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John Cochrane: “Climate change poses no measurable risk to the financial system”
- poormystic 6y ago... only when the last tree is chopped down, will they understand that you cannot eat money.
- quantified 6y agoAlthough I’ve been concerned about climate change for a long time now (remember watching Soylent Green?) I would tend to agree with the remarks in the piece. Not just with the degree of risks to the “system”, but also with the idea that policy is being misapplied here. The probability of “black swan” events is always difficult to assess. “The world is a few years from catastophic collapse” in the 1980’s was not borne out- catastrophe can be in slow motion. If it’s slow enough, the financial system will adapt, more quickly than many of its participants. If the gulf stream collapses, the depth and speed of the impact could maybe be swift and dangerous, but probably will take months to play out. However, one thing left out of the discussion of “losing money happens in a functioning financial system” is that choices will get made over who loses the money. 2007 was a great example of choosing large, even demonstrably criminal businesses over voters. I would expect the financial system to figure out how to robustly protect its home team. And, some things such as the quality of our environment, seem beyond putting a monetary value on.