A variety of frameworks can be used for making decisions about climate change ranging from ad hoc response to politics and events to those based in only economics or science. Based on previous NRC reports, the research literature, and on the recent practices of both public and private actors, we have identified iterative risk management as a key element in the decision making process for making sound policy related to climate change because of the opportunities it offers for considering uncertainty and adjusting decisions to experience and new information. For government, as well as organizations such as environmental conservation groups, we find that adaptive governance also provides a useful approach to managing climate change risks, because it allows a revision of policies in response to evolving conditions, new information, and lessons learned.
Climate related decisions confront a number of especially difficult challenges that include the expectation of surprise, the frequent need for long-term decision making, and the potential demands of crisis response. Addressing such challenges requires augmenting the basic iterative risk management framework, incorporating the objectives of multiple actors, using robustness criteria to help manage the deep uncertainties facing many climate related decisions, and embedding the framework in a broader process of institutional learning and adaptive governance.
We find that the assumptions of a number of current decision frameworks may need to be revised given the risks of climate change. For example, the GAO (2007) has already noted that federal insurance programs such as Federal Crop Insurance and National Flood Insurance should take account of the long-term fiscal implications of climate change. The viability and costs of these programs will be seriously affected by climate change as well as policies and programs to manage and adapt to climate impacts and should be reviewed and revised in response to climate science and shifts in policies. Conservation activities by both governments and NGOs must also include climate change and climate policies in their decision frameworks, especially those for adaptation, in order to protect investments and respond to evolving climate risks. Businesses will need to address climate risks in their overall corporate decision strategies. Because most actors must respond to stakeholders, incorporating their views and feedback into decision making processes about climate can also be a useful component of decision frameworks.
Our review of evolving frameworks for risk management in the financial sector suggests that many firms still do not take account of climate risks and that the lack of uniform accounting, disclosure, ratings, and reporting requirements is creating confu-