Tag Archives: climate change

Have the Kids Started Caring?

Back in 2011, I wrote a blog post called “Do the Kids Care?” about the attitude of young people toward climate change. The tentative conclusion was they cared less due to their limited experience of risk. Today (15th February 2019) was a day when many of them certainly seemed to care. I had the pleasure of attending a rally in Oxford (part of the #SchoolStrikeforClimate movement), which was inspired by the 16-year old climate activist from Sweden Greta Thunberg.

 
So have global youth undergone a Damascene conversion and suddenly realise the existential threat they face from climate change? Probably not, but I hope that something significant is emerging  here: at least a realisation by youth that they will be expected to clear up the CO2 pollution party from hell thrown by their parents and grandparents.

The jury is out over whether this movement has staying power, but in the meantime the next school student strike is going global and takes place on 15th March; details can be found here:

https://www.facebook.com/events/1994180377345229/

So get out there and give Greta and all the other kids a helping hand!

IMG_0010

And in the meantime, here is my original post from 2011:

Climate change, if nothing else, is a time horizon risk: the longer you live, the more you are exposed to climate change and its impacts. Thus, to follow the logic, the old (and especially childless) should be less sensitive to climate change risk than the young. (For the different question of “Should the kids care?” see ‘Odds of Cooking the Kids’ here, here and here.) But do the young care?

survey last year suggests the young care a little less about climate change than anyone else. This seems rather strange, since the young adults involved would have had a high exposure to the topic from early adolescence both through the media and school.

The first Climate Change Conference took place in Geneva 1979 a few years after a landmark paper by Wally Broecker in 1975 established a link between anthropogenic (human) CO2 emissions and temperature rise. The Intergovernmental Panel on Climate Change (IPCC) was established in 1988, but it probably took another decade before the topic spilled out of the academic community and into the public domain.

By around 2006 or 2007, few people would have remained unaware of the issue, even if they differed about the causes and severity of the problem. The documentary ‘An Inconvenient Truth’ show cased Al Gore’s campaign to educate citizens about the dangers of global warming and received extensive publicity. Meanwhile, the IPCC’s Fourth Assessment Report declared that human-caused factors were ‘very likely’ the cause of climate change and was widely reported. In retrospect, these years appear to have seen the high water mark for public awareness of the risks from climate change (partly because carbon-industry financed lobby groups had only just started to enter the debate on the skeptics’ side).

For a younger generation, the general media buzz over climate change was also supplemented by information they received via their school curricula.

In the UK’s case, a child in high school in the 1980s would only have come across climate change in school if introduced to the topic by an enthusiastic science teacher. In 1995, however, climate change was formally introduced into the National Curriculum, and nowadays a pupil has no choice but to bump up against it in variety of contexts including science, geography and even, occasionally, religious education.

In the United States, the federal, state and local involvement in education have made the delivery of climate change education a little more variable between schools. Nonetheless, there appears to be a consensus among teachers that climate change is taking place and that it should be taught. A position paper (here) from the US National  Association of Geoscience Teachers (NAGT) is unequivocal:

The National Association of Geoscience Teachers (NAGT) recognizes: (1) that Earth’s climate is changing, (2) that present warming trends are largely the result of human activities, and (3) that teaching climate change science is a fundamental and integral part of earth science education.

The National Association of Science Teachers (NSTA) is a little less forthright on the subject, but in a 2007 NSTA President’s report  entitled ‘Teaching About Global Climate Change’ we see this:

Central to environmental literacy is students’ ability to master critical-thinking skills that will prepare them to evaluate issues and make informed decisions regarding stewardship of the planet. The environment also offers a relevant context for the learning and integration of core content knowledge, making it an essential component of a comprehensive science education program.

Two of the most reliable sources of information for classroom teachers are the National Oceanic and Atmospheric Administration and the United Nations Intergovernmental Panel on Climate Change, both offering materials that are scientifically based and bias-free.

No prizes for bravery here, but by endorsing two sources that document the risks related to human-induced climate change, the NSTA in effect is adopting a similar position to the NAGT—but at one remove. The NSTA’s reticence is obviously because science teachers who promote awareness of the problem are likely to receive a lot of push-back; an NSTA survey (here) gives a sense of this:

(Rather disappointingly for a science-based organisation, neither the number of educators who responded nor the climate change beliefs of the responding educators were reported, rendering any firm conclusions problematic).

