IDEAS home Printed from https://ideas.repec.org/a/inm/ordeca/v14y2017i3p187-203.html
   My bibliography  Save this article

Value of Global Catastrophic Risk (GCR) Information: Cost-Effectiveness-Based Approach for GCR Reduction

Author

Listed:
  • Anthony Michael Barrett

    (Global Catastrophic Risk Institute, Washington, DC 20016)

Abstract

In this paper, we develop and illustrate a framework for determining the potential value of global catastrophic risk (GCR) research in reducing uncertainties in the assessment of GCR levels and the effectiveness of risk-reduction options. The framework uses the decision analysis concept of the expected value of perfect information in terms of the cost-effectiveness of GCR reduction. We illustrate these concepts using available information on impact risks from two types of near-Earth objects (asteroids or extinct comets) as well as nuclear war, and consideration of two risk-reduction measures. We also discuss key challenges in extending the calculations to all GCRs and risk-reduction options, as part of an agenda for comprehensive, integrated GCR research. While real-world research would not result in perfect information, even imperfect information could have significant value in informing GCR-reduction decisions. Unlike most value of information approaches, our equation for calculating value of information is based on risk-reduction cost-effectiveness, to avoid implicitly equating lives and dollars, e.g., using a value of statistical life (VSL), which may be inappropriate given the scale of GCRs. Our equation for value of information may be useful in other domains where VSLs would not be appropriate.

