open-source adaptation shaping climate-resilient development · 2017-07-28 · open-source...
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Open-source AdaptationShaping Climate-resilient developmentDavid N. BreschHead Business Development, Global Partnerships, Swiss ReProfessor for Weather and Climate Risks, ETH, [email protected]
Economics of Climate Adaptation (ECA)Key messages
Today, weather and climate related damages are substantial. Natural catastrophes do have an impact on sovereign ratings.
In many places they are – based on the projection of future economic development and analysis of climate scenarios – likely to double before mid-century.
Depending on the region, up to 80% of this increase is driven by economic development in hazard-prone areas, such as (mega)cities in coastal regions.
The good news: cost-effective adaptation measures exist. Up to 60% of the projected increases in damages can be cost-effectively averted – a strong case for preventive action and pre-emptive risk management.
Open-source climada implements the ECA methodology and provides decision makers with a fact base to understand and manage the impact of climate on their economies.
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Source: Swiss Re sigma catastrophe database www.swissre.com/sigma
Weather and climate related damages are substantialNatural catastrophe damages 1970-2015, in USD billion (indexed to 2015)
Sovereign rating impact of Nat Cat events
Based on a sample of 48 countries, simulations
indicate that natural disasters, which can be
expected once in every 250 years, can weaken
sovereign ratings.
Tropical cyclones: country credit rating
downgrades of up to >2 notches
Analysis based on climada
(see next slides), Swiss Re
expertise and S&P rating
methodology
Hypothetical country rating downgrade in notches (AAA, AA+, AA-…)
Growth of assets in exposed areas
Ocean Drive, FL, 1926 Ocean Drive, FL, 2000
Climate change results in rising intensity of storms, forest fires, droughts, flooding and heat waves in many regions. If unmitigated, climate change could cost the world economy around 20% of global GDP by the end of this century.
Main drivers of increasing natural catastrophe losses
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The fact: If we turn up the heat, the water will start to boil
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??? ?
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The Uncertainty:Where exactly the bubbles will be at a certain time is not predictable.
Climate adaptation is an urgent priority
Decision makers of national and local economies ask
What is the potential climate-related loss to the economies and societies over the coming decades
How much of that loss can we avert, with what measures?
What investments will be required to fund those measures and will the benefits of that investment outweigh the costs?
Climate-resilient development needs to assess and address total climate risk
Objectives
Provide decision makers with the facts and methods necessary to design
and execute a climate adaptation strategy
Supply insurers, financial institutions, and potential funders with information
to unlock funding and deepen global risk transfer markets
Methodology
Follow a rigorous risk management approach to assess total climate risk,
the sum of today’s climate risk
+ the economic development paths that might put greater population
and value at risk
+ the additional risks presented by climate change
Propose and prioritize a basket of adaptation measures to address total
climate risk on an economic basis
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[Weather and climate] Risk
Risk is the combination of the probability
[or likelihood] of a consequence and its
magnitude:
Risk = probability x severity
or, to be more specific:
Risk = hazard x exposure x vulnerability
= (probability x intensity) x exposure x vulnerability
severity
Hazard:
Exposure
Vulnerability
Open-source (GitHub, on MATLAB and Octave), open-access databas and open architecture (incl. interfaces)
Widely used, basis for several peer-reviewed publications, past and on-going collaborations with ETH Zürich,
MeteoSwiss, Uni Bern, NCAR, TNC, consultants… https://github.com/davidnbresch/climada
Tropical cyclones in the North Atlantic
historic~100 years
probabilistic~10‘000 years
Open-source (GitHub, on MATLAB and Octave), open-access databas and open architecture (incl. interfaces)
Widely used, basis for several peer-reviewed publications, past and on-going collaborations with ETH Zürich,
MeteoSwiss, Uni Bern, NCAR, TNC, consultants… https://github.com/davidnbresch/climada
Guyana: Flash flood risk to a developing urban area
Tanzania
Tanzania: Drought risk to health and power generation
Samoa: Risk of sea level rise to a small island state
Florida: Hurricane risk to public and private assets
Mali: Risk of climate zone shift to agriculture
India: Drought risk to agriculture
Caribbean: Hurricane risk to small islands
US Gulf Coast: Hurricane risk to the energy system
New York: Cyclones and surge risk to a metropolis
Hull, UK: Flood and storm risk to urban property
Economics of Climate Adaptation (ECA) Working Group, a partnership between the Global Environment Facility, McKinsey & Company,
Swiss Re, the Rockefeller Foundation, ClimateWorks Foundation, the European Commission, and Standard Chartered Bank.
The working group studied more than 20regions with diverse climate hazards
China: Drought risk to agriculture
Bangladesh: Flood risk to a fast-developing city
El Salvador: Flood and landslide risk to vulnerable people
The US Gulf Coast is exposed to hurricane and storm surges - today and in the future
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Cost-efficient adaptation measures could reduce damages by 35%
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Total climate riskUSD 21.5 bn
Risk transfer efficiently provides additional protection for low frequency-high severity events
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Risk, Uncertainty and Decision Making
specify ‚risk appetite‘
incorporate further criteria
(re)prioritize
roadmap & business case funding discussions
measurementreporting & verification
IPCC and UKCIP
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4.3
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Barbados
Bahamas
Fiji
Jamaica
Dom Rep
Aruba
Bangladesh
Bermuda
Vietnam
Guatemala
Honduras
Taiwan
Trinidad and Tobago
Philippines
Colombia
Mexico
Thailand
Indonesia Potential Downgrade, status-quo climate
Added potential downgrades due to climate change
Potential Sovereign Rating Downgrades
(in notches, climate impact scenario 2050)
Source: Standard & Poor‘s, https://www.spratings.com/climatechange
Summarizes all twenty Economics of Climate Adaptation (ECA) studies conducted since 2009
Download from Swiss Re library: http://media.swissre.com/documents/Economics_of_Climate_Adaptation_focus_infrastructure.pdf
Economics of Climate Adaptation (ECA)Shaping climate-resilient development
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Hull, UK: Flood and storm risk to urban property
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New York: Tropical cyclones and storm surge risk to a metropolis
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ECA full report featuring the first 8 case studies, 164 pages
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US Gulf Coast: Hurricane risk to the energy system
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Caribbean: Hurricane risk to small islands
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Guayana: Flash flood risk to a developing urban area
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Mali: Risk of climate zone shift to agriculture
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India: Drought risk to agriculture
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China: Drought risk to agriculture
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A global overview of ECA studies with a focus on infrastructure
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sigma– Natural catastrophes and man-made disasters in 2013
Fostering climate change resilience
Download from Swiss Re libraryhttp://media.swissre.com/documents/sigma1_2014_en.pdf#page=17
Climate change is a fact. Industrialization and human activity has led to a significant increase in greenhouse gas emissions which, alongside natural variability, have pushed global temperatures higher. Rising temperatures are expected to lead to more frequent and severe extreme weather events in the future. If no action to reduce greenhouse gas emissions is taken, these events are likely to become an increasingly important factor in the ongoing upward trend of total losses.
Risk prevention and avoidance, and disaster risk management measures can help build resilience to climate change. So too can risk transfer solutions, by providing financial relief after a disaster has struck. Risk transfer does not stand in isolation: it is an integral part of any climate adaptation strategy.
Storm Alert: Natural Disasters Can Damage Sovereign Creditworthiness
Legal notice
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