Chapter 4.12, Problem 4.51YT

You Decide Climate Change Insurance?

Mitigation of climate change can be seen as a risk–benefit scenario. As such, uncertainty about future effects may discourage governments from taking financially costly actions. Another way of tackling climate change is to view it as a risk-management problem, analogous to the reasons we buy insurance. Having car insurance doesn’t reduce the likelihood of being involved in an accident, but it can limit the costs if an accident should occur. How might the insurance analogy fit in with climate change actions and policies?