Overall, however, for those students who had not already taken a firm position vis-a-vis the veracity of human-induced climate change from their parents, the senior school experience over the last 10 years or so would have taught most of them that the climate is changing and anthropogenic carbon emissions are to blame (based on scientific evidence). For those 1990s high school graduates, the school input on the topic would likely have been far more mixed. But by contrast, anyone over 35 is unlikely to have come across climate change at school.

So back to the survey—conducted jointly by the American University, Yale University and George Mason University—titled ‘The Climate Change Generation?’ The generation in question as per the survey definition was a sample of 1001 adults aged between 22 and 35 as of when the survey took place (between December 24, 2009 and January 3, 2010).

Given the educational backdrop of the ‘Climate Change Generation’ we get two immediate counter-intuitive findings from the survey. Younger people neither think about climate change more nor worry about it more (or at least no more than others):

And this being a risk blog, I am particularly interested in people’s perceptions of the personal harm they could incur. Again, the young don’t appear particularly concerned.

Moreover, despite the impression that climate change concern (and activism) is a province of the young (and almost a social norm these days), the data just don’t show this to be true:

Could it be that factor ‘youth’ is not determining the direction of the survey responses  (and when it does, the sign is opposite of what one would expect) because the ‘old young’, who had come of age in the 1990s when climate change was less reported, were diluting the signal in the data? The answer to this is ‘no’ since the survey also split the young adults into two cohorts: in effect, the ‘young young’ and the ‘old young’. Note the answer ‘not at all worried about global warming’ at the bottom of the chart sees the ‘young young’ the least concerned of all:

On reflection, it appears that education has had no impact on the brain’s perception of risk, which takes us into the realm of cognitive psychology. A traditional view of the risk appetite of adolescents has suggested that they have a feeling of invulnerability (and perhaps this extends to those in their twenties as well). However, more modern findings such as a paper by Cohn et al entitled ‘Risk Perception: Differences Between Adolescents and Adults’ suggests this is not the case:

Adolescent involvement in health-threatening activities is frequently attributed to unique feelings of invulnerability and a willingness to take risks. The present findings do not support either proposition and instead suggest that many adolescents do not regard their behavior as extremely risky or unsafe. Compared with their parents, teenagers minimized the harm associated with periodic involvement in health-threatening activities. Ironically, it is periodic involvement in these activi- ties that jeopardizes the health of most adolescents. Thus teenagers may be underestimating the risk associated with the very activities that they are most likely to pursue, such as occasional intoxication, drug use, and reckless driving.

So to get a better idea of what is going on, it is worth moving on to the field of heuristics and biases in the perception or risk, which has become a key area of study in economics and finance over the last 30 years. This new area of investigaton was kicked off by the pioneering work of Nobel Laureates Daniel Kahneman and Amos Tversky; a good and accessible summary of the work can be found in Kahneman’s recent book “Thinking fast and slow“.

One critical finding was the distinction between ‘choice from experience’ and ‘choice from description’. Experimental data show that rare outcomes are overweighted when they are vividly described but are frequently underweighted if they are abstract. By extension, a more abstract threat, like harm from radiation, may be overweighted as a risk as it calls forth rich associations that provide a vivid description: for example, images from Chernobyl, a scene from the movie ‘China Syndrome’ or a picture of a child atom bomb victim suffering from radiation sickness.

Keeping this in mind, climate change risk is rather difficult to grasp in terms of the potential impact on oneself: no photos of dying babies to give us a descriptive representation—or at least only abstract theoretical ones.

Furthermore, risks are underweighted if we have no experience of them. The experience can also go beyond one’s own experience and encompass those of others. Accordingly, a particular teen or adult may not have experienced an auto crash through reckless driving, but it is almost certain that the adult will know someone personally, either family or friend, who has suffered from a reckless driving act. They thus get an experience boost by proxy.

Thankfully, few of us have yet to experience severely negative effects from climate change. However, an elderly person is more likely to have experienced, or known someone who has experienced, a rare event that gives them a proxy association of climate risk. Through having touched on the experience of war, flood  and other natural disasters (and possibly even famine for immigrants from low income countries), older people are better aware that ‘ really bad stuff’ happens.

In all this, sets of statistical tables showing objective probabilities have far less impact on people’s perceptions of risk than one would expect if humans were no more than purely rationale calculating machines. Presenting a person with a dry set of stats will barely move the risk perception needle—whether the subject is vulnerability to HIV infection or the destruction of the planet. We are just not built that way (even if we did do some stats at school).

