Finally, and most importantly, expected value is important when assessing just how bad climate change is, and how much of a change we should make. When I first looked into economic assessments of the damages of climate change, I was surprised to find that economists tended to assess climate change as being not all that bad. Most estimate that climate change will cost only around 2% of global GDP. This, of course, is huge when measured in the trillions of dollars lost. But it’s not that large when compared to somewhat typical rates of slow economic growth. Economic growth per person over the
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