A risk management approach to climate change adaptation

1. A risk management approach to climate change adaptation CENTRE FOR STRATEGIC ECONOMIC STUDIES BUSINESS AND LAW Roger N Jones May 21 2009

2. Structure of talk • Estimating climate risk probabilities • Hedging adaptation and mitigation • How much climate change do we need to adapt to by when? • Taking a whole of climate approach

3. Framing climate change risk

4. The likelihood of risk The probability of exceeding a given level of change

5. 100 100 80 80 75 cm 75 cm 60 60 Sea Level Rise (cm) Sea Level Rise (cm) 50 cm 50 cm 40 40 25 cm 25 cm 20 20 0 0 0 100 0 100 Probability (%) Probability (%) 100 100 100 100 80 80 80 80 75 cm 75 cm 75 cm 75 cm 60 60 60 60 Sea Level Rise (cm) Sea Level Rise (cm) Sea Level Rise (cm) Sea Level Rise (cm) 50 cm 50 cm 50 cm 50 cm 40 40 40 40 25 cm 25 cm 25 cm 25 cm 20 20 20 20 0 0 0 0 0 5 10 0 100 0 5 10 0 100 Probability (%) Probability (%) Probability (%) Probability (%) 75 cm 50 cm 25 cm

6. 100 100 80 80 75 cm 75 cm 60 60 Sea Level Rise (cm) Sea Level Rise (cm) 50 cm 50 cm Most likely Most likely 40 40 Most likely 25 cm 25 cm 20 20 0 0 0 100 0 100 Probability (%) Probability (%) 100 100 100 100 Problematic Problematic Problematic 80 80 80 80 75 cm 75 cm 75 cm 75 cm Uncertain Uncertain Uncertain 60 60 60 60 Sea Level Rise (cm) Sea Level Rise (cm) Sea Level Rise (cm) Sea Level Rise (cm) 50 cm 50 cm 50 cm 50 cm 40 40 40 40 Robust Robust Robust 25 cm 25 cm 25 cm 25 cm 20 20 20 20 0 0 0 0 0 100 0 5 10 0 5 10 0 100 Probability (%) Probability (%) Probability (%) Probability (%)

7. Climate change & impacts – what are the risks? The post-2000 global growth path • Global growth has accelerated in the past decade, driven by the developing countries, especially China and India • This growth is energy and coal intensive, and likely to continue • Realistic projections of energy use and CO2 emissions to 2030 are above the SRES marker scenarios, including A1FI

8. Implications for GHG emissions and atmospheric concentrations • Minimum emissions paths (MEPs) – strong policy measures from 2010 to 2030* • The 2030 MEP resembles the SRES A1B “on steroids” • Current growth to 2100 under reference conditions resembles SRES A1FI “on steroids” • STOP PRESS: What about the GFC? • Sheehan et al., Global Environmental Change 2007 Samples have been taken and referred to the stewards – still awaiting the results

9. Minimum emissions paths 2010–2030

10. Likelihood of exceedance – range of reference and policy scenarios

11. Framing adaptation • Goal setting • Where do we want to go? (aspirational goals) • How do we want to get there? • What are the risks? • What are the barriers? (e.g., lack of adaptive capacity)

12. Planning horizons

13. Operational pathways and aspirational goals

14. How much climate change needs to be adapted to by when Types of climate information required: • Climate variability (daily to decadal) • Ongoing rate of change • Past and near term commitments to climate change • Regional climate change projections • Climate sensitivity • Greenhouse gas emission policies (Mitigation)

15. Emission scenarios Climate sensitivity Past and near-term commitments Warming rate Reference and policy scenarios for hedging adaptation and mitigation

16. Business as usual world (reference)

17. Business as usual world (reference)

18. Climate policy world

19. Climate policy world

20. Hedging adaptation and mitigation – reference and policy scenarios Mitigation benefits MIT-AD AD-MIT Adaptation benefits

21. Hedging strategies between reference and policy scenarios with high policy uncertainty

22. Whole of climate approach • Links current climate and adaptive responses with future possibilities • Ongoing variability and extremes are the main drivers of current adaptation to climate • Links between variability and longer-term change give current experiences a future dimension. • Long-term fluctuations in natural climate variability may be affecting some regions • Not all climate change is anthropogenic

23. Whole of climate approach An understanding of the dynamics of climate variability is needed to: • Diagnose fluctuations, shifts or trends as temporary, persistent or permanent. • If the dynamics of the change are not understood, statistical or other methods can be used to explore “what if” questions based on understandings of climate model and historical behaviour.

