Decision criteria, scientific uncertainty, and the global warming controversy

This paper applies several well-known decision criteria to the climate change problem. The policy process is represented by a simple game against nature with two possible choices: abate or no action. The outcome is considered a compound lottery, with one representing emissions and another representing damages. Assuming that costs exceed benefits of abatement for the participant, the paper analyzes how different decision criteria affect the decision to abate. The role of expert opinion and quality of information in climate change decisions are also considered. The complexity of global warming makes it impossible to completely overlook the consequences of alternative choices. The paper discusses the question of whether the use of less information demanding alternatives to expected utility theory is indicated. It concludes that the choice of criterion is a political question, and that those in favor of abatement policies might be using one of the alternatives as basis for their advice, and suggests that if the possibility of making irreversible mistakes is of great concern, then the minimax regret criterion might have increased relevance. © Springer 2005.