Perspective | Published:

Risk management and climate change

Nature Climate Change volume 3, pages 447450 (2013) | Download Citation

This article has been updated


The selection of climate policies should be an exercise in risk management reflecting the many relevant sources of uncertainty. Studies of climate change and its impacts rarely yield consensus on the distribution of exposure, vulnerability or possible outcomes. Hence policy analysis cannot effectively evaluate alternatives using standard approaches, such as expected utility theory and benefit-cost analysis. This Perspective highlights the value of robust decision-making tools designed for situations such as evaluating climate policies, where consensus on probability distributions is not available and stakeholders differ in their degree of risk tolerance. A broader risk-management approach enables a range of possible outcomes to be examined, as well as the uncertainty surrounding their likelihoods.

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Change history

  • 28 March 2013

    In the version of this Perspective originally published online, in the equation in the caption of Figure 1, '–ln(2)' should have read 'ln(2)'. This error has now been corrected in all versions of the Perspective.


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Thanks to Linus Mattauch for research assistance and to Malte Meinshausen for the data used in Fig. 1. Simon Dietz, Kristie Ebi, Christian Gollier, Robin Gregory, Benjamin Horton, Elmar Kriegler, Katharine Mach, Michael Mastrandrea, Anthony Millner, Michael Oppenheimer and Christian Träger provided comments on earlier versions of the paper. Partial support for this research came from the Wharton Risk Management and Decision Processes Center's Extreme Events project, the National Science Foundation (SES-1062039 and 1048716), the Travelers Foundation, the Center for Climate and Energy Decision Making (NSF Cooperative Agreement SES-0949710 with Carnegie Mellon University), the Center for Research on Environmental Decisions (CRED; NSF Cooperative Agreement SES-0345840 to Columbia University) and CREATE at the University of Southern California.

Author information


  1. 3730 Walnut Street, Room 563 Huntsman Hall, Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104-6340, USA

    • Howard Kunreuther
  2. Columbia Business School, 3022 Broadway, New York 10027, USA

    • Geoffrey Heal
  3. School of Geography and the Environment, University of Oxford, South Parks Road, Oxford OX1 3QY, UK

    • Myles Allen
  4. Potsdam Institute for Climate Impact Research, PO Box 601203, D-14412 Potsdam, Germany

    • Ottmar Edenhofer
  5. Mercator Research Institute on Global Commons and Climate Change, Torgauer Straße 12–15, D-10829 Berlin, Germany

    • Ottmar Edenhofer
  6. Department of Global Ecology, Carnegie Institution for Science, 260 Panama Street, Stanford, California 94305, USA

    • Christopher B. Field
  7. Wesleyan University, 238 Church Street, Middletown, Connecticut 06459, USA

    • Gary Yohe


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H.K. and G.H. provided the conceptual framework for this Perspective. After sharing a preliminary draft with M.A., O.E. C.F. and G.Y., all authors contributed equally.

Competing interests

The authors declare no competing financial interests.

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Correspondence to Howard Kunreuther.

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