publication . Preprint . Other literature type . Article . 2009

Climate Change and Risk Management: Challenges for Insurance, Adaptation, and Loss Estimation

Carolyn Kousky; Roger Cooke;
Open Access
  • Published: 03 Feb 2009
Abstract
Adapting to climate change will not only require responding to the physical effects of global warming, but will also require adapting the way we conceptualize, measure, and manage risks. Climate change is creating new risks, altering the risks we already face, and also, importantly, impacting the interdependencies between these risks. In this paper we focus on three particular phenomena of climate related risks that will require a change in our thinking about risk management: global micro-correlations, fat tails, and tail dependence. Consideration of these phenomena will be particularly important for natural disaster insurance, as they call into question traditi...
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free text keywords: tail dependence, micro-correlations, fat tails, damage distributions, climate change, jel:Q54, jel:G22, jel:C02, Geography, Environmental planning, Climate change, Diversification (marketing strategy), Risk management, business.industry, business, Interdependence, media_common.quotation_subject, media_common, Natural disaster, Global warming, Securitization, Effects of global warming

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Weitzman, M. 2008. On Modeling and Interpreting the Economics of Catastrophic Climate Change, forthcoming in the Review of Economics and Statistics.

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