How Neuroscience Explains the Climate Risk Divide

Broadly speaking, climate scientists are in a state of panic while financial markets are not. This is exemplified by Peter Kalmus (climate scientist) and Stuart Kirk (former Global Head of Responsible Investments at HSBC Asset Management). Peter Kalmus said "Everything we love is at risk. I feel terrified for my kids, and terrified for humanity. If everyone could see what I see coming, we would end fossil fuels in just a few years." On the other hand, Stuart Kirk stated "There’s only three options possible to purists like me. Either the risk is negligible - and in that case, there's nothing to worry about. Or maybe it's already in the price. There's millions of us, we all went to school and learnt pricing theory." 

Our brains are 'expectation machines'. The human brain is an engine for jumping to conclusions - based on expectations it builds up about the world. These expectations are shaped by prior experience and repeated exposure to certain kinds of perceptual inputs, events, information and ways of thinking. This means that if you spend a lot of time working in a particular job, you will end up building up a lot of expertise that manifests itself as expectations inside your brain. Different professional expertise means different expectations, and that can then lead to wildly different interpretations of the same events, facts and evidence. This becomes a problem when our 'expectation machine' misfires by misinterpreting new information through pre-existing expectations that aren’t appropriate to the situation.