The risk of climate ruin

Oliver D. Bettis, Simon Dietz () and Nick G. Silver
Additional contact information
Oliver D. Bettis: Institute and Faculty of Actuaries
Simon Dietz: London School of Economics and Political Science
Nick G. Silver: Institute and Faculty of Actuaries

Climatic Change, 2017, vol. 140, issue 2, No 2, 109-118

Abstract: Abstract How large a risk is society prepared to run with the climate system? This is a question of the utmost difficulty and it admits a variety of perspectives. In this paper we draw an analogy with the management and regulation of insurance companies, which are required to hold capital against the risk of their own financial ruin. Accordingly, we suggest that discussions about how much to reduce global emissions of greenhouse gases could be framed in terms of managing the risk of ‘climate ruin’. This shifts the focus towards deciding upon an acceptable risk of the very worst-case scenario, and away from how “avoiding dangerous anthropogenic interference with the climate system” has come to be framed politically. Moreover it leads to the conclusion that, in terms of greenhouse gas emissions today and in the future, the world is running a higher risk with the climate system than insurance companies run with their own solvency.

Keywords: Climate System; Capital Requirement; Climate Risk; Solar Radiation Management; Cumulative Emission (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1007/s10584-016-1846-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:spr:climat:v:140:y:2017:i:2:d:10.1007_s10584-016-1846-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10584

DOI: 10.1007/s10584-016-1846-3

Access Statistics for this article

Climatic Change is currently edited by M. Oppenheimer and G. Yohe

More articles in Climatic Change from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().