Managing climate risk

We live in an era of human-induced climate change. Though not all of the future consequences are known, the range of realistic outcomes is serious — and a scenario in which there is no impact from climate change is so unlikely that it can safely be ignored. The risks — to commerce, societies, and the environment — are pervasive.

Investments in managing those risks can be effective and affordable. Indeed, some of the most appealing responses are relatively inexpensive. Others, which require more resources, can be developed as investments that not only provide protection from climate change, but also advance competitiveness, development, and security.

The latest report from the Intergovernmental Panel on Climate Change explicitly frames the issue as a risk-management challenge. This approach facilitates a balanced consideration of likely outcomes as well as those that are less likely but imply much graver consequences. It also capitalises on sophisticated tools and approaches already widely used for managing risks in endeavours as diverse as national security, financial planning, and infrastructure design.

So, what do we know about the risks of climate change?

The world is warming, and overwhelming scientific evidence confirms that humans caused most of that change over the last few decades. It is also clear that climate change will continue, at a pace determined by past, present, and future emissions of heat-trapping gases. Scientific understanding of climate change continues to advance, but there are still areas of uncertainty, including the risks of major surprises, complications, or unexpected interactions.

The effects of climate changes that have already occurred are widespread and significant, affecting agriculture, human health, terrestrial and marine ecosystems, water resources, and some industries. The effects can be seen from the tropics to the poles, from small islands to large continents, and from the wealthiest countries to the poorest.

But future climate change will affect people, economies, and the environment differently in different places. Some will confront risks from extreme weather, including stifling heat, intense rains, and powerful storm surges. Others will face risks of more challenging conditions for agriculture, fisheries, transportation, and other livelihoods. Risks for human health and security will rise with shortages of food and water.

Along with these risks, a few may benefit, especially from a little warming. But climate change often will act as a threat multiplier, tipping difficult situations over the edge or narrowing options for solving problems.

While some of the future effects of climate change are nearly certain, others will be surprises. The level of risk is controlled by three factors. The first is the climate event or trend — for example, heatwaves, heavy rain, or gradual drying. The second is exposure: how many people and assets are in the wrong place at the wrong time? The third is vulnerability, or lack of preparedness. Together, these three factors determine risk, which rises with more frequent or ferocious triggering events, more people or assets exposed, or lower preparedness.

Continued high emissions of heat-trapping gases will lead to large amounts of future warming. This would increase the frequency and intensity of climate triggers. Ambitious efforts to control emissions can decrease future warming and its risks.

Progress in reducing emissions is an important part of responding to climate change, but it is not the whole solution. It is also essential to make the investments needed to deal effectively with climate change that can no longer be avoided. These investments are especially important over the next few decades, a period when much of the climate change that we will experience is already baked into the climate system, owing to past emissions and existing infrastructure. 

With smart choices, investments over the next few decades to reduce risk can contribute to vibrant societies, robust economies, and healthy environments. For example, improved emergency services and better transport and communication infrastructure can make streets safer and simultaneously encourage commerce. Depending on the location, improved flood protection, irrigation technology, or city planning can reduce both current and future risks for people and businesses. Almost everywhere, better education, preparation, and infrastructure can be parts of approaches that boost economies and strengthen the fabric of society while reducing risk from climate change.

Climate change creates real and pervasive risks. If we are smart and ambitious, addressing those risks can also create real opportunities.

Chris Field is the founding director of the Carnegie Institution’s Department of Global Ecology, Professor for Interdisciplinary Environmental Studies at Stanford University, and Faculty Director of Stanford’s Jasper Ridge Biological Preserve. He is Co-Chair of IPCC Working Group II. Vicente Barros is Emeritus Professor of Climatology, University of Buenos Aires, and Co-Chair of IPCC Working Group II. ©Project Syndicate, 2014. www.project-syndicate.org