Q&A: Robert Litterman on the CFTC climate risk report

Chair of industry sub-committee – and famed quant – says carbon dividend plan essential to create right incentives

Robert Litterman: focused on making sure the Climate Leadership Council carbon dividend plan moves forward

Robert Litterman helped refine economic forecasting at the Minneapolis Federal Reserve in the 1980s, and co-developed the eponymous Black-Litterman global asset allocation model at Goldman Sachs, as part of Wall Street’s first cohort of quants in the 1990s. To this day, investment banks still call on the advanced risk management techniques Litterman pioneered.

And yet, his latest task may be the most consequential. Since 2014, Litterman has sought to price climate change, possibly the most