I was recently tasked to prepare a presentation on the political economy questions of climate change: How expensive is saving the climate? And who should shoulder the costs?

As I prepared the presentation for Dr. Mildner’s “States & Markets” seminar, it occurred to me that to answer these questions, we first have to understand the risks and uncertainties of climate change. The real questions, I thought were then different ones:

• How do we manage risk, and respond to uncertainty?
• How do we treat extreme low probability and high consequence events?
• How do we respond to asymmetric risks?

The more I learned about current risk modeling of the climatic and economic impacts of global warming, the more worried I became. I realized, that climate change (as, incidentally, lessons learned from the financial crisis), requires us to rethink how we manage systemic, interdependent, asymmetric and extreme risks as well as uncertainty.

“Act Now!”

(Friends of the Earth International / The Big Ask)

I agree, we need to act now, and we need to ask strongly.

Yes, this video simplifies. Yes, it dramatizes. And Yes, it scares us.

And it should. For when everything is at stake, alarmism is not irrational, it becomes a moral imperative and different risk management is necessary.
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