This session, as part of Mozilla Festival, explores climate risk, and the fact that “risk” is not a universal measure, concept, or value- even in economics where the difference between “uncertainty” and “risk” is an unresolved debate in economic thought, and financial and economic crises cannot be predicted by using sophisticated computer technology and risk modelling.
In fact, we cannot talk about some “objective” measure or meaning of “risk” as “risk” is a value-ridden notion that varies by cultures, societies, disciplines. So, when the financial sector and financial regulators announce commitments to fight climate risk, as seen at the last COP26 pronouncing a seemingly gigantic USD 130 trillion for this purpose, we should realise that finance and money have a very narrow financial understanding of climate risk.
Central bankers are concerned about financial instability risk if investors and bankers go bankrupt after a sudden collapse of valuations of carbon-related businesses in financial markets. Financial institutions develop new investment strategies using sophisticated computer modelling of risk to generate high financial returns as the economy transitions to a carbon-neutral one. Climate scientists, on the other hand, use different conceptualisations and measurements of risk in assessing the impact of global warming on earth’s materiality.
Risks to society from global warming and transitioning to a net-zero economy are altogether different and complex. Geographically, intergenerationally, ethnically, gender-wise, income-wise, etc. we face risks and uncertainties that are not homogeneous. Societal risks are not quantified and computer-modelled like they are in the finance sector but politically mobilised through various discourses and actions.
Art and artists have a long tradition of approaching and dealing with risk and uncertainty in aesthetic and conceptual forms that question universality. Financial institutions and money managers can enter into a fruitful dialogue with the art world to re-think risk and uncertainty for climate risk and environmental risk purposes.
At this session we bring together a multi-disciplinary group of people, Pierre Guillet de Monthoux (Stockholm School of Economics), Shân M. Millie (Digital Finance expert), William Drew, artist, and Chiara Badiali (Julie’s Bicycle). to explore the concept of climate risk and how risk discourses in finance and society need to talk to each other for common good.
This session co-curated and facilitated by Ismail Ertürk and Irini Papadimitriou, is now available online via the Mozilla Festival website. Follow this link to access the discussion in full.