Managing Climate Risk

Abstract

Stabilization of atmospheric greenhouse gas (GHG) concentrations at a safe level is a paradigm that the scientific and policy communities have widely adopted for addressing the problem of climate change. However, aiming to stabilize concentrations at a single target level might not be a robust strategy, given that the environment is extremely uncertain. The static stabilization paradigm is based primarily on two assumptions: (i), that a safe level of GHG concentrations exists and can be sustained, and (ii) that such a level can be determined ex ante. The United Nations Framework Convention on Climate Change (UNFCCC) calls for stabilization of GHGs at a safe level, and it also prescribes precautionary measures to anticipate, prevent, or minimize the causes of climate change and mitigate their adverse effects...