Module 4: Risk Under Deep Uncertainty
Activity
Activity
For this week’s activity, I’m asking that we all reflect on the limitations of financial approaches to decision-making in light of deep uncertainty and non-negligible probabilities of catastrophic losses.
Things to consider in your reflection:
- How should deep uncertainty be represented in decision-making?
- To what extent are financial decision-making models suitable for decisions under deep uncertainty, and to what extent might they endorse insufficient action undertaken within inadequate timelines?
- Would the precautionary principle be a more suitable decision criteria than cost-benefit? Or another decision-making principle?
- Do we rely on financial models because they are salient to stakeholders and more reliably motivate action? If so, are they a necessary evil in the area of climate action?
- After your reflect on these topics, post a brief summary of your insights to the Moodle discussion board for Module 4. It is not necessary to address all of the above points in your contribution.