“Even though scientific understanding of climate change and its possible impacts have increased dramatically in recent years, there will still be uncertainties in the future that have to be evaluated by decision makers,” says Ottmar Edenhofer, chief economist at PIK and director of the Mercator Research Institute on Global Commons and Climate Change (MCC). “Robust strategies for managing risks could fill a gap here.” Edenhofer and Howard Kunreuther from Wharton School of the University of Pennsylvania, Geoffrey Heal from Columbia Business School, Myles Allen from the University of Oxford, Christopher B. Field from the Carnegie Institution for Science and Gary Yohe from the Wesleyan University point out how risk management could improve decision making in spite of uncertainties – for instance by defining justifiable financial losses or limits of acceptable developments.
Some risks associated with climate change are so significant that the best possible coverage might seem necessary even though the exact probability of an incident remains unclear. Climate models work on the best possible level of knowledge with different possible scenarios of the future and therefore do not deliver universal results but potential ranges of results in relation to specific terms. For builders of embankments and other decision makers, worst-case scenarios can be of great importance and need to be communicated by science accordingly. In the insurance industry, risk management is already daily business. Floods and storms are only some examples of factors that are incalculable but nonetheless have to be allowed for.
Article: Kunreuther, H., Heal, G., Myles A., Edenhofer, O., Field, C.B., Yohe, G. (2013): Risk management and climate change. Nature Climate Change [doi:10.1038/nclimate1740]
Weblink to the article: http://www.nature.com/nclimate/journal/vaop/ncurrent/full/nclimate1740.html
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