SSRNMeet the Author: Sara GerkeSara Gerke is an Associate Professor of Law and Richard W. & Marie L. Corman Scholar at the University of Illinois College of Law. Her research focuses on the ethical and legal challenges of artificial intelligence and big data for health care and health law in the United States and Europe. She also researches comparative law and ethics of other issues at the cutting edge of medical developments, biological products, reproductive medicine, and digital health more generally. Professor Gerke has over 60 publications in health law and bioethics, and her work has appeared in leading law, medical, scientific, and bioethics journals. She is leading several research projects, including CLASSICA (Validating AI in Classifying Cancer in Real-Time Surgery) and OperA (Optimizing Colorectal Cancer Prevention Through Personalized Treatment With Artificial Intelligence), both funded by the European Union. She spoke with SSRN about the legal and ethical challenges of integrating artificial intelligence into the medical field and how much farther we still have to go.Q: Youve led and been part of research projects that work on things like artificial intelligence (AI) in healthcare and the legal and ethical implications of integrating new and cutting-edge technology into medical practice. What has driven your interest and motivation within this field of study?A: I moved to the U.S. about six years ago. Previously, I was the General Manager of the Institute for German, European and International Medical Law, Public Health Law and Bioethics of the Universities of Heidelberg and Mannheim, and I was also doing a lot of grant writing. I already felt like we were getting to the point where we have to submit applications for technology, because thats the new world, where its heading towards. It takes quite some time until you actually can execute a grant. I somehow got to know about this project [in the U.S.], and I was really excited about it. It would have taken probably another two years until I could carry out something similar in Germany. Long term, I always thought to pursue an international career so that I can write more articles in English and really spread my work around the world. I applied for that position, was very lucky to get it, and was responsible for the day-to-day work of the Project on Precision Medicine, Artificial Intelligence, and the Law (PMAIL) at the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School. I feel these days everyone is very aware of AI, at the latest when ChatGPT came on the market. But six years ago, we were one of the very small groups who really looked at AI and digital technology at that time in the healthcare field from an ethical but also legal perspective.Q: Your most downloaded paper on SSRN, Ethical and Legal Challenges of Artificial Intelligence-Driven Healthcare, written in 2020, highlights several main concerns regarding AI in healthcare, both in the legal and ethical sense. In the four years since you wrote this, which legal or ethical problems do you think have made the most progress?A: I dont think we made enough progress in those years since I wrote that paper. This paper has been cited so much because we were essentially the first who wrote a paper on this topic. At that point, it didnt have much interest yet. But what we are seeing, comparatively because I do a lot of comparative law between the EU and the U.S. on the regulatory front is a lot has happened since then. The Food and Drug Administration (FDA) has thought a lot about how to regulate AI and machine learning (ML)-based medical devices. Also, we have seen in the EU just recently the AI Act, the worldwide first regulatory framework for AI.In the last probably two years now, people are very aware of questions of liability and liability risk when introducing those tools into the healthcare system and into the hospitals. The FDA has already authorized over 950 AI/ML-based medical devices. And frankly, not all of the AI tools are considered or classified as medical devices. We have a lot of in-house developments and other particular clinical decision tools that fall outside of FDA regulation. Those tools [have] already been implemented in healthcare. In recent years, these questions of whos going to be held liable if something goes wrong? are much more pressing.Q: How did working on this research early on inform what you do now?A: I feel very fortunate that I have been working in this field for such a long time now to build my expertise. I can now adapt to new challenges relatively easily because I have a long experience of going deep into the legal and ethical issues of AI. Im doing a lot of interdisciplinary work. I work with physicians, with engineers, and so I can always get new ideas from those collaborations. Every day you read something [new] about AI: its hard to keep up at that pace. So, some groundwork of knowledge is really helpful to be able to catch up on all the new developments happening every single day.Q: Youve done a lot of work regarding medical AI applications used for self-diagnosing and the importance of labeling these apps properly. Talk a little bit about why its important to educate people about the function and purpose of self-diagnosing AI apps like these.A: Im still doing a lot of work on the questions of labeling, because I think its so important. Labeling is just one small piece of this