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Faculty Research Working Paper Series
Richard Zeckhauser
Frank Plumpton Ramsey Professor of Political Economy
phone: (617)495-1174
fax: (617)384-9340
Better Predictions, Better Allocations: Scientific Advances and Adaptation to Climate Change
Freeman, Mark C., Ben Groom, and Richard Zeckhauser. "Better Predictions, Better Allocations: Scientific Advances and Adaptation to Climate Change." HKS Faculty Research Working Paper Series RWP15-051, August 2015.
Abstract
The initial hope for climate science was that an improved understanding of what the future might bring would lead to appropriate public policies and effective international climate agreements. Even if that hope is not realized, as now seems likely, scientific advances leading to a more refined assessment of the uncertainties surrounding the future impacts of climate change would facilitate more appropriate adaptation measures. Such measures might involve shifting modes or locales of production, for example. This article focuses on two broader tools: consumption smoothing in anticipation of future losses, and physical adaptation measures to reduce damages. It shows that informative signals on climate-change effects lead to better decisions in the use of each tool.
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