There is nothing like a paper on "mega-catastrophes" to begin the new year with a bang. Excellent work.
The small but uncertain possibility that the world could be ending as we know should appeal to economists everywhere.
Responding to Threats of Climate Change Mega-Catastrophes [PDF]
Carolyn Kousky, Olga Rostapshova, Michael Toman, and Richard Zeckhauser
There is a low but uncertain probability that climate change could trigger “mega-catastrophes,” severe and at least partly irreversible adverse effects across broad regions. This paper first discusses the state of current knowledge and the defining characteristics of potential climate change mega-catastrophes. While some of these characteristics present difficulties for using standard rational choice methods to
evaluate response options, there is still a need to balance the benefits and costs of different possible responses with appropriate attention to the uncertainties. To that end, we present a qualitative analysis of three options for mitigating the risk of climate mega-catastrophes—drastic abatement of greenhouse gas emissions, development and implementation of geoengineering, and large-scale ex ante adaptation— against the criteria of efficacy, cost, robustness, and flexibility. We discuss the composition of a sound portfolio of initial investments in reducing the risk of climate change mega-catastrophes.
Key Words: climate change, catastrophe, risk, decisionmaking under uncertainty
JEL Classification Numbers: D81, Q54