Impact of Narrow Climate Modeling

Climate models rely on weak data for durable #CarbonRemoval, yet these same models shape today’s climate policy Most climate policy experts tend to focus on the #NDCs as the fundamental tool for creating political buy-in to scale up durable removals. But what informs the NDCs? The #IPCC reports. What informs the IPCC reports? The Integrated Assessment Models (IAMs). The IPCC’s Sixth Assessment Report (AR6) illustrates the problem well. Of the 121 model runs in AR6 scenarios aligned with “well below 2°C” and “above 1.5°C” pathways: 120 deployed BECCS, 28 (!) deployed DACCS None (!) represented biochar or ERW. Carbon Direct has just published an in-depth analysis of the problem and potential solutions. The narrow scope of novel and durable carbon removals in IAMs also shapes many countries' NDCs and long-term strategies. I'd add that there is another important element - the IPCC guidelines for the national greenhouse gas inventories (the GHG accounting rules for the governments), which have also suffered from the same shortcomings. It's great to learn that Carbon Direct is collaborating with three leading research institutions with well-established IAMs: Pacific Northwest National Laboratory, Utrecht University, and the International Institute for Applied Systems Analysis, to close this gap and represent removals more accurately in climate modelling: updating the latest cost assumptions, learning curves, and growth constraints for existing carbon removal technologies, while adding new representations of DACCS, biochar, and ERW. Have a look at their short blog post laying out the key issues: https://lnkd.in/eEczTaW2 There's a link to a longer white paper at the end of the blog. It's well worth the read!

States and financial bodies using modelling that ignores shocks from extreme weather and climate tipping points, writes Damian Carrington. https://lnkd.in/et-3yWge Flawed economic models mean the accelerating impact of the #climatecrisis could lead to a global financial crash, experts warn. Recovery would be far harder than after the 2008 financial crash, they said, as “we can’t bail out the Earth like we did the banks”. As the world speeds towards 2C of global heating, the risks of extreme weather disasters and climate #tippingpoints are increasing fast. But current economic models used by governments and financial institutions entirely miss such shocks, the researchers said, instead forecasting that steady economic growth will be slowed only by gradually rising average temperatures. This is because the models assume the future will behave like the past, despite the burning of #fossilfuels pushing the climate system into uncharted territory. Tipping points, such as the collapse of critical Atlantic currents or the Greenland ice sheet, would have global consequences for society. Some are thought to be at, or very close to, their tipping points but the timing is difficult to predict. Combined #extremeweather disasters could wipe out national economies, the researchers, from the University of Exeter and financial thinktank Carbon Tracker, said. Their report concludes governments, regulators and financial managers must pay far more attention to these high impact but lower likelihood #risks, because avoiding irreversible outcomes by cutting carbon #emissions is far cheaper than trying to cope with them. “We’re not dealing with manageable economic adjustments,” said Dr Jesse F Abrams, at the University of Exeter. “The climate scientists we surveyed were unambiguous: current economic models can’t capture what matters most – the cascading failures and compounding shocks that define climate risk in a warmer world – and could undermine the very foundations of economic growth.” “For financial institutions and policymakers, it’s a fundamental misreading of the risks we face,” he said. “We are thinking about something like a 2008 [crash], but one we can’t recover from as well. Once we have ecosystem breakdown or #climatebreakdown, we can’t bail out the Earth like we did the banks.” Mark Campanale, CEO of Carbon Tracker, said: “The net result of flawed economic advice is widespread complacency amongst investors and policymakers. There’s a tendency in certain government departments to trivialise the impacts of climate on the economy so as to avoid making difficult choices today. This is a big problem – the consequences of delay are catastrophic.” Read more below. Read the report here: https://lnkd.in/erv73pNh

