Risk Management and Climate Change

Howard Kunreuther, Geoffrey Heal, Myles Allen, Ottmar Edenhofer, Christopher B. Field and Gary Yohe ()

No 18607, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The selection of climate policies should be an exercise in risk management reflecting the many relevant sources of uncertainty. Studies of climate change and its impacts rarely yield consensus on the distribution of exposure, vulnerability, or possible outcomes. Hence policy analysis cannot effectively evaluate alternatives using standard approaches such as expected utility theory and benefit-cost analysis. This Perspective highlights the value of robust decision-making tools designed for situations, such as evaluating climate policies, where generally agreed-upon probability distributions are not available and stakeholders differ in their degree of risk tolerance. This broader risk management approach enables one to examine a range of possible outcomes and the uncertainty surrounding their likelihoods.

JEL-codes: C02 Q54 (search for similar items in EconPapers)
Date: 2012-12
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-rmg and nep-upt
Note: EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Nature Climate Change | Perspective Print Share/bookmark Risk management and climate change Howard Kunreuther, Geoffrey Heal, Myles Allen, Ottmar Edenhofer, Christopher B. Field & Gary Yohe Affiliations Contributions Corresponding author Nature Climate Change 3, 447–450 (2013) doi:10.1038/nclimate1740 Received 29 June 2012 Accepted 09 October 2012 Published online 24 March 2013

Downloads: (external link)
http://www.nber.org/papers/w18607.pdf (application/pdf)

Related works:
Journal Article: Risk management and climate change (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:18607

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w18607

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().