Critically, though, the old perceive only a little more climate change risk than the young. Humans, as a whole, look like a teenager engaging in unprotected sex when it comes to global warming. Whether this poor risk perception can be changed is something I want to return to in a future post.

Data Watch: UAH Global Mean Temperature December 2013 Release

On January 3rd, Dr Roy Spencer released the University of Alabama-Huntsville (UAH) global average lower tropospheric temperature anomaly as measured by satellite for December 2013.

The anomaly refers to the difference between the current temperature reading and the average reading for the period 1981 to 2010 as per satellite readings.

December 2013: Anomaly +0.27 degrees Celsius

This is the joint 2nd warmest December temperature recorded since the satellite record was started in December 1978 (35 December observations). The warmest December to date over this period was December 2003, with an anomaly of +0.37 degrees Celsius.

As background, five major global temperature time series are collated: three land-based and two satellite-based. The most high profile satellite-based series is put together by UAH and covers the period from December 1978 to the present. Like all these time series, the data is presented as an anomaly (difference) from the average, with the average in this case being the 30-year period from 1981 to 2010. UAH data is the earliest to be released each month.

The official link to the data at UAH can be found here, but most months we get a sneak preview of the release via the climatologist Dr Roy Spencer at his blog.

Spencer, and his colleague John Christy at UAH, are noted climate skeptics. They are also highly qualified climate scientists, who believe that natural climate variability accounts for most of recent warming. If they are correct, then we should see some flattening or even reversal of the upward trend within the UAH temperature time series over a long time period. To date, we haven’t (click for larger image).

UAH Dec 2014 jpeg

That said, we also haven’t seen an exponential increase in temperature either, which would be required for us to reach the more pessimistic temperature projections for end of century. However, the data series is currently too short to rule out such rises in the future.

One of the initial reasons for publicising this satellite-based data series was due to concerns over the accuracy of terrestrial-based measurements (worries over the urban heat island effect and other factors). The satellite data series have now been going long enough to compare the output directly with the surface-based measurements. All the time series are now accepted as telling the same story (for a fuller mathematical treatment of this, see Tamino’s post at the Open Mind blog here).

Note that the anomalies produced by different organisations are not directly comparable since they have different base periods. Accordingly, to compare them directly, you need to normalise each one by adjusting them to a common base period.

Stuart Staniford, Climate Change and Food Production

Over the last few days, one of my favourite bloggers, Stuart Staniford of Early Warning, has done a couple of posts looking at the impact of climate change on food production. I generally agree with most of what Stuart writes, but on this occasion I have a number of major caveats. Indeed, I think his analysis paints a far too rosy picture of agricultural production in an era of climate change.

Before we start, we need to be a little careful about equating extreme weather with climate change. Given that we are in the foothills of global temperature rise, we can’t specifically assign particular events to climate change. The whole question needs to be looked at in probabilistic terms. Here is Bob Corell, Jeff Masters and Kevin Trenberth writing an opinion piece in Politico after Hurricane Sandy.

Overall, we know that climate change has stacked the deck so that this kind of event happens more frequently. That answer, however, prompts a deeper, more unsettling question that many want to know: is climate change worsening some recent extreme weather events like super storm Sandy? The short answer is yes. Climate scientists broadly agree that the extreme weather we’ve seen over the past few years is exactly what we’d expect to see in a changing climate.

So while we can’t definitely say that climate change is responsible for recent extreme weather events that have disrupted food production, we can say that climate change makes such events more likely and more extreme.

Nonetheless, for the sake of argument, let’s just hypothesise for a minute that recent extreme weather events such as the droughts in Australia, the U.S. and Russia are due to climate change. I will run with this assumption because Stuart appears to be claiming that regardless of how we categorise recent extreme weather events, they are not showing up in the agricultural production data—or, ultimately, in people’s stomachs.

In his first post on the subject, titled “Climate Change Still Not Affecting Global Cereal Yields“, Stuart reiterates a conclusion made two years previously:

So, clearly, the overwhelming story in global agricultural yields is this: improving agricultural technology has increased yields at a steady, reliable pace – they have more than doubled over the last 50 years. There just is absolutely no support in the data for the idea that climate change, or any other negative or scary factor you care to name – eroding soil, depleting aquifers, peaking oil supplies – is causing the agricultural yield curve to start bending downward. Maybe they will in the future, but it sure isn’t happening yet.