New UNSW paper "Reconsidering the macroeconomic damage of severe warming" gives much higher estimates of future economic costs of high level climate change than typical in the modelling literature. https://lnkd.in/gUWhWCY5 It's a useful illustration of what might happen - while many traditional economic model estimates likely underestimate the impacts and risks, probably by a lot. I'm quoted in the Guardian: "(traditional economic) models say that climate change makes little difference to the future world economy, which is contrary to what physical impact science and a nuanced understanding of interdependencies in the economy would suggest.” https://lnkd.in/gQESQpW6 Here's a fuller set of comments by me: There is a long tradition of economic modelling that clearly and severely underestimates the economic effects of climate change. Traditional economic models do not represent the risk of systemic disruptions or compounding impacts leading to systemic failure, and they assume high degrees of substitutability between different economic activities. These models are then fed with some selected assumptions about climate impacts. The result is that the models say that climate change makes little difference to the future world economy, which is contrary to what physical impact science and a nuanced understanding of interdependencies in economy would suggest. On the substitutability point: So if for example agriculture becomes unviable in a part of the world, these models assume that there will be more agricultural output elsewhere to make up for it, and former farmers will simply work in other jobs. In reality, collapsing food supply chains can lead to major disruptions including famine and conflict and thereby big losses in economic activity.   Decisionmakers usually see low estimates of economic impacts from climate change, from traditional models that do not properly represent economic risks from climate impacts. Those models are very likely to under-estimate the economic impacts, and perhaps dramatically so. Alternative analyses that illustrate that there is a risk of severe economic damages are useful to counter-balance the low-ball estimates. We do not know how badly future economies will be affected, both because we do not know the precise nature of future climate impacts and because we do not know how flexible or inflexible economies will be in adapting to those effects. But there clearly is a risk of very bad economic outcomes, which decisionmakers in government and in business need to be aware of. Graham Readfearn Andrew Pitman, AO, FAA Tim Neal Ben Newell

#emperors #new #clothes It would be funny, if it wasn't deadly "***Emperor’s New Climate Scenarios – a warning for financial services*** 4 July 2023 Scenario modelling is an important component of the actuarial risk-management toolkit. In the context of climate change, scenario modelling enables financial institutions and regulators to investigate the impact of different climate futures, which is important given the challenges we face. The IFoA has partnered with the University of Exeter to produce this paper demonstrating how a deeper understanding of climate change, including #tippingpoints can improve financial services climate- scenario modelling. In the paper we use actuarial principles to examine the limitations and assumptions in relation to climate-change scenario modelling practices in financial services, focusing on hot-house world scenarios of 3˚C or more of warming. ***It demonstrates how current techniques exclude many of the most severe impacts we can expect from climate change, such as tipping points and second order impacts – they simply do not exist in the models meaning the models understate the level of risk.*** ***Our objective in writing this paper is to help accelerate the progress of more realistic scenario modelling, which we in turn hope will help to further accelerate the progress on decarbonisation we need.*** Key findings: - Many climate-scenario models in #financialservices are #significantly #underestimating #climate #risk - #Carbon #budgets may be smaller than anticipated and risks may develop more quickly - Regulatory scenarios introduce consistency but also the risk of group think, with scenario analysis outcomes being taken too literally and out of context - Education is needed on the assumptions underpinning the models and their limitations - The development of realistic qualitative and quantitative climate scenarios is required - Model development is required to better capture risk drivers, uncertainties and impacts " Read paper here: https://lnkd.in/egmP9dUA

