Risk Management Solutions for Climate Change–Induced Disasters

In honor of the 40th anniversary of Risk Analysis, this article suggests ways of linking risk assessment and risk perception in developing risk management strategies that have a good chance of being implemented, focusing on the problem of reducing losses from natural hazards in the face of climate change. Following a checklist for developing an implementable risk management strategy, Section 2 highlights the impact that exponential growth of CO2 emissions is likely to have on future disaster losses as assessed by climate and social scientists. Section 3 then discusses how people perceive the risks of low‐probability adverse events and the cognitive biases that lead them to underprepare for future losses. Based on this empirical evidence, Section 4 proposes a risk management strategy for reducing future losses using the principles of choice architecture to communicate the likelihood and consequences of disasters, coupled with economic incentives and well‐enforced regulations.