Climate risk management requires explicit representation of societal trade-offs

Abstract

Strategies for managing climate-change risks impact diverse stakeholder groups that possess potentially conflicting preferences. Basic physics and economics suggest that reconciling all of these preference conflicts may not be possible. Moreover, different climate risk management strategies can yield diverse and potentially severe impacts across different global stakeholders. These preference conflicts and their uncertain impacts require an explicit understanding of the trade-offs that emerge across different risk management strategies. Traditionally, integrated assessment models (IAMs) typically aggregate the stakeholders’ preferences across the entire globe into a single, a priori defined utility function. This framing hides climate risk management trade-offs as well as the inherent stakeholder compromises implicit to the resulting single “optimal” expected utility solution. Here, we analyze a simple IAM to quantify and visualize the multidimensional trade-offs among four objectives representing global concerns: (i) global economic productivity, (ii) reliable temperature stabilization, (iii) climate damages, and (iv) abatement costs. We quantify and visualize the trade-offs across these objectives and demonstrate how a traditional optimal expected utility policy implicitly eliminates many relevant policy pathways. Explicit trade-off analysis provides a richer context for exploring conflicting global policy preferences and clarifies the implications of alternative climate risk mitigation policies to better inform negotiated compromises.