Risky Business
Given the potential enormity of the impacts of global warming on society, we must act now to curb global warming pollution. In
the face of potentially devastating future losses, reducing risk makes economic sense. An individual's decision to buy insurance
exemplifies this risk aversity. Most of us do not think twice about buying fire insurance for our homes even though we are not
certain that our houses will burn. Investing in insurance helps us avoid insurmountable costs if extreme events do occur. In
1991, the U.S. alone spent over $300 billion in premiums just for health and property insurance, a clear indication of our desire
to invest in security in an uncertain world (SAUS, 1994, Tables 829-30).
The rationale behind an individual's risk averse behavior applies equally to society as a whole. As Dr. Stephen Schneider, one
of the foremost experts in interdisciplinary climate research, puts it, "... A prudent society hedges against potentially dangerous
future outcomes, just as a prudent person installs insulating glass, repairs a roof, waterproofs a cellar, or buys insurance"
(VanDeVeer and Pierce, p. 597). The United Nations Framework Convention on Climate Change has endorsed this insurance
principle with respect to curbing global warming. Article 3 of the Convention calls for Parties to take "precautionary measures
to anticipate, prevent, or minimize the causes of global warming and mitigate its adverse effects," stressing that "lack of full
scientific certainty should not be used as a reason for postponing such measures" (IEA, 1994, p. 195).
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