The cost of climate change
Is extreme weather an act of God, or is it within our control? Our economic research supports an informed response to climate change.
This time, it's an act of humans
Insurance companies use the term ‘Act of God’ for events that are beyond human control and that cannot be predicted, anticipated, or prevented. Earthquakes, severe weather, and floods are all traditionally thought of as Acts of God—but should the reality of climate change modify what we think about this?
As scientific evidence shows, the extreme weather we’re experiencing is occurring more often, or more intensely, because of the way we live. Does that mean these events are actually within our control? This raises significant questions for each of us, for the companies we buy goods from, for our governments and, obviously, for insurance companies.
Professor Ilan Noy from Victoria University of Wellington’s School of Economics and Finance is Chair in the Economics of Disasters. Professor Noy and his colleagues focus on the research and application of economic insights to the management of disasters and climate change.
Their research could not be more timely. We all need to understand the financial implications of climate change—because when we humans are responsible for causing it, we are also responsible for fixing it.