It has been 25 years since climate change moved into the global public consciousness. Twenty-five years since NASA’s James Hansen presented his seminal testimony on Capitol Hill. Twenty-five years since the Intergovernmental Panel on Climate Change (IPCC) began its work as the scientific advisory body to the world’s governments. Twenty-five years since electric power producer AES pursued the first corporate carbon offset project.
Today, 25 years later, the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) has collapsed, with no alternative mechanism in sight (at least nothing expected to enter into force before 2020). Global carbon markets have largely collapsed, with certified emissions reductions (the primary currency of the global carbon market), trading at penny stock levels. Global greenhouse gas (GHG) emissions continue to rise, with CO2 concentrations in the atmosphere now surpassing 400 ppm, a 40% increase over pre-industrial times. Climate change itself appears to be accelerating, as perhaps most widely illustrated by the regular new records being set for declining Arctic sea ice.
The reality is that when it comes to achieving the universally agreed upon goal of the UNFCCC (avoiding dangerous anthropogenic interference with the climate system), we have dropped the ball. Even more telling, notwithstanding the valiant efforts of so many for so long, we seem to have little idea of what a truly politically and economically viable way forward on climate change looks like. Climatography, as we define it, represents the study of getting “from here to there” on climate change, when “getting there” is so hard. An alternative metaphor, as reflected in the political cartoon shown above, is that of climate change as a 1,000,000 piece jigsaw puzzle. Climatography, through this lens, represents the need to consciously seek out the many pieces of the jigsaw puzzle that a successful response to climate change will probably require.
Most scientists believe that dangerous interference with the climate system has become inevitable, and that the associated societal and business risks (Risk = Hazard x Consequence x Probability) will grow if the gap between climate science and climate policy continues to increase. As a result, businesses face at least two potential Climate Response Tipping Points (CRTPs), each with potentially dramatically material business connotations.
- The first potential tipping point involves the impacts of climate change itself on business operations and markets; these impacts could suddenly increase in frequency and magnitude.
- The second potential tipping point involves policy responses to accelerated climate change; such responses could prove far more draconian than any policy framework seriously considered to date.
Frequent disasters of all kinds remind us that even well-understood risks can be difficult to accurately assess and manage. Adding climate change to the “risk mix” creates unique challenges for decision-makers. What today’s climate risk management gap suggests is that we have not adequately answered the two questions that underlie risk management decision making:
- Is it worth it? In other words, is it worth it to me as a decision-maker to tackle the topic in question (whether personal weight loss or corporate climate risk management)?
- Can I do it? In other words, if I decide it is worth it, can I successfully reduce risk by implementing a risk management strategy of some kind (whether through mitigation, adaptation, or other measures in the case of climate risk)?
Climatography starts from the premise that climate risk management is no longer really about the science; it is about the interplay between risk perception and human decision-making. The volume of knowledge relevant to answering a particular company’s “is it worth it, can I do it” questions is large and always expanding, but decision-makers tend to have access to a small and constantly shrinking fraction of that knowledge. This situation almost guarantees sub-optimal decision-making outcomes, and in some cases may put a company’s future at risk. Our goal as Climatographers is to support corporate risk management decision-making, leading to more robust risk management outcomes.