PG&E bankruptcy result of being unprepared for catastrophic and overwhelming effects of climate change, UR professor says.


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  • newswise-fullscreen PG&E bankruptcy result of being unprepared for catastrophic and overwhelming effects of climate change, UR professor says.

    Credit: Nicholas Reksten

 

Environmental Economist Dr. Nicholas Reksten can speak with authority on the catastrophic environmental and economic consequences of PG&E's actions and the resulting liability claims and bankruptcy. 

"PG&E is an interesting and unfortunate case, as it demonstrates that some combination of being unprepared for climate change in a way that it inadequately informs the company’s planning process and being overwhelmed by climate change can have catastrophic effects on businesses.  This is certainly not the last case of such bankruptcy that we will see.  In this case, PG&E was overwhelmed by liability claims due to the fires its equipment seems to have started.  In other cases, we may see climate change directly affecting a company’s assets.  Most companies that I know of have some understanding of these impacts and have processes for understanding what, exactly, their vulnerabilities are with respect to climate change.  However, PG&E seems to have been overwhelmed by events.  Even if their planning process used best practices, the climate system is chaotic by nature, and climate change makes it even more chaotic.  Proper forecasting and planning can help reduce asset destruction, liability, and bankruptcy, but it will almost certainly not eliminate them as climate change worsens.  Expect more of this sort of thing in the coming decades, even with more aggressive action to mitigate climate change," Reksten says.

Biography :
Dr. Reksten joined the economics department at the University of Redlands in 2016 after teaching at Sarah Lawrence College and American University. His expertise ranges from basic economics to the economic impact of environmental issues, such as disasters. He is an award-winning educator and researcher with a unique focus on economics and the environment.

 

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