Bernd Eggen. Formerly senior climate change consultant, UK Met Office ofreció esta ponencia dentro del evento "Adapting my business" organizado por Factor CO2 y celebrado el 7 de junio en Casa América, Madrid

1. How to evaluate climate
information in a company
Bernd R Eggen, PhD
Climate Science Advisor

2. Contents
• Introduction
• Concepts
• Case Studies
– Energy
– Banking
– Insurance
– Transport
• Conclusions
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3. Introduction
IEA, May 2012: Global carbon-dioxide emissions
increase by 1.0 Gt in 2011 to record high (31.6 Gt).
“The new data provide further evidence that the
door to a 2°C trajectory is about to close”
IEA Chief Economist Fatih Birol
Climate Change Adaptation ≈ Climate Risk Management
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4. Introduction
• 1997 – 2006 Schlumberger,
including Carbon Capture and Storage
• 2007 – 2009 UK Met Office Hadley Centre
• 2009 – 2010 Halcrow (Engineering Consultancy)
• 2010 – present BRE Climate Consulting Ltd
• 2011 – present UK Health Protection Agency
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5. Climate Observations - Temperature
• Widespread warming has been observed over Spain since
1960 with greater increases in summer than winter.
• Fewer cool nights and more warm nights, and
fewer cool days and more warm days.
• There has been a general increase in summer
temperatures averaged over the country as a result of
human influence on climate, making the occurrence of
warm summer temperatures more frequent and cold
summer temperatures less frequent.
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6. Climate Observations - Rain
• There has been a reduction in the amount of
annual rainfall in the Iberian Peninsula since
1960 with the largest reduction in the
northwest and the lowest reduction in the
east.
• Spain is affected by precipitation extremes
(i.e. droughts, hail storms, flooding).
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7. Decadal Trends: Temperature & Rainfall
Met Office Crown copyright
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8. Influence of Anthropogenic Forcings
Met Office Crown copyright
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9. Climate Change Projections
• For the A1B emissions scenario, increases in
temperature of up to around 4°C by end of 21st
century are projected over Spain, with the highest
agreement between models towards the south of
the country.
• Projected decreases in rainfall over Spain could be
>20% in the southwest of the country, and between
10% and 20% over other parts.
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10. Impacts of Climate Change
• Increases in water stress.
• Uncertainty whether extreme short-term
precipitation and associated pluvial flooding
may either increase or decrease.
• No firm conclusions with regards to changes in
fluvial flood hazard, likely risk to decrease.
• Sea level rise (SLR) impacts in coastal areas
could be large in the absence of adaptation.
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11. Emerging Issues
• Hurricanes / Tropical Cyclones (Vince 2005,
Gordon 2006, Helene 2006, Grace 2009, Otto
2010, Katia 2011).
• “Medicanes” (tropical-like storms
over the Mediterranean Sea), e.g.
Tropical Storm 01M, 2011.
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12. Concepts
• Climate change (CC) manifests itself through
changes in frequency of extreme weather
events, new weather events (in historic sense)
as well as in shifting averages (e.g. sea level).
• CC projections have a degree of quantitative
(i.e. meteorological parameters), temporal &
spatial uncertainty.
• In the short term climate variability is more
important than climate change.
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13. Concepts / Questions
• Given the current uncertainties in climate
projections, how can companies plan adaptive
measures ? Reduce risk of mal-adaptation ?
• How can a company evaluate key current and
future vulnerabilities in their assets,
operations, supply and distribution chains ?
• Are there opportunities from climate change
adaptation for your company ?
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14. Concepts
• Some companies may have a quantitative
understanding how CC issues affect them, or
only a qualitative idea of their vulnerabilities;
some organisations may think CC is not an
issue.
• Insights into Climate Change Adaptation by UK
Companies (CDP, Mar 2012) finds: 80% of FTSE
100 companies identify substantive risks to
their business as a result of climate change.
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15. Insights into CCA by UK Companies
• The quantification of the financial implications of
risks and costs of adaptation by corporations
appears to be quite poor, with many risks
unquantified. As a result there is a potential that
these risks will not be incorporated properly into
corporate strategies.
• Less than half of FTSE 100 companies incorporate
climate adaptation into their business strategies.
Among those that do, the main focus is on assets,
followed by logistics and finance.
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16. Framework - Types of Adaptation
• Planned adaptation - the result of a deliberate policy decision,
based on an awareness that conditions have changed or are about
to change, and that action is required to maintain, or achieve, a
desired state.
• Reactive adaptation - adaptation that takes place in response to
the consequences of a particular event.
• Anticipatory adaptation - takes place before impacts of climate
change are observed.
• Spontaneous (or autonomous) adaptation - not a conscious
response to climatic stimuli, but triggered by ecological changes in
natural systems, and by market or welfare changes in human
systems
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17. Types of Climate Risk Management
• Scoping studies, then in-depth assessments;
• Due diligence analysis;
• Technical support for company reports;
• Climate change advisory.
