ABSTRACT
Many economists argue that focusing on total discounted dollars is the wrong way to think about climate risk. Economic analysis of climate change risk at the local and project-based level is still relatively rare, primarily because the ability to forecast the localized impacts of climate change is evolving. Moreover, adaptation does not address many secondary risks of climate change to food supplies and ecological systems. Climate risk has been a source of active discussion for 25 years; yet clear policy to address the climate change problem has yet to appear. WYSIATI theory suggests that human decision-making is based primarily on Known Knowns, and rarely considers Known Unknowns. The chapter provides a short review that scratches the surface of the risk perception and risk management implications of cognitive biases as suggested in recent research, but proposes that much more policy and communications attention will be needed if these barriers are to be overcome when addressing climate risk perception and management.
