Risk Management Solutions for Climate Change–Induced Disasters

Howard Kunreuther

Risk Analysis, 2020, vol. 40, issue S1, 2263-2271

Abstract: In honor of the 40th anniversary of Risk Analysis, this article suggests ways of linking risk assessment and risk perception in developing risk management strategies that have a good chance of being implemented, focusing on the problem of reducing losses from natural hazards in the face of climate change. Following a checklist for developing an implementable risk management strategy, Section 2 highlights the impact that exponential growth of CO2 emissions is likely to have on future disaster losses as assessed by climate and social scientists. Section 3 then discusses how people perceive the risks of low‐probability adverse events and the cognitive biases that lead them to underprepare for future losses. Based on this empirical evidence, Section 4 proposes a risk management strategy for reducing future losses using the principles of choice architecture to communicate the likelihood and consequences of disasters, coupled with economic incentives and well‐enforced regulations.

Date: 2020
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https://doi.org/10.1111/risa.13616

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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:40:y:2020:i:s1:p:2263-2271

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