• “Poor risk assessment leads to risks not being
properly incorporated into strategic decision-
making.” (from CDP report)
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18. Adaptation Strategies
Adaptation strategies Description Examples of adaptive actions
Preventing losses Take action to reduce the exposure to Building sea walls, flood barriers
climate impacts
Tolerating losses Accept losses where it is not possible or Accept reduced crop yield
cost-effective to avoid them
Spreading or Distribute the burden of impacts over a Insurance of assets
larger region or population beyond those
sharing losses
directly affected by the climate event
Changing use or Switch of activity or resource use to one New business opportunities
better suited to the changed climate (e.g. tourism, agriculture,
activity
insurance)
Changing location Migrate to an area which is more suitable Assets moved away from areas at
under the changed climate risk of flooding
Restoration Restore assets to their original condition Re-building or replacement of
following damage or modification due to damaged assets
climate
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19. Relevant steps for climate change adaptation
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20. Project Design & Resilience
Opportunities for Projects Extreme Event Effect on Infrastructure / Projects
Flood defences Sea level rise Inundation, loss of airdraft (e.g. bridges /
cranes)
Coastal areas, ports Tropical storms (e.g. Flood and wind damage, operational
hurricanes) downtime
Drainage and sewers Flooding Flood damage, operational downtime
Water storage, reservoirs Drought -> water scarcity Operational downtime, subsidence
Building design Heat Waves Damage to materials, operational
downtime
Infrastructure in Arctic regions Permafrost thaw Subsidence
Transport infrastructure [many of the above] [many of the above]
Transport planning [many of the above] Shift in transportation patterns (e.g.
tourism)
Economic modelling [many of the above] [many of the above]
Environmental modelling [many of the above, and [many of the above, and more]
more]
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21. Case Study: Energy Phase 2
• EP2 followed scoping study (with 3 energy
companies), this was industry-funded, involving
11 UK energy companies, focusing on the
priorities identified by the earlier study.
• How climate change will affect energy
generation; distribution and
transmission, and demand.
Study identified areas where
further research is required.
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22. Case Study: Energy Phase 2
• Improve demand forecasting and
planning up to 10 years ahead.
• Underground cables require “de-
rating” because of higher soil
temperature.
• Efficiency of CCGT lowered with
higher air temperature.
• Urban heat island effect can
exacerbate warming trends.
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23. Case Study: Energy Phase 2
Climate Change Adaptation
Planning Guide for EP2.
This schematic gives users a
guide to when the energy
industry should plan and
adapt to climate change,
based on the results of EP2.
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24. Case Study: Barclays
• Storm Shelter: Managing Climate Risks in
Africa (commissioned by Barclays Bank).
• Comprehensive overview of the economic
impacts of climate variability & change in
Africa (current and future climate risks).
• Infrastructure adaptation opportunities.
• The specific challenges for businesses in
managing the impact of climate change.
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25. Case Study: ABI
• “The Financial Risks of Climate Change” used
current climate and insurance catastrophe models
to examine the financial implications of predicted
global temperature rises of 2, 4 and 6 °C on the
insured cost of flood and windstorm damage in the
UK.
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26. Case Study: ABI
• Assuming a global temperature rise of 4°C:
Inland flood component of insurance premiums
could increase by around 21% across UK and insured
flood losses in UK could rise by 14% to £633 million.
• The average annual insured wind losses in the UK
could rise by 25% to £827 million assuming a 1.45°
southward shift in storm track across the UK. The
insured wind-related loss from winter season
windstorms in the UK occurring on average once
every 100 years could rise by 14% to £7.3 billion.
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27. Case Study: Transport Sector
• Eurocontrol “Challenges of growth”.
• Addresses potential economic and operational
impacts of climate change on aviation.
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28. Case Study: Eurocontrol
Apart from physical
parameters (right),
the study also looked at:
• The effect of CC on public
attitudes to air travel;
• CC impacts on the air
transport industry;
• The impact of CC on
aviation markets.
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29. Conclusions I
• Climate change beyond 2°C temperature rise
by end of 21st century becoming more likely,
as mitigation efforts so far not effective.
• Many companies have started to include
climate change adaptation issues in their
climate change risk strategy, especially where
governments have provided policy support.
• Utility companies have in general investigated
risks more quantitatively than others.
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30. Conclusions II
• Important to investigate knock-on effects from
climate impacts onto infrastructure, supply &
distribution chains etc.; “360° view” required.
• Be mindful of extreme events (“climate shocks”),
not just slowly moving averages.
• There are opportunities from climate risk
management, not just threats.
• Effective climate risk management makes a
company more resilient & competitive.
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32. Further Reading I
 Climate change adaptation for UK businesses
(MOHC & CBI)
 Climate change and underground cable
performance (EP2)
 The Financial Risks of Climate Change (MOHC
& ABI)
 Storm shelter: Managing climate risks in
Africa (MOHC / Barclays)
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33. Further Reading II
 Climate Change Adaptation & Resilience
Study (Halcrow & WMCCAP)
 Adapting to Climate Change (Halcrow / Welsh
Water)
 Spain – Climate: observations, projections
and impacts (MOHC)
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34. Further Reading III
• Adapting to climate change in the
infrastructure sectors (PWC, Nov 2010)
URL
http://archive.defra.gov.uk/environment/climate/documents/
infrastructure-pwc-full.pdf
• Insights into Climate Change Adaptation by UK
Companies (CDP, Mar 2012)
URL
http://archive.defra.gov.uk/environment/climate/documents/
cdp-adaptation-report.pdf
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35. Some Key Terms
 Adaptation Reporting Power = ARP (Defra =
Department for Environment, Food and Rural
Affairs)
 UK Climate Change Risk Assessment = CCRA
(Defra)
 National Adaptation Programme = NAP
(Defra)
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