Risk Management and Climate Change

Howard Kunreuther, Geoffrey Heal, Myles Allen, Ottmar Edenhofer, Christopher B. Field, Gary Yohe

NBER Working Paper No. 18607
Issued in December 2012
NBER Program(s):   EEE

The selection of climate policies should be an exercise in risk management reflecting the many relevant sources of uncertainty. Studies of climate change and its impacts rarely yield consensus on the distribution of exposure, vulnerability, or possible outcomes. Hence policy analysis cannot effectively evaluate alternatives using standard approaches such as expected utility theory and benefit-cost analysis. This Perspective highlights the value of robust decision-making tools designed for situations, such as evaluating climate policies, where generally agreed-upon probability distributions are not available and stakeholders differ in their degree of risk tolerance. This broader risk management approach enables one to examine a range of possible outcomes and the uncertainty surrounding their likelihoods.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.


Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w18607

Published: Nature Climate Change | Perspective Print Share/bookmark Risk management and climate change Howard Kunreuther, Geoffrey Heal, Myles Allen, Ottmar Edenhofer, Christopher B. Field & Gary Yohe Affiliations Contributions Corresponding author Nature Climate Change 3, 447–450 (2013) doi:10.1038/nclimate1740 Received 29 June 2012 Accepted 09 October 2012 Published online 24 March 2013

Users who downloaded this paper also downloaded these:
Kunreuther and Heal w18136 Managing Catastrophic Risk
Heal and Millner w18929 Uncertainty and Decision in Climate Change Economics
Aghion, Dechezlepretre, Hemous, Martin, and Van Reenen w18596 Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry
Taylor w18606 External Imbalances and Financial Crises
Desmet and Rossi-Hansberg w18546 On the Spatial Economic Impact of Global Warming
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us