JPMorgan economists warn of black swan risks from climate change
INTERNATIONAL – JPMorgan Chase & Co. economists warned that standard models on the costs of a “business-as-usual” approach toward climate change may be flawed by failing to incorporate the Black Swan-type risk of pushing the planet into conditions unseen for millions of years.
“There are plenty of non-linear tipping points in the climate system that could make the economic consequences of BAU much more severe,” David Mackie and Jessica Murray, economists at the bank in London, wrote in a note to clients Thursday. BAU stands for business-as-usual. “It is hard to know what weather outcomes will occur. Econometric estimates are based on small deviations in the mean of the probability distribution.”
Mackie and Murray said business-as-usual studies didn’t generally provide the kind of numbers that would motivate governments to take costly climate-mitigation policies now.
Source: iol.co.za