The world confronts four major economic challenges right now

Conventional economics needn't be dumped but economists must apply their tools to the objectives and constraints of the day

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Another tumultuous year has confirmed that the global economy is at a turning point. We face four big challenges: a climate transition, good-jobs problem, an economic-development crisis and the search for a newer, healthier form of globalization. To address each, we must leave behind established modes of thinking and seek creative workable solutions, while recognizing that these efforts will be necessarily uncoordinated and experimental.

Climate change is the most daunting challenge, and the one that has been overlooked the longest, at great cost. If we are to avoid condemning humanity to a dystopian future, we must act fast to decarbonize the global economy. We have long known that we must wean ourselves from fossil fuels, develop green alternatives and shore up our defences against the environmental damage that past inaction has already caused. However, it's clear that little of this is likely to be achieved through global cooperation or economists' favoured policies.

Instead, individual countries will forge ahead with their own green agendas, with policies that best account for their specific political constraints, as the US, EU and China have already been doing.

The result will be a hodge-podge of emission caps, tax incentives, R&D support and green industrial policies with little global coherence and occasional costs for other countries. Messy though it may be, an uncoordinated push for climate action may be the best we can realistically hope for.