entire puzzle. I am a believer in labeling AI, in particular in the healthcare field. Imagine two different types of tools. You can first imagine a tool which is being used by a physician in a hospital. The label is directed to the healthcare provider and [those] who need information about the tool to assess whether it makes sense to use that tool safely on their patients.On the other hand, we have a lot of direct-to-consumer AI tools, including apps. Here, they also need to get some type of information. This information might potentially be a little different in detail. A consumer might care about other things like privacy, if this is safe to use, or if data is properly protected while a physician might need to get more granular information about if this dataset [has] been properly tested and breakdowns of race, ethnicity, location, age, gender, etc. That information is really important for physicians to know, and unfortunately, we dont have proper standards in place at this point which require manufacturers to disclose that. The Office of the National Coordinator for Health IT (ONC) has recently put out a rule and requires some type of transparency and some kind of nutrition label. [Its] really nice to see that regulators are now finally doing something in regard to labeling, but its just a tiny amount of tools that are being covered by that rule. Im still waiting and hoping for the FDA to change that. At some point, hopefully all AI tools have some type of label, so that users are getting proper information. Sometimes one gets the criticism, well, no one reads labels, but its better to have that information as an option to read it, if you want to. I think there is a necessity to require that disclosure.Q: Youve pointed out in your work that while many of these apps might be labeled as information only tools rather than actual diagnoses, people sometimes misperceive them as real diagnoses. Do you see this misperception as an example or indicator of some sort of larger issue with how medical AI tools are understood by consumers?A: The issue that we see in some of these apps is that they for example, the electrocardiogram app from Apple are actually information tools and not [meant] to make a diagnosis. But if people are using those tools for [something] like skin cancer screenings, they usually tend to believe whatever the AI tool gives them. [They] might just skip a doctor visit because they are scanning with their app, and [think], oh, it seems I dont have any cancer. Everything looks good, so I dont need to necessarily go to the doctor right now. We see a lot of empirical data on that, that the consumers are perceiving those tools as diagnostic tools. But if one looks at the language, all of those manufacturers are clearly articulating that a direct-to-consumer tool, often available without any prescription, doesnt replace going to the doctor. I think we need to have measures [and] more education around it. The majority of health AI apps or general health apps are not being reviewed by the FDA: they fall outside of the Federal Food, Drug, and Cosmetic Act. So, it is hard for consumers to assess whether this app is reliable or not, because consumers usually just put into the App Store what they are looking [for], and whatever pops up first, they likely are going to download.Q: AI has developed very quickly in the past few years, and it has raised problems that nobody really had to think about before. Because of this, theres a retroactive response to certain problems. How do you think researchers can begin to anticipate where the field is headed, to ensure that AI is used responsibly in healthcare?A: I personally dont have a crystal ball, and I think thats the problem. Because honestly, if you would have asked people maybe three [or] four years ago, I dont think they would have suggested that wed come [this] far so quickly. We have these generative AI tools that have incredible capacities but also raise a lot of new issues which we have not anticipated. Once you get it out of the box, its hard to get it back into the box.Thats a problem now, because retroactively making laws around this is really challenging, and we are not seeing right now in the U.S. that thats going to necessarily change. I think the approach in the U.S. is going to be more like a mosaic style. We have different regulators, and everyone is going to do some stuff in their wheelhouse. Hopefully, there will be enough collaboration and understanding that its going to be a mosaic or puzzle to be completed, rather than overlapping and making it much more complicated for stakeholders to understand and oversee.Q: Are there any papers, projects, or research you are working on right now that youre particularly excited about?A: I always have a lot of projects going on, because AI keeps me busy. I have several research projects Im involved in. Im leading two projects in the ethics and legal field, which are called CLASSICA and OperA, and they are funded by the European Union. Ive also been one of the PIs (principal investigators) of an National Institute of Biomedical Imaging and Bioengineering (NIBIB) and the National Institutes of Health Office of the Director (NIH OD) grant on technology. There are in particular in the two projects funded by the European Union clinical trials being carried out. One is for colon cancer prevention. AI tools are being tested to see if they are going to