Tuesday, March 9, 2010

Playing the climate change odds

Jennifer Weeks in the Book of Odds: …When people face risks with potentially serious consequences in daily life, they often buy insurance. The odds that a US homeowner has home insurance are 1 in 1.05 (95%), and the odds that a single family home in a special flood hazard area has flood insurance are 1 in 2.03 (This kind of special coverage can be very expensive, so some people decide that the risk doesn’t justify paying high premiums).

If we’re facing some degree of climate change and the effects could be disastrous, it might seem that national insurance—in this case, policies to reduce greenhouse gas emissions—would be a prudent investment. The problem is that individuals can choose how much personal insurance to buy based on their own tolerance for risk, but national climate policies make everyone pay the same premium. After years of debate, there’s still little agreement in the US on what costs are justified to slow climate change, especially when Americans are worried about economic growth and job losses.

But here’s a further twist: as climate change worsens, we all incur growing risk to our homes, property, and health. Especially if nations don’t agree on reducing GHG emissions, we may all end up paying more for individual insurance against weather risks and natural disasters instead. Whether you’re a gambler or not, you can’t get out of the climate roulette game.

Gambling circa 1800

1 comment:

GreenMyParents said...

Starting with 100 youth champions, GreenMyParents’ goal is to activate 1 million kids to save their families $100 each for a wakeup-call of $100 Million in savings, convincing parents, teachers, business owners and elected officials that stalling on climate change is expensive and bad for the economy.