And he updates and republishes this chart to reinforce the point:

Global Cereal Yields jpeg

Which allows him to reach this conclusion which does not just cover yields but also overall production:

Climate change is scary, we are clearly melting the north pole, droughts and floods and heat waves are increasing over time. However, so far, it’s not hitting us where it would really hurt: in the stomach.

The chart looks like compelling evidence that climate change is not showing up in food production, but there are a number of problems. Continue reading

The Idiocy of Dieter Helm and Bridge Fuels to Nowhere

In U.K. policy circles, it has become increasingly fashionable to believe that we can rely on natural gas as a bridge fuel to a non-carbon energy nirvana some time in the indeterminate future. In the meantime, let’s dump renewables: just too expensive.

Shale gas has also become a neoclassical wet dream. Here is Dieter Helm, the most vocal supporter of shale gas in the U.K., in The Spectator:

Shale oil and gas were not the result of any radical technological revolution, but rather of a combination of advances in seismic information technologies, horizontal drilling and the ability to split open rocks at depth. Why did it happen? Part of the answer is the incremental process of innovation, combined with rising prices of oil and gas innovation plus markets.

Innovation plus markets: truly the neoclassical saviour of all our ills (and don’t forget that fracking technology was born out of government financed R&D, tax credits and infant industry support; see here). My frustration with this line of argument is that it claims to be based on markets, but makes no reference to actual market prices and volumes. If ‘innovation plus markets’ is our salvation then gas volumes will rise and prices will fall (or at least go sideways). Simple really.

In short, we now have a testable hypothesis: the hypothesis being that the bridge fuel of natural gas  at the right price and volume will part the Red Sea and give us 20 or so years of R&D time to transcend fossil fuels altogether. So, Dieter, give us a price and volume number to test your hypothesis. I search within his book “The Carbon Crunch” in vain. Some solid numbers to buttress his assertions: not a chance!

Meanwhile, Helm also says it would be nice to have a carbon tax (it would be nice if we could have peace on earth too, and the lamb lie down with the lion and….well, you get my drift).

Overall, his argument goes like this: gas should get sort of cheaper and therefore get sort of more plentiful, and therefore we sort of use less coal, and so we sort of don’t need so many renewables (which are expensive anyway), and R&D should sort of possibly come up with non-carbon energy alternatives at some vague time in the future. And meanwhile we sort of manage to introduce a carbon tax.

This must be the most pathetic policy prescription in the history of academia.

So what is actually frigging happening. First, U.S. natural gas production is going sideways. I blog on this each month.

US Dry Gas Production January 2013 jpeg

Continue reading

Margaret Thatcher’s Climate Change Legacy: A Tail of Two Halves

Margaret Thatcher leaves a mixed legacy on climate change. As an original climate hawk, she was instrumental in helping to launch the Intergovernmental Panel on Climate Change (IPCC) back in 1988 and also in promoting the U.K.’s climate change research capabilities though the foundation of the Met Office Hadley Centre for Climate Change in 1990. You can get a taste of her early stance in this short video here:

In her later writings, however, she recanted and became a hero to the climate skeptic cause.

Thatcher’s original engagement came via the career diplomat Sir Crispin Tickell. In 1975, Tickell took a sabbatical at Harvard University during which he first became acquainted with the science of climate change (although as an undergraduate he studied Modern History at Oxford). His interest in the subject culminated in the publication of a book called “Climate Change and World Affairs”. This is now out of print, but you can find an article summarising his ideas in the April 1986 edition of the scholarly publication Eos, Transactions American Geophysical Union here. Even today, the article appears quite fresh; for example read the conclusion:

The measures proposed may seem puny in relation to the problems that we face. Even such measures present major difficulties, and agreement on them may not be feasible until the need becomes more manifest. Yet the hazards of inaction are very real. The pleas­antly warm moment that we now enjoy will not last for ever. The world itself is changing, partly through our own actions, and we face intimidating responsibilities as a result. We have no option but to meet them.

