Climate Change Is Uninsurable, So, What Should We Do?

I have had a career that has spanned investment banking, public policy, and academia, in the early phase of my working life. As you can imagine, academia was the least, and investment banking the most, posh. I can recall a time when the Prague Symphony Orche­stra put on a private concert in Prague Castle for some clients, my investment banking colleagues and me. And, I can remember frantically trying to find alter­native accommodation when the taxi dri­ver could not drop me off at the front door of the “hotel” a university had put me up in a poor part of Marseille because the riot police would not let him thr­ough. Yet, I have experienced more ruthless competition in academia than anywhere else. It seems business people and policymakers generally understand that collaboration is the route to us all being better off. There is excessive individualism in the same ivory towers that teach the adverse social and economic consequences of it.

There are, of course, famous collaborations like that of Nobel Laureates in Economics, Abhijit Banerjee and Esther Duflo. My modest academic contributions were only possible, and had benefited hugely, from the generosity of a handful of people like John Eatwell, Charles Goodhart, Stephany Griffith-Jones, Richard Portes and Charles Wyplosz. Before I knew him, the idea I associated with Eatwell, President of Queen’s College, Cambridge, was the idea of a global financial regulator. I thought it was pretty far-fetched at best, and not even desirable in parts. It was only when I got to know him and read his prescient 2001 book, Global Finance at Risk: The Case for International Regulation, did I understand that he was using it as a thought experiment, the purpose of which was to help us understand the role of international financial regulation. Imagine a glo­bal financial regulator. How would the problem of regulation be changed, or not? It turns out, quite a lot, and we need international financial regulation, especi­ally with regard to the conduct of financial firms as well as domestic regulation with regard to solvency and liquidity.