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The natural world. Looking pretty for 3.5b years.

Risky Business

Author: Hugh Bollinger/Thursday, June 26, 2014/Categories: sustainability, environment, climate change

Risk analysis is a management tool used in business to identify and assess factors that could jeopardize the success of a project. The methods are widely used in financial investment decisions, insurance planning, and engineering studies. It is now being applied to climate change and the economy.

According to the definition, risk analysis develops strategies to manage threats, uncertainties with negative consequences, and includes: transferring the threat to a third party; avoiding the threat; reducing the negative effect or probability of the threat or even accepting some or all of the potential or actual consequences of a particular threat; and the opposites for opportunities of uncertain future conditions with benefits.

Henry Paulson, Michael Bloomberg, and Thomas Steyer, co-chairs of  Risky Business , have released a report showing how risk management methods can be applied to climate change threats.



Their report, The Economic Risks of Climate Change in the United States , shows that damages from storms, flooding, and heat waves are already costing local economies billions of dollars. It also presents the costs of inaction in ways that are easy to understand and impossible to ignore.

The organization's research focused on the clearest and most economically significant of  climate change risks: damage to coastal property and infrastructure from rising sea levels and increased storm surge, climate-driven changes in agricultural production, national energy demand, and the impact of higher temperatures on labor productivity and public health. The report didn't offer solutions to the risks they identified---the authors indicated that local, state and national decisions would be required---but they did indicate that the most efficient way for a market economy to deal with the economic risks was to place a price on carbon pollution as the most equitable approach and would encourage the widest diversity of solutions.

The Economic Risks of Climate Change in the United States should be required reading for everyone.

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