Risk Assessment and Rationality in Climate Policy Prof Douglas Crawford-Brown Director Cambridge Centre for Climate Change Mitigation Research

From policies to mechanisms Strategies Action plans Instruments Mechanisms

Options for policy makers Regulations – Do it or I hit you Permits – Do it or you can’t operate Prices – Do it or your costs rise (issue of re-cycling revenue) Standards – Do it or you won’t get planning permission Information – You would do it if only you knew… De-risking – I will be the backstop for your investment Public projects – I will do it myself (and you can tag along) Subsidies – I will get you over the Valley of Investment Death Public relations – I will name, shame or celebrate you Transfers – I will facilitate transfer of finance, technology, knowledge Voluntary agreements - Do it if you wish, and perhaps I can facilitate?

Co-impacts of climate policy • If they are co-benefits, they can be used to marshal additional political support for policies of decarbonisation Co-impacts tend to be more immediate than climate change itself • Inclusion of co-impacts provides a more complete understanding of the multiple effects of a policy, improving the ability to inform multi-attribute decisions • Assessment of co-impacts provides a more balanced, macroeconomic perspective on the net costs and benefits of a policy to and within society • Co-impacts may reveal a multiplier effect of policies in the economy, better characterising the beneficiaries of those policies • Identification of co-impacts provides insights into where hurdles might be encountered in implementing policies of decarbonisation, and how they might be overcome

Solving Problems Problem formulation Risk assessment Risk management NAS “Red Book” (Risk Assessment in the Federal Government: Managing the Process): There is a need to keep risk assessment and risk management as separate as possible, or the latter will drive the former

Conceptions of risk Objective: risk is a property of the world, summarized by probability of effect, severity of effect, etc. Subjective: risk is a feeling that a situation is dangerous, is not susceptible to control, is poorly understood, etc. Psychologistic: risk is a condition in which available evidence makes it reasonable to assume that adverse effects might occur

Risk: The total potential or possible loss of value in a situation involving (i) a risk agent, (ii) an organism at risk and (iii) a setting bringing the organism in contact with the agent In risk assessment, potential or possible refers to the probability of effect and/or fraction of people with the effect. Loss of value refers to the severity of the effect (its impact on the quality of life)

Risk Assessment Stages Hazard identification: Is this agent capable of producing adverse effects? Under what conditions? Exposure assessment: How much of this agent is actually in the environment? Exposure-response assessment: How does response change with level of the agent? Risk characterization: What is the risk? How does it vary, and how confident are we in the results of the assessment?

3 kinds of secondary analyses Variability analysis: How does the risk vary across the members of a population? Uncertainty analysis: What is the range of values the risk might plausibly have, given uncertainty in data and models? Sensitivity analysis: Which aspects of the risk assessment (e.g. specific models and data) contribute most significantly to the uncertainty?