Tickell was asked by Thatcher to become Permanent Secretary in the Overseas Development Administration in the early 1980s. Subsequently, he caught Thatcher’s attention during a flight to Paris in 1984. She had asked whether the assembled officials around her had any agenda ideas for the next G7 meeting to be held in London. Tickell proposed climate change and as a result was invited the next day to Downing Street to brief Thatcher on his ideas. From then on, he advised Thatcher on various environmental issues on an informal basis. In an interview given as part of Churchill College’s British Diplomatic Oral History Programme (BDOHP), Tickell stressed how Thatcher was drawn to scientific topics given her background. (For an in-depth piece on how Thatcher’s scientific background influenced her policy making see this article for the Royal Society by Jon Agar here.)

Margaret Thatcher much prided herself on being the only scientist in her government. Anything that related to science she took a particular interest in, and almost felt that she owned it. Some of her views were radical and didn’t always fit the other views she heard from others. The main advice she got was, of course, from the civil service machine. I came back from New York to attend two meetings for her. I think she regarded me as someone useful who could stir the pot for her, and perhaps challenge the orthodox wisdom, whatever it might be.

Part of Tickell’s remit was to float various policy ideas that may be of interest to Thatcher and support her political profile. Out of such a pitch came the genesis of the grounding-breaking speech given by Thatcher at the Royal Society.

She was more receptive on some things than on others. The genesis of the 1988 speech to the Royal Society on climate change arose from a meeting when I went to see her when I was on holiday. I always tried to make a point of going into No.10 when I was on holiday. I then suggested three ideas to her which she might try. I didn’t know which, if any, of them she was going to follow. Then I heard about three weeks later that she was interested in the one about climate change, and we started toing and froing about what she might say and when she might say it. She’s always been very interested in science and felt that she had that particular contribution to make.

The speech (transcript can be found here) was ground-breaking in that is was the first in which a world leader had called attention to the threat posed by greenhouse gas emissions:

For generations, we have assumed that the efforts of mankind would leave the fundamental equilibrium of the world’s systems and atmosphere stable. But it is possible that with all these enormous changes (population, agricultural, use of fossil fuels) concentrated into such a short period of time, we have unwittingly begun a massive experiment with the system of this planet itself.

Recently three changes in atmospheric chemistry have become familiar subjects of concern. The first is the increase in the greenhouse gases—carbon dioxide, methane, and chlorofluorocarbons—which has led some[fo 4] to fear that we are creating a global heat trap which could lead to climatic instability. We are told that a warming effect of 1°C per decade would greatly exceed the capacity of our natural habitat to cope. Such warming could cause accelerated melting of glacial ice and a consequent increase in the sea level of several feet over the next century.

Spencer Weart, a leading scholar on the history of climate change and author of the modern classic “The Discovery of Global Warming” credits Thatcher as being the first world leader to call for the mitigation of green house gas emissions (here). Her unequivocal position can be seen in this address she gave to the United Nations General Assembly in November 1989 (here).

But the problem of global climate change is one that affects us all and action will only be effective if it is taken at the international level.

It is no good squabbling over who is responsible or who should pay. Whole areas of our planet could be subject to drought and starvation if the pattern of rains and monsoons were to change as a result of the destruction of forests and the accumulation of greenhouse gases.

We have to look forward not backward and we shall only succeed in dealing with the problems through a vast international, co-operative effort.

A second key shaper of Thatcher’s view on climate change was John Houghton. Houghton had been Chief Executive of the United Kingdom Meteorological Office from 1983 and also a senior figure on the World Meteorological Office (WMO). The Intergovernmental Panel on Climate Change (IPCC) was, in fact, born out of the WMO. Houghton worked well with Thatcher as can be seen in this interview Houghton gave for the WMO here.

However, back in 1990 I had one very good ally and that was Margaret Thatcher. She gave a talk to the Royal Society in 1988 and – remember she was a scientist by background – she talked about global warming and the newspapers carried this as their headline the following day. That was the first time, in the UK at least, that global warming started to appear on the ‘map’.

Earlier in 1988, the Canadians put on their own global warming conference which raised political awareness in a very important way. 1988 was also the time when the Intergovernmental Panel on Climate Change had its first meeting and I was asked to be the chairman of its Science Assessment Panel. We had long debates, with hundreds of scientists worldwide, and we had a very interesting time determining what was happening on a global scale and what we could predict for the future.

