This week, host Daniel Raimi talks with Robert Litterman, a founding partner at Kepos Capital and a board member at Resources for the Future (RFF). Litterman recently was named the chair of a new committee that will be advising US financial regulators on the economic risks of climate change, a new position that leverages Litterman's extensive experience working on risk management in the financial sector and his deep interest in climate change. Raimi and Litterman talk about the scale of the risks to the US financial system from climate change; whether and how markets are currently pricing the risks of climate change for assets like coastal property or energy companies; and the recent paper Litterman coauthored, which takes an unconventional and novel approach to carbon pricing.

References and recommendations:

"Global Warming of 1.5 degrees," an IPCC special report; https://www.ipcc.ch/sr15/

"Declining CO2 price paths" by Kent D. Daniel, Robert B. Litterman, and Gernot Wagner; https://www.pnas.org/content/116/42/20886