The Intergovernmental Panel on Climate Change (IPCC) AR6 Report published on Aug. 9 provides the most comprehensive, conclusive, and up-to-date scientific information on the physical basis of climate change.
The report adds depth and clarity to our understanding of climate risks in advance of COP26 to be held in Glasgow in November. It follows the 2014 AR5, the Synthesis Report, and the 2018 Special Report on 1.5 degrees Celsius.
Key findings on climate risk in the AR6 report include:
- Climate change and its physical impacts are unquestionably human-caused.
- No area (or business asset) is unaffected by climate change.
- Weather extremes and acute physical hazards will increase in intensity and frequency. Climate change will also cause continued reductions in Arctic sea ice, snow cover, and permafrost.
- Some of the impacts are “irreversible for centuries to millennia, especially changes in the ocean, ice sheets and global sea level.”
- The intensification of some climate-related risk is locked in to 2050, even in the best-case scenario for climate change mitigation, and meeting the 1.5 degree Celsius goal would require “deep reductions in greenhouse gas emissions.”
As a result of these insights, the IPCC Report marks a shift in how we think about climate change. The report presents some of the most advanced approaches to forward-looking climate analyses.
Here are three ways we can reframe our understanding of climate science in light of the report:
- Rethinking prediction: Due to the unprecedented nature of climate change, scientists cannot solely rely on historical statistical models to inform their models for change. Advanced climate models combine historical and physical approaches to analysis of extreme weather events.
- Exploring scenarios: With its reference to five different Shared Socioeconomic Pathways, the report adopts scenario analysis as a core methodology. This exploratory approach, which is also recommended by the Task Force on Climate-related Financial Disclosures (TCFD) examines five different socioeconomic narratives for strategizing climate mitigation and adaptation efforts.
- Going beyond doubt: Climate scientists have resolved various uncertainties since AR5, so we can apply this knowledge and strategically plan for acute hazards such as hurricanes and tropical cyclones.
Historical Statistical Analysis Alone Won’t Cut it
The IPCC report affirms that extreme weather events are increasing in frequency and intensity. Relying on the historical record alone could cause scientists to underestimate climate impacts in their predictions.
Dr. Timothy Hall, Senior Scientist at TCS and Senior Research Scientist at NASA GISS, points out that, “most companies using commercial catastrophe models primarily base their assessments on historical data. … but projections from physically-based climate models on shifting climate haven’t yet been widely incorporated into cat models. ... It seems likely that the situation will change quickly.”
Dr. Hall explains some of the similarities and differences to the two types of risk modeling. For the similarities, both tools can be used for predictive analysis for climate risk. They both predict probabilities of extreme events and changes to those probabilities.
For the differences, statistical models use historical data in either stationary analyses or to infer future trends regarding the frequency and intensity of extreme weather events. In contrast, physical models extrapolate insights from the physical laws for a given climate scenario. They simulate future impacts based on our knowledge of the Earth’s physics.
“Both approaches have strengths and weaknesses,” Dr. Hall says. “Physical models are not limited by the assumption that the past is a guide to the future. … However, the current ‘state-of-the-science’ global physical models (general circulation models, or GCMs) have biases in representing extreme events, particularly on small scales. In contrast, statistical models, by design, do a good job at replicating event frequencies in the past and present, but their extrapolations to future climate states are more uncertain.”
Rather than rely solely on one or the other, Dr. Hall suggests combining these approaches in analysis of catastrophic events.
How Shared Socioeconomic Pathways Relate to Scenario Analysis
The IPCC AR6 report uses Shared Socioeconomic Pathways (SSPs) to frame its climate change findings, whereas the AR5 report used Representative Concentration Pathways (RCPs).
The key difference between the two forms of measurement is that SSPs outline narratives related to the socioeconomic conditions that could lead to the different warming outcomes. RCPs strictly look at a physical measurement without social context. RCPs describe a projected temperature change based on the rise in greenhouse gas emissions (GHGs) in the atmosphere by the year 2100.
This article in Carbon Brief summarizes the five scenarios referenced within the IPCC report nicely. The National Geographic characterized these climate narratives as a “Choose Your Own Adventure-style series of endings to the story of 21st-century climate change.” Indeed, that’s the mindset needed to conduct scenario analysis.
Dr. Hall clarifies that “a single RCP could be caused by different SSPs.” One of the ways climate scientists use SSPs is to run experiments on different transitional frameworks to establish how each SSP could reach different levels of atmospheric warming.
Another point to consider in risk analysis is that physical risks don’t depend on SSPs. “Physical hazard modeling (for example, changes in intense precipitation) generally only depend on the RCP. Economic factors, however, such as transition risk, vary with SSP,” says Dr. Hall. Analyzing transition risks entails assessing the technology, policy, and socioeconomic conditions for different emissions scenarios. Ultimately, he points out, these ways of measuring pathways are complementary.
Uncertainty Aside, We Need to Understand Acute Risks Better
Strong hurricanes present some of the greatest risks to communities and businesses. According to Dr. James Kossin, senior scientist for TCS, and a climate scientist in NOAA's Center for Weather and Climate, our understanding of these extreme weather events has changed since the IPCC’s AR5 in the following ways:
- “Our confidence has increased that greenhouse warming increases the maximum wind-intensity that tropical cyclones can achieve.
- This in turn allows for the strongest hurricanes, which are the ones that create the most risk by far, to become even stronger.
- We also have good and better confidence that the rainfall rate of tropical cyclones increases with warming.
- We have good and better confidence that the combination of increasing greenhouse gases and the reduction of anthropogenic aerosol pollution since the 1970s has contributed substantially to the high hurricane activity that we've been witnessing in the Atlantic since about the mid-1990s.
- We have good and better confidence that tropical cyclones are more likely to rapidly intensify now than 40 years ago.”
Given that we have a clear link between human-caused climate change and intense storms, we can now drill into the details of how and when devastation from these storms can occur.
“There is also increasing evidence that tropical cyclones are systematically moving more slowly across land and are more likely to ‘stall,’” says Dr. Kossin. “We've seen quite a few examples of stalled hurricanes in the past few years; Harvey, Dorian, Sally, Florence, Eta, Iota, just to name a few.
“All of these were devastating to the places where they stalled. The combination of slower movement and more rain falling out of them increases coastal and inland flooding risk tremendously,” Dr. Kossin explains.
In spite of these advances in the confidence interval, some areas remain challenging to scientifically confirm.
“We still have somewhat less confidence regarding how climate change affects hurricane tracks, but there is good and increasing evidence that warming contributes to a slow poleward migration of the locations where tropical cyclones reach their peak wind-intensity,” Dr. Kossin says.
“This is particularly pronounced in the western North Pacific Ocean, which increases the risk for places like northeastern China, Korea, and Japan.”
Knowing when, where, and how devastation from hurricanes can occur will help businesses and communities adapt better to these risks.
Futureproof Your Own Climate Risk Strategy
The IPCC report helps us embrace the reality of climate change, not only in terms of expanded analysis, but also by demonstrating approaches available to assess climate risks.
To streamline TCFD reporting, TCS applies these approaches to help our clients assess financial risk for different climate scenarios.
Learn about how our Climanomics® Platform can improve your climate-related financial risk assessments.