Watson Institute for International and Public Affairs

The Market is Valuing Climate Risk all Wrong

August 22, 2018

Jeff Colgan’s article, “The Market is Valuing Climate Risk All Wrong,” was published in the Global Policy Journal on July 6, 2018.

Economists and policymakers tend to believe that markets are fairly rational in how they evaluate assets and risks. In the case of climate change, that just isn’t so. Climate change creates risks for three distinct asset classes: fossil fuels, insurance, and property values. The market might be correctly valuing any two of the three asset classes, but not all three, creating what we might call the “climate-value paradox.”

To read more, click here. Hear Colgan discuss the "climate-value paradox" on Watson's Trending Globally podcast: