Adapting to Climate Change: Markets and the Management of an Uncertain Future

Kahn reviews findings on how climate change and extreme weather events affect key sectors of the economy. Although he does not dismiss the need to curb rising temperatures, he suggests that American society is getting better at adapting to climate change. Weather shocks provide incentives for businesses to develop new products, such as resilient building materials and in-home battery backup systems. Big data allows utility providers to adjust electricity and water prices in response to weather events, encouraging consumers to modify their usage in environmentally friendly ways. To be sure, it’s not just up to markets to respond to climate change. Kahn highlights the need for investments in public infrastructure to help with climate change adaptation and for reforms of urban planning rules and flood insurance laws. Still, his book shows that one need not be a climate change skeptic to be a climate change optimist.