Esther Duflo Keynote
Putting Fairness at the Heart of Climate Policy
The 2026 Annual Research Night brought together researchers, donors, partners, and friends of the Department of Economics for a special celebration marking Ernst Fehr’s 70th birthday. The evening also highlighted the department’s next chapter: Nobel laureate Esther Duflo, who will join the University of Zurich in July 2026 together with Abhijit Banerjee, delivered the keynote address.
In Just Economics: A Better Deal for People and Planet, Esther Duflo presented a bold vision for tackling climate change through fairness, international cooperation, and evidence-based policy.
Duflo’s starting point was a simple observation: those hit hardest by climate change are those who contribute least to it. While low- and middle-income countries are expected to bear the heaviest burden of rising temperatures, extreme weather, and climate-related mortality, their populations account for only a small share of global emissions. Climate change, Duflo argued, is therefore fundamentally a matter of moral responsibility and fairness.
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“Emissions kill a lot of people in a very unequal way.”
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Yet Duflo’s message was not only about inequality. She also argued that low- and middle-income countries will play a decisive role in determining the planet’s future. As their populations grow and economies develop, these countries will increasingly shape global emissions trajectories. Any successful climate strategy must therefore place them at the center of the solution.
To address this challenge, Duflo proposed a new climate bargain between wealthy and developing countries. Building on the principle that polluters should compensate those harmed by their actions, the proposal would see rich countries provide compensation for their carbon emissions, while participating low- and middle-income countries commit to carbon pricing and emissions reductions.
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“The only solution is to put vulnerable people and vulnerable countries at the heart of the climate effort.”
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How do Duflo and her co‑authors envision putting this into practice? With a system that is Foreseeable, Automatic, Immediate, and Regular – the FAIR framework. Rather than relying on complex aid programs, most resources would flow directly to households affected by climate change, complemented by community adaptation projects and support for governments facing climate-related disasters. The goal is to create a deal that aligns incentives for all participants while strengthening international cooperation.
The keynote resonated strongly with the themes that have shaped Ernst Fehr’s career. Like Fehr’s pioneering work on fairness, cooperation, and institutions, Duflo’s proposal rests on the idea that durable solutions emerge when incentives align with principles of justice. At a time when international cooperation appears increasingly fragile, she offered a pragmatic way forward – built on mutual benefit, shared responsibility, and evidence-based policy design.
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“There are reasons for optimism. We can stop neglecting low- and middle-income countries – that is my hope.”
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