In 1990 we had our final meeting in Windsor of this scientific group, agreeing the conclusions that would be put forward by the IPCC. Because the IPCC is an Intergovernmental Body, governments now started to take ownership of the assessments and many were accepting the findings. I subsequently presented the findings to the Thatcher Cabinet at Downing Street. It was the first time they’d ever used a projector in the Cabinet Room and famously Margaret Thatcher listened for twenty minutes without interrupting – an unusual occurrence apparently!

The scientific and political concensus that resulted meant that the 1992 Earth Summit in Rio de Janeiro saw all the nations of the world sign the framework convention on climate change. This included the USA and President Bush I.

Houghton’s good relationship with Thatcher paid dividends in the establishment of the Hadley Centre for Climate Prediction and Research in 1990, an organisation which was supported jointly by both the Met. Offfice and the Department of the Environment and kept the U.K at the forefront of climate research. But on 22 November 1990 Thatcher quit the premiership after losing the support of her colleagues, and from that time on she contributed little to the climate change debate until the publication of her book Statecraft in 2002.

The book contained a chapter called “Hot Air and Global Warming” that could have been written by any true-believing climate skeptic. Moreover, as a result of this book, such high profile skeptics as Anthony Watts and Christopher Booker came to laud Thatcher as one of their own (for example here). Given that most of her information sources for the chapter came from libertarian think tanks such as the Heritage Foundation, the Cato Institute and the Reason Foundation  (all of which she references), this is not really surprising.

Further, in the process of becoming a skeptic, Thatcher now viewed the IPCC as ‘alarmist’ and climate change science as a stalking horse for international socialism. From the book:

The new dogma about climate change has swept through the left-of-centre governing classes

And

provides a marvellous excuse for worldwide, supra-national socialism.

The switch was a triumph for the right-wing think tanks and other assorted merchants of doubt. Yet this outcome is certainly not a triumph for humanity, and nor, in reality, for the political right. Climate change will grind forward regardless of the pronouncements of the left and right. To pretend it doesn’t exist as part of a policy platform is stupid in the extreme. Many political pronouncements can never be refuted as they are normative statements—a question of personal ethics or beliefs. Climate change is not one of them: it will get hotter or it won’t. Someone has to be wrong.

Delusional Investing in a Post-Growth World (And a Possible Alternative)

The internet certainly has its faults, but one can’t but admire how it has democratised information. It is now possible to get access to a multitude of private-sector reports that would only have been available to investment professionals a mere 10 years ago.

One example, with a high degree of quality, is the Credit Suisse Global Investment Returns Yearbook. You can get a pdf of the 2013 report here. Within its pages is a wealth of information on cash, bond and equity returns. Critically, the report chronicles a recent revolution in the prospects for investments. Moreover, the ‘new normal’ savers face gives off some telling signals with respect to future economic growth and, unexpectedly, provides some good news for the economics of sustainability projects.

The three authors behind the report—all from London Business School—provide a short introduction that doesn’t pull any punches in its message to the investment community:

To assume that savers can expect that the investment conditions of the 1990s will return is delusional. Many investors seem to be in denial, hoping markets will soon revert to “normal”.

The report covers cash, bonds and stocks, and all three have seen a collapse in expected returns. Let’s take a closer look at bonds, since they dominate pension-related savings in most countries. You can plainly to see that nominal yields have slumped (click for larger image):

Average Yields on Long Bond jpeg

But once we take inflation into account, things are far worse. In the chart below (taken from the full report), the authors have used inflation-protected bonds starting from the year 2000 (or equivalent where such bonds are not issued by a particular country) to see what kind of real returns investors are prepared to accept (click for larger image).

Real Yields jpeg

This kind of chart always shocks me. Continue reading

Flood Risk in the U.K.: What Does Mr. Market Think? (Part 2 An Actuary’s Nightmare)

In my previous post, I noted that strange things were happening in the flood insurance market. In short, the insurance industry no longer wants to extend the status quo (here):

The current agreement under which insurers continue to offer flood insurance to their existing customers will expire on 30 June 2013. The insurance industry has proposed a new a scheme to ensure customers can still buy affordable flood insurance, after this date. We are currently in talks with the Government about taking this forward.

In truth, they want to move some flood risk from one actor in the market to another. But before I look at that issue, I want to ask the question “why do they want to change the status quo?”

To do this, we need to take a quick detour through the theory of insurance. There is a nice little eight-minute youtube video that explains the theory of insurance here:

The core message in the video is the same as the core message of this blog: risk is the probability of an event times the cost of the event. Continue reading