be helpful in the long run. Similarly, [in] the CLASSICA project, thats a project on AI-assisted surgery. The surgeons are testing an AI tool that can predict whether tissue is benign or malignant in real-time during a surgery.Im not involved in the clinical trials, but for me, its really exciting, because my team is looking at some of the legal and ethical issues, such as, do surgeons have any reluctancy to implement such a tool and use it in the operation room? [and] are there any liability risks that they are worried about?My work keeps me busy in the liability space, but also in regulation and the questions of, how should regulators in the U.S. and Europe regulate more complex tools like generative AI? Thats going to be a real challenge.There are many questions, and in the liability space in particular, the more sophisticated the AI tool becomes, the more interesting and unsettled the question is. How does tort law deal with an AI tool that practices medicine? An AI tool is not considered a legal person at this point. So at some point in the future, you might have an AI tool that is so sophisticated [that] its a standard of care and is implemented in a hospital. It might be that you cant find any human fault in the physician using the AI tool: the physician needs to rely on the output of the AI tool because its so complex. And then theres this question of, if harm occurs, whos going to be held liable if you cant find human fault in the physician? Because it was totally fine of the physician to rely on the AI tool in the first place. These are questions which we need to tackle in the future, once such AI is going to be implemented in the healthcare field.Q: How long do some of these clinical trials take?A: The ones carried out in the projects I am involved in last for several years. These are long-term projects spanning four to five years, and I think they are [some] of the rare occasions where clinical trials are actually being carried out in the AI field. The majority of AI tools, in fact, especially in the U.S., have not undergone any clinical trial studies. How the Federal Food, Drug, and Cosmetic Act works is that there is a pathway, which is called a 510(k) pathway. What you need to show as a manufacturer is that your device is substantially equivalent to another legally marketed device, which usually does not require any clinical evidence. We have seen that the majority of the AI-based medical devices that were authorized by the FDA went through the 510(k), so in most cases, there is no necessity to show any clinical data. And so thats what we are seeing. Clinical trials are rare in the field. But, of course, clinical trials should not hamper innovation. Its hard, because if you have a so-called adaptive AI tool that continuously learns, you could have a clinical trial, but how much of the results of the clinical trial data will still help you in the long run, [given that] the tool is constantly changing and adapting? If we are getting fully adaptive systems its going to be even more difficult to make sure that they stay safe and effective. You will probably need to have an ongoing monitoring system in place to be able to tackle that issue.Q: There are many people that are still wary of the idea of AI being used in medical practice. It feels new, and people can be nervous about things that they havent experienced before. What would you say to people with those concerns?A: In general, AI tools can have a lot of potential. I think one also needs to really see what type of AI tool it is. If a physician is using it in practice, I think its really important to be very frank with the patient about it. What are the benefits? What are the risks? What may be issues which are unknown, so that the patient could have the choice to decide whether they want it to be used in their care, at least for the transition phase of where we are. Because at this point, the use of AI is not yet the standard of care. But, of course, the standard of care evolves. During this transition phase, its going to be essential that physicians communicate properly to patients.Q: What do you think SSRN brings to the world of research and scholarship?A: I think SSRN is great because, first of all, its a known platform. Its for free. Everyone can use it: its open access, so thats great. Also, we can upload forthcoming paper drafts early on, so that this can be spread across disciplines to other scholars before its even been published. I think these are all great advantages for scholars in general and give people access to the work as soon as possible.You can see more work by Sara Gerke on her SSRN Author page here.

