Skip navigation
New Orleans parking lot after Hurricane Katrina; crashed bus, trash thrown around by storm
Project

Modelling Risk in Climate Economics

Inactive project

2011–2012

Project contact

Sturle Simonsen Hauge

Related people

Climate change involves uncertain probabilities of catastrophic risks, and very long-term consequences of current actions. Climate economics, therefore, is centrally concerned with the treatment of risk and time. Yet conventional assumptions about utility and optimal economic growth create a perverse connection between risk aversion and time preference, such that more aversion to current risks implies less concern for future outcomes, and vice versa. SEI set out to address this problem, adopting methods from the economics of finance. The result was a working paper, linked below.

Related centres
SEI US

Design and development by Soapbox.