Institute and Faculty of Actuaries (IFoA) Paper: Climate Emergency – tipping the odds in our favour
This article briefly highlights the main points of the IFoA policy briefing paper for COP27, ‘Climate Emergency – tipping the odds in our favour.’ The paper was authored by Sandy Trust, Lucy Saye, Sir David King, Riti Patel and Alex Martin.
Climate change is essentially a risk management problem on a global scale. The paper looks at how risk management techniques can be applied to address climate change. The paper supports the three ‘Rs’ of the Climate Crisis Advisory Group (CCAG): reduce emissions, remove greenhouse gases (GHGs) and repair the Earth’s carbon cycles.
The paper applies elements of the risk management control cycle to climate change:
Risk identification
A global temperature increase of 1.5OC is extremely risky, with a high chance of triggering a number of tipping points if temperature increases meet or exceed this level. These tipping points include the collapse of ice sheets in Greenland, West Antarctica and the Himalayas, permafrost melt and Amazon dieback. These tipping points may interact with one triggering another, combining to increase the severity of impacts.
Risk monitoring
Climate change is occurring faster than anticipated. Arctic warming and sea level rises are happening faster than projected previously by the Intergovernmental Panel on Climate Change (IPCC). Sea levels are 20cm above their 1901 levels, and even if emissions stopped today, sea levels are likely to rise 30cm to 100cm by 2100, and possibly as much as 200cm.
The changes are not uniform. Arctic temperatures are being seen at 3OC above pre-industrial levels, and permafrost is thawing 70 years sooner than projected.
Risk measurement
The IPCC has modelled various pathways to evaluate the effect of climate change:
- Pathways that meet the Paris Agreement[1] depend on negative emissions and GHG removal.
- Even low emission pathways (in line with the Paris Agreement) lead to long-term sea level rises, presenting huge challenges for adaptation.
- Low emission pathways give a low probability of limiting global warming to 1.5O
Risk control and identification
Uncertainty must be recognised as part of the approach to addressing climate change. Global emissions are on track to reduce by 7.5% by 2030, but a drop of 55% is needed to reach the 1.5OC target. Adaptation must be used to plan for further warming and climate impacts.
Solutions for a stable climate
The three ‘Rs’ need to be pursued for the mitigation of climate change. After net-zero emissions are reached, the world must move to a ‘beyond net zero’ pathway until a safe level of GHG concentration is restored. Societies and ecosystems will require adaptation and resilience to address the inevitable impacts of climate change. The transition needs to be ‘just’. Rich countries have benefited from 200 years of emissions but have been slow to reduce emissions. Financial support for poorer countries is needed for both mitigation and adaptation.
References
[1] The Paris Agreement has a long-term goal of holding the global average temperature increase to “well below 2°C above preindustrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels”.
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