26 April 2017

Pia-Johanna Schweizer visited IIASA

Pia-Johanna Schweizer from the Institute for Advanced Sustainability Studies (IASS), Potsdam, Germany visited IIASA in the framework of the Systemic Risk and Network Dynamics project and gave a talk on "Governance of systemic risks: Challenges for decision and policy making" on 25 April, 2017.

In her talk, Pia-Johanna Schweizer gave an overview of the interdisciplinary research conducted at the Institute for Advanced Sustainability Studies (IASS) with regard to systemic risks. Special attention was paid to the ways in which complexity, uncertainty and ambiguity pose challenges to governance of systemic risks.

Abstract

Modern pluralistic societies face many challenges. Human life and the environment are especially challenged by large, systemic risks such as climate change, epidemics, financial breakdown and social inequality. Systemic risks can be characterized by four major properties. First, systemic risks are characterized by scientific complexity and epistemological uncertainty. Science cannot identify exact hazard probabilities. Instead, science utilizes models of scenario building to sketch out the stochastic nature of systemic risks. Second, systemic risks are transboundary and global in nature. They transgress nation states and call for international cooperation. Third, although systemic risks originate in one subsystem of society or the environment, the ripple effects of these risks affect all social subsystems, such as the economy, politics, and civil society.  Fourth, future technological and societal developments are non-linear. Science struggles to identify tipping points of technological and social trends. Nevertheless, political decision makers call for scientific advice to govern our emergent future. Systemic risks pose great challenges to governance because they are highly interconnected and complex, stochastic and non-linear in their cause-effect relationships. Furthermore, they are often underestimated in public policy arenas and public perception. Consequentially, systemic risks demand cooperative management efforts of experts, corporate sector, civil society and regulators. Effective risk management must strike a balance between efficiency and resilience, and the solutions devised must be fair to all people affected. Effective, inclusive governance strategies are necessary to pursue the goals of resilience and sustainable development.

 

Another complicating factor is the fact that we have to deal with the challenges of complexity, uncertainty and ambiguity when governing systemic risks. These challenges are inherent to the risk itself and limit our understanding - analysis and assessment - of risk. Furthermore, complexity, uncertainty and ambiguity influence approaches towards risk management and consequentially risk management options.


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Last edited: 05 May 2017

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