Selling Insurance to a Mayan Part II: Adaptive Measures

Mar 14, 2012 by     1 Comment     Posted under: Uncategorized

Cigarette smoking probably won’t kill you.  I mean, cigarettes are bad for you, no question, but the truth is, they may not be quite as dangerous as you think: according to an article in the American Journal of Medical Health (admittedly, a rather dated article), 30% of heavy smokers at the age of 35 will die before the age of 85 from smoking related disease, a far stretch from the nearly 75% mortality rate that most Americans would expect. The message here isn’t to advocate sparkin up, but to point out a fundamental function of our species:

We miscalculate risk.

The Mayans had the same issue (read Part I): they just didn’t know how much their current resource use was exposing them to future problems.

This is how insurance companies make millions: they realize that we are poor predictors of our own risk, and that we will over-invest against the risk of disease or accident.  Blue-Cross-Blue-Shield is one of the nation’s largest casinos, making major profit off of our bad bets.

With climate change, we seem to be grossly underestimating our risk (but don’t think insurance companies aren’t noticing this).   Additionally, the effects of climate change are still too far removed and unpredictable for corporations to begin seriously incorporating them into their business plans, but there is a day coming…

Until then, it is important for municipalities and regional governments to begin considering adaptive technologies and scenarios.  Most climate action plans are focused on mitigation. Mitigation of greenhouse gas emissions is important, but it is not enough on its own.  We need a serious conversation about the risks posed under various climate shifts because we have decided to sacrifice future stability for current economic gains. (If you have time, the DICE model by Nordhaus provides a great tool to explore this thought experiment: how much is future climate change worth to our current economy?)

I don’t think that we will be able to buy our way out of trouble with adaptation, but I also don’t think that enough credit is sometimes given to our ingenuity and adaptability.  Adaptation will have to be part of our response to climate change, because mitigation hasn’t been enough of it.

So, smoke ‘em if you gottem, but bring an umbrella, just in case.

 

1 Comment + Add Comment

  • Great points. I love the first piece as well! A creative application of ancient history!

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