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Things are different today: the challenge of global systemic risks

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  • Ortwin Renn
  • Klaus Lucas
  • Armin Haas
  • Carlo Jaeger

Abstract

While most OECD countries have been rather successful in reducing risks to human lives, health, and the quality of the environment, the record for new global risks such as climate change, pandemics, financial breakdowns, and social inequality is much less convincing. This is the challenge of systemic risks. Since the global financial crisis, it has received rapidly growing attention. However, considerable conceptual confusion mars research on and practical responses to this challenge. We undertake an effort of conceptual clarification, starting with the paradigmatic example of the financial crisis. This leads to a view of global systems as involving an interplay between micro- and macrodynamics internal to the system, with the system simultaneously interacting with its environment. Such dynamics typically show periods of stability, punctuated by situations opening up several possible futures. Alternative global futures, like other prospects, constitute risks for an agent if she considers some of these futures as less desirable than others. Agents may have lexicographic preferences over futures they would like to avoid, so as to consider some futures as just undesirable, but others as catastrophic. If an agent expects some of the relevant futures at a bifurcation point of a global system to be catastrophic in this sense, they are faced with a systemic risk.

Suggested Citation

  • Ortwin Renn & Klaus Lucas & Armin Haas & Carlo Jaeger, 2019. "Things are different today: the challenge of global systemic risks," Journal of Risk Research, Taylor & Francis Journals, vol. 22(4), pages 401-415, April.
  • Handle: RePEc:taf:jriskr:v:22:y:2019:i:4:p:401-415
    DOI: 10.1080/13669877.2017.1409252
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    Cited by:

    1. Lena I. Fuldauer & Scott Thacker & Robyn A. Haggis & Francesco Fuso-Nerini & Robert J. Nicholls & Jim W. Hall, 2022. "Targeting climate adaptation to safeguard and advance the Sustainable Development Goals," Nature Communications, Nature, vol. 13(1), pages 1-15, December.
    2. Valentina Gallina & Silvia Torresan & Alex Zabeo & Andrea Critto & Thomas Glade & Antonio Marcomini, 2020. "A Multi-Risk Methodology for the Assessment of Climate Change Impacts in Coastal Zones," Sustainability, MDPI, vol. 12(9), pages 1-28, May.
    3. Terje Aven & Roger Flage, 2020. "Foundational Challenges for Advancing the Field and Discipline of Risk Analysis," Risk Analysis, John Wiley & Sons, vol. 40(S1), pages 2128-2136, November.
    4. Feng, Jian Rui & Zhao, Meng-ke & Lu, Shou-xiang, 2024. "Accident spread and risk propagation mechanism in complex industrial system network," Reliability Engineering and System Safety, Elsevier, vol. 244(C).
    5. Christian Huggel & Laurens M. Bouwer & Sirkku Juhola & Reinhard Mechler & Veruska Muccione & Ben Orlove & Ivo Wallimann-Helmer, 2022. "The existential risk space of climate change," Climatic Change, Springer, vol. 174(1), pages 1-20, September.

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