𝗔𝗿𝗲 𝗰𝘂𝗿𝗿𝗲𝗻𝘁 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗺𝗼𝗱𝗲𝗹𝘀 𝗳𝗮𝗶𝗹𝗶𝗻𝗴 𝘂𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗳𝗮𝗰𝗲 𝗼𝗳 𝗮 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗰𝗿𝗶𝘀𝗶𝘀? The Institute and Faculty of Actuaries’ latest report, “𝗣𝗹𝗮𝗻𝗲𝘁𝗮𝗿𝘆 𝗦𝗼𝗹𝘃𝗲𝗻𝗰𝘆: 𝗙𝗶𝗻𝗱𝗶𝗻𝗴 𝗢𝘂𝗿 𝗕𝗮𝗹𝗮𝗻𝗰𝗲 𝘄𝗶𝘁𝗵 𝗡𝗮𝘁𝘂𝗿𝗲,” makes a sobering observation: “The severity and frequency of extreme events are unprecedented and beyond model projections.” This stark reality exposes the limitations of existing climate and economic models in estimating the true scale of extreme losses. ➤ 𝗞𝗲𝘆 𝗳𝗶𝗻𝗱𝗶𝗻𝗴𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗿𝗲𝗽𝗼𝗿𝘁: • Between 2070 and 2090, climate impacts could reduce global GDP by as much as 50%—a devastating blow to economies and societies. • The current market-led approach to mitigating climate and nature risks is not delivering the systemic change required to avoid catastrophic outcomes. • Without urgent, risk-informed policy, global risk management will continue to fall short. ➤ 𝗪𝗵𝗮𝘁’𝘀 𝘁𝗵𝗲 𝗶𝘀𝘀𝘂𝗲 𝘄𝗶𝘁𝗵 𝗰𝘂𝗿𝗿𝗲𝗻𝘁 𝗺𝗼𝗱𝗲𝗹𝘀? Existing models fail to account for the compounding effects of extreme events, such as simultaneous natural disasters or irreversible tipping points in ecosystems. These blind spots make it nearly impossible to quantify the true scale of risk, leaving policymakers ill-prepared to act. ➤ 𝗪𝗵𝘆 𝗱𝗼𝗲𝘀 𝘁𝗵𝗶𝘀 𝗺𝗮𝘁𝘁𝗲𝗿? We need a paradigm shift in how we measure and manage risk. The “𝗣𝗹𝗮𝗻𝗲𝘁𝗮𝗿𝘆 𝗦𝗼𝗹𝘃𝗲𝗻𝗰𝘆” framework offers a solution, advocating for a systems-based approach that integrates environmental, societal, and economic factors to guide decision-making. This isn’t just a challenge for actuaries or policymakers—it’s a call to action for all of us. 📖 𝗥𝗲𝗮𝗱 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗿𝗲𝗽𝗼𝗿𝘁: https://lnkd.in/eWXVK5DN ___________ Stay ahead with insights on sustainability, climate, and innovation. Follow me on LinkedIn: http://bit.ly/4fPYlqz

🧊 Europe might not just get warmer — it could plunge into an Arctic deep freeze. That’s the shocking possibility I came across in a new study published this week in Geophysical Research Letters. And it’s got me rethinking how we model climate risk — and how dangerously narrow our assumptions might be. 💡 The research looks at what happens if the Atlantic Meridional Overturning Circulation (AMOC) — the ocean “conveyor belt” that keeps Northern Europe warm — collapses in a world that’s already 2°C hotter than pre-industrial levels. The results? - Oslo: winter temperatures could drop to -55°F - London: average cold extremes around -2.2°F - Sea ice: spreading south to the UK, Netherlands, Scandinavia - Storms: more intense over Western Europe And still… deadly summer heat from global warming remains 🧠 As someone working on carbon tracking and decarbonization strategies, this flips the script we’ve been using for years. Because we usually plan for: • A hotter Europe • Milder winters, longer growing seasons • Climate threats concentrated in the Global South But this model says: hold on — a warming world doesn’t rule out regional cooling shocks. And they could be devastating: 🌾 Agriculture would be hit hard by extreme cold 🏙️ Infrastructure isn’t designed for Siberian winters in Western Europe 🌍 Global weather would destabilize further — even as parts of the US keep heating To me, this changes the story. We talk a lot about tipping points, but rarely do we visualize their aftermath with this kind of precision. This study does — and what it shows is chilling, literally and politically. 📌 This is why our carbon methodologies aren’t just about tonnes removed or offset. They’re about risk, permanence, and systems thinking. AMOC collapse isn’t priced into most decarbonization roadmaps. But maybe it should be. What this tells me — and what I hope more policymakers see — is that climate uncertainty doesn’t just mean “hotter faster.” It can also mean colder, stormier, and wildly out of sync with our expectations. We need to prepare for both. Because planning for the wrong future can be just as dangerous as not planning at all. #ClimateRisk #AMOC #Decarbonization #OceanCurrents #Sustainability #GHG #Resilience #Europe #ColdShock #ClimateStrategy #CarbonAccounting #NetZero #GeophysicalResearch #SQUAKE #SystemsThinking #ExtremeWeather #ClimateAdaptation