Suggested Citation

  • Anthony Michael Barrett, 2017. "Value of Global Catastrophic Risk (GCR) Information: Cost-Effectiveness-Based Approach for GCR Reduction," Decision Analysis, INFORMS, vol. 14(3), pages 187-203, September.
    • Handle: RePEc:inm:ordeca:v:14:y:2017:i:3:p:187-203
    DOI: 10.1287/deca.2017.0350
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/deca.2017.0350
    Download Restriction: no
    File URL: https://libkey.io/10.1287/deca.2017.0350?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Seth D. Baum & Timothy M. Maher & Jacob Haqq-Misra, 2013. "Double catastrophe: intermittent stratospheric geoengineering induced by societal collapse," Environment Systems and Decisions, Springer, vol. 33(1), pages 168-180, March.
    2. Joseph E. Aldy & Scott Barrett & Robert N. Stavins, 2003. "Thirteen plus one: a comparison of global climate policy architectures," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 373-397, December.
    3. Seth D. Baum, 2010. "Is Humanity Doomed? Insights from Astrobiology," Sustainability, MDPI, vol. 2(2), pages 1-13, February.
    4. Jason G. Matheny, 2007. "Reducing the Risk of Human Extinction," Risk Analysis, John Wiley & Sons, vol. 27(5), pages 1335-1344, October.
    5. Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
    6. Milan M. Ćirković & Anders Sandberg & Nick Bostrom, 2010. "Anthropic Shadow: Observation Selection Effects and Human Extinction Risks," Risk Analysis, John Wiley & Sons, vol. 30(10), pages 1495-1506, October.
    7. Debarun Bhattacharjya & Jo Eidsvik & Tapan Mukerji, 2013. "The Value of Information in Portfolio Problems with Dependent Projects," Decision Analysis, INFORMS, vol. 10(4), pages 341-351, December.
    8. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    9. Jeffrey Keisler, 2004. "Value of Information in Portfolio Decision Analysis," Decision Analysis, INFORMS, vol. 1(3), pages 177-189, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Janzwood, Scott, 2021. "R&D priority-setting for global catastrophic risks: The case of the NASA planetary defense mission," Research Policy, Elsevier, vol. 50(6).
    2. Carlo Drago & Matteo Ruggeri, 2019. "Setting research priorities in the field of emergency management: which piece of information are you willing to pay more?," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 2103-2115, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seth D. Baum & Timothy M. Maher & Jacob Haqq-Misra, 2013. "Double catastrophe: intermittent stratospheric geoengineering induced by societal collapse," Environment Systems and Decisions, Springer, vol. 33(1), pages 168-180, March.
    2. Baum, Seth D. & Handoh, Itsuki C., 2014. "Integrating the planetary boundaries and global catastrophic risk paradigms," Ecological Economics, Elsevier, vol. 107(C), pages 13-21.
    3. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, vol. 102(1), pages 131-166, February.
    4. Robert N. Stavins, 2011. "The Problem of the Commons: Still Unsettled after 100 Years," American Economic Review, American Economic Association, vol. 101(1), pages 81-108, February.
    5. J. Hourcade & B. Perrissin Fabert & J. Rozenberg, 2012. "Venturing into uncharted financial waters: an essay on climate-friendly finance," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 12(2), pages 165-186, May.
    6. Carlo Drago & Matteo Ruggeri, 2019. "Setting research priorities in the field of emergency management: which piece of information are you willing to pay more?," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 2103-2115, July.
    7. Higgins, Paul A.T., 2013. "Frameworks for pricing greenhouse gas emissions and the policy objectives they promote," Energy Policy, Elsevier, vol. 62(C), pages 1301-1308.
    8. S. Niggol Seo, 2015. "Adaptation to Global Warming as an Optimal Transition Process to A Greenhouse World," Economic Affairs, Wiley Blackwell, vol. 35(2), pages 272-284, June.
    9. Sgouris Sgouridis & Abdulla Kaya & Denes Csala, 2016. "Switching Economics for Physics and the Carbon Price Inflation: Problems in Integrated Assessment Models and their Implications," Papers 1603.06196, arXiv.org.
    10. Milan M. Ćirković, 2012. "Small Theories and Large Risks—Is Risk Analysis Relevant for Epistemology?," Risk Analysis, John Wiley & Sons, vol. 32(11), pages 1994-2004, November.
    11. van den Bergh, J.C.J.M. & Botzen, W.J.W., 2015. "Monetary valuation of the social cost of CO2 emissions: A critical survey," Ecological Economics, Elsevier, vol. 114(C), pages 33-46.
    12. Richard S. J. Tol & In Chang Hwang & Frédéric Reynès, 2012. "The Effect of Learning on Climate Policy under Fat-tailed Uncertainty," Working Paper Series 5312, Department of Economics, University of Sussex Business School.
    13. Simon Levin & Anastasios Xepapadeas, 2021. "On the Coevolution of Economic and Ecological Systems," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 355-377, October.
    14. Hahn Robert, 2010. "Designing Smarter Regulation with Improved Benefit-Cost Analysis," Journal of Benefit-Cost Analysis, De Gruyter, vol. 1(1), pages 1-19, July.
    15. Bommier, Antoine & Lanz, Bruno & Zuber, Stéphane, 2015. "Models-as-usual for unusual risks? On the value of catastrophic climate change," Journal of Environmental Economics and Management, Elsevier, vol. 74(C), pages 1-22.
    16. Lamperti, Francesco & Bosetti, Valentina & Roventini, Andrea & Tavoni, Massimo & Treibich, Tania, 2021. "Three green financial policies to address climate risks," Journal of Financial Stability, Elsevier, vol. 54(C).
    17. Matthew J. Holian & Matthew E. Kahn, 2014. "Household Demand for Low Carbon Public Policies: Evidence from California," NBER Working Papers 19965, National Bureau of Economic Research, Inc.
    18. Steve Newbold & Charles Griffiths & Christopher C. Moore & Ann Wolverton & Elizabeth Kopits, 2010. "The "Social Cost of Carbon" Made Simple," NCEE Working Paper Series 201007, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2010.
    19. Kenneth Gillingham & William D. Nordhaus & David Anthoff & Geoffrey Blanford & Valentina Bosetti & Peter Christensen & Haewon McJeon & John Reilly & Paul Sztorc, 2015. "Modeling Uncertainty in Climate Change: A Multi-Model Comparison," NBER Working Papers 21637, National Bureau of Economic Research, Inc.
    20. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ordeca:v:14:y:2017:i:3:p:187-203. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.