Climate change futures: health, ecological and economic dimensions

of carbon-risk hedging products, such as derivatives,
and promote secondary markets in carbon securities.
Carbon trading can potentially become a separate
revenue stream for carbon producers, energy-efficient
companies and poor nations, and open the door to
carbon-offsetting products that may become growth
industries in a carbon-constrained future.
Scientists can model early warning systems to help the
public and industry reduce anticipated damages. With
the proper incentive and reward structure, researchers
can focus their ingenuity on the collaborative development
of climate-friendly technologies. Governments
and international bodies have central roles to play in
stimulating public/private partnerships and in carrying
out an expanded program of basic and applied
research to make alternative and energy-efficient technologies
effective and inexpensive.
PLANNING AHEAD
Climate may change in gradual and manageable
ways. But it may also bring major surprises. The good
news is that unstable systems can be restabilized.
Planning is needed to prepare for future catastrophic
events and the “inevitable surprises” that climate
change will bring (NAS 2002). We must be prepared
to respond rapidly to such events to limit the damages
and minimize the casualties. And we must also prepare
to put in place financial mechanisms to implement
large-scale solutions that can restabilize the climate.
At some points in history, efforts have
been made to deliberately manage the
goals and key drivers of development.
The Berlin Conference of 1884 was
such a moment, but the divisive agreements
set nations apart and seeded subsequent
conflict. Another point came in
1944, when world leaders convened a
conference in Bretton Woods, NH, and
established a world order with much
more positive outcomes (see sidebar on
Page 110).
A properly financed transition out
of the fossil fuel era can have enormous
public health, environmental and
economic benefits, and can lay the
basis for far greater international security
and global stability. The challenge
of climate change presents an opportunity
to build a clean and healthy
engine of growth for the 21st century.
111 | FINANCIAL IMPLICATIONS