24. Regional example of climate changes – Melbourne, Australia The Melbourne Region has experienced many step changes rather than trends For a 1 by 1 degree area over greater Melbourne: Annual rainfall: statistically significant downward shift in 1996 in rainfall from just over 900 mm to 750 mm, -17%. Max temp: Statistically significant upward step change 1998 of 0.6°C. About half of this can be explained by the decrease in rainfall (due to a decrease in cloud cover). About half (0.3°C) is added warming Analysis of annual frequency of days >35°C and >40°C not significant All days under 30°C have become significantly warmer During summer (DJF) almost 1°C warmer

25. Regional example of impacts – south-eastern Australia Streamflow: 60% up to 80% across western Victoria, 25–60% in eastern Victoria. Extreme fire weather index (temperature, lower humidity and higher winds): 100 on Black Friday in 1939, 115 on Ash Wednesday in 1983 150–200 on Black Saturday, February 2009 Viticulture: harvest 4–6 weeks earlier, crop losses, smoke damage Horticulture, dairy: under stress in irrigation regions Snow: reduced snow cover Human health (heat stress): hundreds(?) dead from heat stress, 220+ from fires, event trauma, drought stress in rural regions Environment: woodland birds decline, tree die-back accelerated, tree planting failures, icon wetlands critical, frequent hot fires

26. Annual Streamflows 1997-2007 c.f. Long Term Average > high CC by 2055 A 89 ~medium-high CC by 2055 37 86 56 78 38 84 23 64 69 35 31 70 64 85 55 81 25 38 71 85 38 34 83 41 57 55 52 Source. R. Moran DSE Vic.

27. System Inflows MURRAY 50% less 2006 LOWEST ON RECORD MELBOURNE 37% LESS Source. R. Moran DSE Vic.

28. Demand change We thought we were here Critical threshold Supply change  Future water supply system vulnerability • Sensitivity to supply changes (climate, land-use, fire) • Level of utilisation • Demand projections Current management Marginal planned change Substantial change

29. Demand change Critical threshold Supply change  Current water supply system vulnerability • Large-scale climate change • Competing demands from systems under stress (urban, industrial, agriculture, environment) • Pressure between managing short-term political risk and long-term sustainability We thought we were here Management as usual Managing current vulnerability But we are here Emergency management

30. Sensitivity of mean streamflow to climate change uncertainties • Global warming signal ~25% • Rainfall change (as function of global warming) ~67%–75% • Potential evaporation change ~10%

31. Exploring decision analysis

32. Choosing climate information • Understand risk and risk management options – how is climate information used in decision-making for specific risks? • What is my planning horizon and operational pathway? e.g., up front, incremental, wait and see • What’s my climate baseline? • Choose scenarios based on sensitivity, risk tolerance and hedging strategies • Determine local scaling and down-scaling needs for key climate variables • Undertake assessment e.g., modelling, expert analysis

33. Explore consequences of decision-making – thresholds and key vulnerabilities • Determine critical limits. E.g., sea level rise, storm severity or surge protection, flooding, public health limits, water quality and supply • Diagnose specific climate conditions leading to critical limits • Establish plausible combinations of change in mean and variability, natural and anthropogenic, leading to critical thresholds • Determine likelihood that such conditions may be exceeded within planning horizons. For cities, many of these horizons will be long-term

34. Caveats and working principles • All probabilities are subjective – test different plausible assumptions to test whether outcomes (decisions on risk management) are sensitive to assumptions • What information is required to make a specific decision? The less important climate is compared to other risk factors, the less precision will be required • A 1°C warming in 2030 (from 1990) is as likely as not. From 2040+, considerable hedging between adaptation and mitigation is required. Without solid emissions policy, hedging for >3°C warming by 2100 needs to be contemplated. • Sea level rise estimates need to consider outcomes not quantified in the IPCC AR4, including Greenland and perhaps West Antarctica

35. Plan early!!

36. CONTACT DETAILS ROGER N JONES BUSINESS AND LAW CENTRE FOR STRATEGIC ECONOMIC STUDIES PHONE +61 3 9919 1992 FAX +61 3 9919 1350 EMAIL roger.jones@vu.edu.au WWW.VU.EDU.AU