Our panel finds that an iterative risk management framework, suitably modified to address some of the novel characteristics of the climate challenge, represents the best available decision framework for climate related decisions. This finding mirrors that of the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (IPCC, 2007b), which states: “Responding to climate change involves an iterative risk management process that includes both adaptation and mitigation, and takes into account climate change damages, co-benefits, sustainability, equity and attitudes to risk.” An iterative risk management perspective uses a suite of tools to approach problems. It does not look at a single set of judgments at one point in time. Rather, the approach provides a basic conceptual structure to make choices that reduce risk, despite uncertain knowledge of the future. An iterative risk management approach also actively updates and refines strategies about complex issues as new information emerges. This kind of decision making is similar to moves in a backgammon or chess game, where pieces are repositioned and risk is reassessed in reaction to the roll of dice or a response from an opponent. In this same way, iterative risk management can be defined as an ongoing process in which the potential but uncertain consequences of climate change and climate policy are identified, assessed, prioritized, managed, and reevaluated in response to experience, monitoring, and new information. The advantage of an iterative risk management approach is that it includes a strategy for responding to climate related risks as conditions change and we learn more about them.

Some scholars use the term adaptive risk management to describe the process of learning from experience and adjusting management in response to new information, with policies sometimes designed as experiments. With either terminology, the panel recognizes that in practice decision makers will employ a variety of frameworks in decision making. They will merge results from multiple sources in refining their intuition and arrive at an informed decision. Overall, iterative risk management is an advisable strategy for climate change decision making because it uses a broad set of concepts and many other frameworks and tools, such as cost-minimization, cost-benefit, and integrated assessment, within its rubric.

Iterative (or adaptive) risk management has been adopted as an overarching approach to the climate change problem by groups that include the United Nations Development Programme (UNDP, 2002), the World Bank (2006), the Australian Greenhouse Office (AGO, 2006), and the U.K. Climate Impacts Programme. A risk management approach is also increasingly adopted, however imperfectly,1 by the private sector, including insurance, agriculture, and in the management of greenhouse gas


Many commentators attribute the 2008 meltdown of the U.S. and global financial systems to improper risk management.

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