SSRNThe Emerging Field of Climate Finance with Peter TufanoRecently, SSRN announced the new Climate Finance eJournal, sponsored by the MSCI Sustainability Institute. This area includes content on the application of financial economics to climate change mitigation, adaptation, and resiliency. Subscribe to the Climate Finance eJournal for free here. Harvard Professor Peter Tufano, one of the eJournals editors, spoke with SSRN about climate finance as an emerging field and how his research fits into this growing body of work.Peter Tufano is a Baker Foundation Professor at Harvard Business School (HBS) and Senior Advisor to the Harvard Salata Institute for Climate and Sustainability. From 2011 to 2021, he served as the Peter Moores Dean at Sad Business School at the University of Oxford, where he championed a systems change element to business education. From 1989 to 2011, he was a Professor at HBS, where he oversaw the schools tenure and promotion processes, campus planning, and university relations and was the founding co-chair of the Harvard i-lab. His current work focuses on climate finance, climate alliances, and the financial impact of climate on households. His longer body of research and course development also spans financial innovation, financial engineering, and household finance. He and his co-Editor, Laura Starks, created the collaborative doctoral reading group, The Financial Economics of Climate and Sustainability.Q: Climate finance is an emerging field that has been growing more prominent in recent years. For those unfamiliar with the subject, could you explain what climate finance is?A: Climate finance is a subset of what you might call whole system finance, which is directing large flows of funding to address some of the biggest problems that need to be solved in the world. These problems are very large, very global, have very long time horizons, and sit on the boundary between private and public. Finally, they are consequentialand in the case of climateexistential.One way to solve these problems is to simply say thats the province of government. But often we need the expertise and capital of the private sector. Redirecting not only huge flows of money but also transforming systems, like energy systems, will require the combination of public and private finances and a host of techniques and tools and leadershipacross sectors.The other thing that makes climate finance interesting is its time frame. Most of the time in finance, we dont evaluate projects that have multi-generational outcomes. With any traditional discount rate, something that takes place 60 or 70 years in the future would have a value today of about zero. The normal approaches to valuation pretend as if the long-horizon future doesnt matter. Clearly it does, so that requires us to think a little bit differently.Succinctly, climate finance studies the tools and techniques that will direct large resources and risk-bearing to solve climate and planetary problems.Q: What kind of research is done within this field? What are some of the main goals of research and study within climate finance?A: The climate finance research community is still evolving, with different clusters of researchers pursuing different topics, depending on their prior work. Lets talk about the academic researchers first. If you approach this new field from a traditional academic finance perspective, then youd likely try to figure out how climate will change the way that we think about asset prices, financial intermediaries, household finance, corporate finance, and public finance.If you come from the policy end of finance, you might begin with bigger picture questions. For example, suppose that we were able to make investments to keep us on a 1.5- or 1.8-degree C. trajectory, demanding a meaningful percentage of global GDP. Where would that money come from? What might get crowded out? How would the math work?So depending on where you come from, you will be drawn to different questions. Therefore, we expect a range of approaches within the new SSRN eJournal, as there are already in this emerging field.Q: You serve on the advisory council for the MSCI Sustainability Institute and as a senior advisor to the Harvard Salata Institute for Climate and Sustainability. What insights do these roles give you into the future of where those research subtopics are headed?A: Let me start with the work at Salata. Most universities rely on a set of cylinders of excellence, as one of my colleagues called itmore commonly called silos. This is because in those distinct domain expertise areas, scholars can know their material exceptionally well. Climate, sadly, doesnt respect any academic boundaries. The first insight from the work at Salata is that our disciplinary boundaries are going to have to be more permeable so that we can be aware of and fully consider the science of climate change, the economics of climate change, and the organizational reality of affecting climate change. Addressing climate change rigorously will require the best of all of our disciplines.MSCI is a remarkable organization, and I cant do justice to describe all that it does, but surely, it is preeminent in collecting data that can be used to drive decisions. In this climate space, the data that were going to need will be highly multi-dimensional. As an example, much of finance and financial analysis is not place-based. But with climate issues, place matters. Were going to have to think about the implications of physical locations for the risks to which we are exposed. Just as MSCI has evolved over time to incorporate more and more decision-relevant data, work in climate will demand that use a wider set of data to do cutting edge and relevant research.Q: In a paper you co-authored called The Evolving Academic Field of Climate Finance, you say that the sheer scale of the greenhouse gas induced climate crisis will force us to rethink and refine our financial theories and practices. What would you say are some of the biggest challenges in terms of rethinking those theories and practices, especially considering that so much of this work is still evolving, uncharted territory?A: Let me offer three ideas we