. She speaks Swedish, English, and French fluently.


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