Risk, Ambiguity and Climate Change

Presenter
Geoffrey Heal
Park Donald C. Waite III Professor of Social Enterprise
Professor of Finance & Economics
Columbia Business School

Abstract
The selection of climate policies should be an exercise in risk management, reflecting the many relevant sources of uncertainty.  There are important uncertainties not only in projections of climate change for any development pathway but also in the development pathway itself, its consequences for exposure and vulnerability, and the way that these factors interact to produce impacts. Successful risk management requires information on the range of possible outcomes and, ideally, on their likelihoods. Increasingly, studies of climate change and climate-change impacts place a priority on characterizing uncertainty, but this rarely extends to consensus on the distribution of exposure, vulnerability, or possible outcomes.  This paucity of probabilistic information greatly reduces the scope for policy analysis based on expected utility theory and benefit-cost analysis. It highlights the value of robust decision making tools designed for situations where generally-agreed probability distributions are not available and stakeholders differ in their degree of risk tolerance.

Date
Thursday, October 4, 2012
12:00 - 1:30 p.m. Lunch will be provided. Location
7th Floor Conference Room
1616 P St. NW
Washington, D.C. 20036 All seminars will be in the 7th Floor Conference Room at RFF, 1616 P Street NW. Attendance is open, but involves pre-registration no later than two days prior to the event. For questions and to register to an event, please contact Khadija Hill at [email protected] (tel. 202-328-5174). Updates to our academic seminars schedule will be posted at www.rff.org/academicseminarseries.