Day Five: Everything You Need to Know About Global Warming in Thirteen Days

"5) Skeptics argue that the wide range of uncertainty about future temperature changes lowers the need to act: “Why spend money when you’re not certain?” But since the penalties can rise at an accelerating rate at the tail, a wider range implies a greater risk (and a greater expected value of the costs.) This is logically and mathematically rigorous and yet is still argued."

Most debate over human-caused climate change centers around the science.  But most of us are not equipped to discuss the details of the science.  The question should really center around the idea of risk management, which is what Mr. Grantham is getting at above.  Here is the best way of thinking about the question from that perspective that I have seen to date.

[This one of a series of daily posts I am drawing from Jeremy Grantham's Summer 2010 Investment letter.  Mr. Grantham is on the Board of Directors of GMO LLC, a global investment firm with over $100 billion under management.  Mr. Grantham takes a large, worldview perspective on investments--with an eye toward long-term trends.  He is right-on about the impact of global warming.]

No comments:

Post a Comment