need to rethink. First, in any MBA class we value everything on the basis of private benefits to investors. We dont even try to value the social benefits or harms of projects. The first thing we have to do is to broaden how we evaluate projects, firms and initiatives to make more intelligent decisions. Second, again considering valuation, we use discount rates to bring monies back and forth in time. But these discount rates are inappropriate in considering very long horizon outcomes. At a discount rate of 4%, the value of a dollar at the turn of the next century is $0.05. This implies that the value of a human life is worth one-twentieth of a life todaya very important ethical concept. Finally, while we have been indoctrinated to believe that markets solve all problems, the core principles of economics remind us that this will only be true if there are no externalities, which is clearly not the case when the private cost of emissions remains essentially zero.I think students and academics have to be alerted to a broader set of questions. Where this starts, in my mind, is in education. We need to ultimately transform our educational systems and what we teach. But the only way were going to do that is to have professors who understand this space, which is why a number of us got together to found Financial Economics of Climate and Sustainability (FECS), a doctoral course that we offered across 130 schools last year and this year is welcoming research staffs at government agencies. FECS trains the next generation of doctoral students and researchers, who can be the next generation of professors and policy makers, who can then go and intelligently think through these issues and not only produce great research, but [also] communicate it in a way that makes it meaningful.Q: In the paper I mentioned earlier, you talk about the interdisciplinary nature of climate finance and how the vast impact of climate change really blurs the lines between areas of study that may have been distinctly separate before. How do different fields and perspectives help foster research that contributes to these big goals and big questions about sustainability and climate change?A: This evolution will happen in stages. I think the first stage will be the acknowledgement of the importance of this climate topic within disciplines and locating climate issues within existing fields. Before we get to interdisciplinary or multidisciplinary research, lets first understand how it affects each of our disciplines. I think that if we start by staying in our lanes and understanding the implications of climate in say, asset pricing or household finance, we will begin to be open to other disciplines.To foster the kind of true multi-disciplinarity that addresses whole system problems like climate will require confronting inherent tensions in academia. There are, in academia, various norms and practices, like how we evaluate candidates for tenure and which journals publish which papers. For mostly good reasons, both of these tend to use narrow definitions, largely to demonstrate the depth that we demand of excellent work. As a result, tenure decisions and journals are to a large degree defined by our core disciplines, not by the problems we address. There are some problem-based journals, and [the Climate Finance eJournal] is an example.A second, perhaps even more important consideration is, whats the channel to impact? How is it that this research is going to drive action? We need to think and act differently in order to have greater impact, which might involve expanding our definitions of excellent research, substantially improving research communications, or regularly having a new type of sabbatical where scholars can rotate into government and business to increase the impact and relevance of their work.Q: Youve spoken before about the fact that there are a lot of levers, a lot of different ways, to kickstart climate finance and progress. If these mechanisms for change exist, whats holding us back as researchers, businesses, society from acting on solutions? Wheres the turning point to go from theoretical ideas to taking the kind of action that youre talking about?A: Ive used the term kickstart in a number of different contexts, but the physical image of a lever is helpful. Systems change scholars often organize actions in terms of which have the most and the least leverage. What is the long run impact if we can change specific outcomes, [such as] passing a law? What if we routinely measure impact? What if we encourage different levels of collaboration? And at the far end, with the most leverage, how can we change the way that people think about problems?I think that there are promising examples where we are affecting system changes. We start with changing measurable things, and weve seen this in changes in disclosure policies. The huge pushback in the U.S. against climate disclosure almost surely reflects some groups fears that this disclosure would show the harms that they are causing. Blended finance and climate finance is about the merging of public and private fundingnew forms of collaboration. We need to change and create new feedback loops. We are doing that through materializing demand through advanced market commitments where buyers signal future demand by orders in advance. We are seeing change happening through tax policies both carrots (like the U.S. IRA) or sticks (like the