Some of the worst risks posed by climate change are often excluded from economic models, study shows
The low-lying banks of the Jamuna River in Bangladesh are often subject to massive flooding. (Kevin Krajic/Earth Institute)
The risks of climate change may be greater than economists typically calculate because their models often rule out potentially damaging but hard-to-quantify threats such as collapsed ocean currents, civil unrest and major weather disasters. A new study published in the peer-reviewed journal Nature.
Economic modelling is widely used by governments to understand the potential risks of continued warming and the potential benefits of reducing emissions. These models ignore a wide range of risks, the authors of the new study say.
“Many risks are completely ignored, reducing the probability of their occurrence to zero, but that’s not the case,” said study co-authors. Marco Tedesco Columbia Climate School’s Lamont-Doherty Earth Observatory.
“Economic models of climate change often tell governments to focus only on the most likely outcomes,” said lead author James Rising of the University of Delaware. “This is akin to assuming that there is no need to prepare for pandemics and terrorist attacks. Responsible governments know that it is their job to predict unpredictable but potentially damaging events.”
Quantifying the risks of climate change to individuals, companies and governments requires a challenging mix of science, biology, economics and other fields. The study shows how some important possibilities are lost in the process. These include excluded risks because they cannot be precisely quantified, such as an increase in the number and duration of wars. Also missing: major changes in planetary systems, such as the collapse of the Atlantic circulation. Although many scientists consider such an event unlikely, it is often excluded from models entirely because social and economic consequences have not yet been calculated.
Another missing risk: damage from the most extreme weather events. According to the Pakistani government, recent floods in Pakistan, partly due to climate change, have caused damages of about $30 billion to $40 billion, or 10 percent of the country’s GDP. However, the model ignores this risk of seemingly one-off events, focusing instead on long-term trends.
The authors also considered risks commonly referred to as “unknown unknowns”—risks that have not been anticipated or even imagined. “Even with rapid emissions reductions aimed at limiting warming to 2 degrees Celsius, the climate could triple because of feedback effects that we don’t fully understand,” Rising said. “That means losses will at least double.”
The authors propose ways to better address such risks, including collaborations within and between the natural and social science communities.
The study was also co-authored by Franziska Piontek of the Potsdam Institute for Climate Impact Research and David Stainforth of the London School of Economics.
Adapted from a press release from the University of Delaware.
