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Abstract
One approach to rationalising policies for addressing potentially catastrophic climate
change when such policies may prove unnecessary is to suppose the policies provide a
form of social insurance even in the presence of pure uncertainty. Then, provided the
policies are effective, such insurance can be justified as a precautionary or minimax
response. Even if the policies are potentially ineffective however, intervention can be
justified as an attempt to minimise the regret experienced by future generations. This
reasoning extends to justify ‘all weather’ policies provided such policies always reduce
policy costs. If, however, policy decisions provide ‘all weather’ benefits in only certain
states of the world, this rationale breaks down. Minimising regret can establish a case
for ‘mixed’ policy responses provided adopting a policy mix precludes the chance that
intervention will fail altogether. Precautionary policies and policies which minimise
regret are computed for a simple, dynamic, adaptive climate change planning problem
and sufficient conditions for policy maker pessimism provided.