European Carbon Border Mechanism). We are seeing change happening through collaboration, and in particular, alliances. We are seeing this change in the discussion moving from shareholder to stakeholder capitalism.We are starting to see people move from this thinking of the climate issue as a nice thing that tree huggers do to something that is going to affect all of us and therefore we all have a responsibility to do something about. If you look at the levers for systems change, which are practical, structural, and cultural, I can see examples of all of them where we are making progress. But not enough progressand not fast enough, according to the most recent science.Q: So there is a bright future ahead in all those areas?A: I dont know if Id say bright future. I, and others this is not my original idea think theres a major difference between optimism and hope. Optimism is a statistical belief that the future will be better, and hope is more of a belief that with certain actions, theres a chance that the future could be better. I dont know that Im an optimistic person, but I am a hopeful person, and I think we have to be.Q: Are there any research focuses specifically you think will be especially promising in the coming years? What kind of things should we keep an eye out for?A: Theres so much new, interesting work going on right now. I was just chairing a session at a big banking conference with new work on how banks are incorporating climate into their lending decisions. My colleagues are doing more exciting work on how the insurance sector can play a bigger role in reducing emissions and in the financing transition. Theres serious and difficult work to hold various groups accountable, by studying those who make promises and then dont follow up on them; or say one thing and then lobby to do other things. We have to call that out. Im hard pressed to think about what there isnt to do.As were launching this SSRN eJournal, the initial base of papers that were going to have will probably be around 1000. In 10 years, I think that number could easily be 10 to 20 times that. Collectively, I hope that these papers will not only add to our understanding of how finance can change the world, but also help turn these ideas into action.Q: What are some of your current research interests?A: I am very interested in climate alliances. The dominant way of thinking in business is that competition is the natural order and societies will progress by firms competing with one another. Surely, thats true to some extent. But in the climate spacewhere there are huge externalitiesthis model breaks down. I think theres potentially an important role for collaboration: both collaboration between firms and collaboration between firms and governments. We need to understand how collaboration in the climate space can complement private competitive activity and government action. We need to study this both theoretically and empirically, and I am working actively on this question. Im also doing some work in the boundary between household finance and climate, linking my old and new research agendas. Finally, Im very excited about new work by young scholars linking insurance and climate and hope to contribute to this very new field.Q: Is there anything else youd like to add about climate finance or your work?A: When I returned to Harvard to teach after a decade of being a Dean at Oxford, I decided that I wanted to teach a doctoral course in climate finance, in part as a service to the school, but also as a way to get current on the latest literature. As a result of doing that, I reached out to people in the profession about what they were teaching in their doctoral classes. I rapidly learned that no major school had a doctoral course on climate finance.So ten of us got together and said, Why dont we collaboratively put together the syllabus? And why dont we teach it across our schools? In 2025, were going to run version 3.0 of Financial Economics of Climate and Sustainability. We will reach doctoral students and researchers at over 100 schools, and this year, well also be welcoming the research staffs at major financial regulators. We summarize the newest content in this space, and each local school customizes the course to fit their own circumstances. Its an example of how collaboration can be catalytic in the climate space, at least in our small way.If you look at the names of the teaching group, they will be familiar because theyre the Advisory Board for this journal and my co-editor, Laura Starks. Whats fascinating is that they all had hugely successful research careers before they pivoted to study climate. This is instructive because it shows that we can transform our research and teaching, starting one person at a time. Finally, we are all doing this as volunteers, for the benefit of a thousand future finance professors. But if we go beyond that, why not make all of this research available even more widely? When I joined the MSCI Advisory Board, I mentioned this idea to them. Id already edited two SSRN eJournals in the past, so it wasnt hard to link MSCI, SSRN, and this amazing group of scholars that I am privileged to work with to create this new Climate Finance eJournal.To see more work by Peter Tufano, visit his SSRN Author page here.Is there an eJournal you want to sponsor? Contact sales@ssrn.com for more information.

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