25/10/2019

Climate Change Will Cost Us Even More Than We Think

New York Times - Naomi Oreskes | Nicholas Stern

Economists greatly underestimate the price tag on harsher weather and higher seas. Why is that?
Credit Mike McQuade

Authors
For some time now it has been clear that the effects of climate change are appearing faster than scientists anticipated. Now it turns out that there is another form of underestimation as bad or worse than the scientific one: the underestimating by economists of the costs.
The result of this failure by economists is that world leaders understand neither the magnitude of the risks to lives and livelihoods, nor the urgency of action. How and why this has occurred is explained in a recent report by scientists and economists at the London School of Economics and Political Science, the Potsdam Institute for Climate Impact Research and the Earth Institute at Columbia University.
One reason is obvious: Since climate scientists have been underestimating the rate of climate change and the severity of its effects, then economists will necessarily underestimate their costs.
But it’s worse than that. A set of assumptions and practices in economics has led economists both to underestimate the economic impact of many climate risks and to miss some of them entirely. That is a problem because, as the report notes, these “missing risks” could have “drastic and potentially catastrophic impacts on citizens, communities and companies.”
One problem involves the nature of risk in a climate-altered world. Right now, carbon dioxide is at its highest concentration in the atmosphere in three million years (and still climbing). The last time levels were this high, the world was about five degrees Fahrenheit warmer and sea level 32 to 65 feet higher. Humans have no experience weathering sustained conditions of this type.
Typically, our estimates of the value or cost of something, whether it is a pair of shoes, a loaf of bread or the impact of a hurricane, are based on experience. Statisticians call this “stationarity.” But when conditions change so much that experience is no longer a reliable guide to the future — when stationarity no longer applies — then estimates become more and more uncertain.
Hydrologists have recognized for some time that climate change has undermined stationarity in water management — indeed, they have declared that stationarity is dead. But economists have by and large not recognized that this applies to climate effects across the board. They approach climate damages as minor perturbations around an underlying path of economic growth, and take little account of the fundamental destruction that we might be facing because it is so outside humanity’s experience.
A second difficulty involves parameters that scientists do not feel they can adequately quantify, like the value of biodiversity or the costs of ocean acidification. Research shows that when scientists lack good data for a variable, even if they know it to be salient, they are loath to assign a value out of a fear that they would be “making it up.”
Therefore, in many cases, they simply omit it from the model, assessment or discussion. In economic assessments of climate change, some of the largest factors, like thresholds in the climate system, when a tiny change could tip the system catastrophically, and possible limits to the human capacity to adapt, are omitted for this reason. In effect, economists have assigned them a value of zero, when the risks are decidedly not. One example from the report: The melting of Himalayan glaciers and snow will both flood and profoundly affect the water supply of communities in which hundreds of millions of people live, yet this is absent from most economic assessments.
A third and terrifying problem involves cascading effects. One reason the harms of climate change are hard to fathom is that they will not occur in isolation, but will reinforce one another in damaging ways. In some cases, they may produce a sequence of serious, and perhaps irreversible, damage.
For example, a sudden rapid loss of Greenland or West Antarctic land ice could lead to much higher sea levels and storm surges, which would contaminate water supplies, destroy coastal cities, force out their residents, and cause turmoil and conflict.
Another example: increased heat decreases food production, which leads to widespread malnutrition, which diminishes the capacity of people to withstand heat and disease and makes it effectively impossible for them to adapt to climate change. Sustained extreme heat may also decrease industrial productivity, bringing about economic depressions.
In a worst-case scenario, climate impacts could set off a feedback loop in which climate change leads to economic losses, which lead to social and political disruption, which undermines both democracy and our capacity to prevent further climate damage. These sorts of cascading effects are rarely captured in economic models of climate impacts. And this set of known omissions does not, of course, include additional risks that we may have failed to have identified.
The urgency and potential irreversibility of climate effects mean we cannot wait for the results of research to deepen our understanding and reduce the uncertainty about these risks. This is particularly so because the study suggests that if we are missing something in our assessments, it is likely something that makes the problem worse.
This is yet another reason it’s urgent to pursue a new, greener economic path for growth and development. If we do that, a happy ending is still possible. But if we wait to be more certain, the only certainty is that we will regret it.

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Climate Change Costs To Hit These Australian Regions Hardest

AFRJames Fernyhough

The Gold Coast, Brisbane, the Sunshine Coast, Shepparton and the New South Wales Central Coast stand to pay the highest costs from extreme weather events by 2100 if global greenhouse gas emissions continue on their current trajectory, a major new study predicts.
The study, conducted by climate risk analysis company XDI, uses a vast pool of data to estimate the risks of natural hazards such as coastal inundation, riverine flooding, bushfires, soil subsidence from drought and wind damage.
The study covers 15 million addresses across Australia's 544 local government areas, and is intended to be used by a wide range of parties, including local and state governments, investors and banks, to assess risks to existing and potential assets.
Queensland's Gold Coast is facing bigger costs as a result of climate change than any other local government area in Australia.  AAP

Greater Shepparton in Victoria emerged as the local government area most at risk from riverine flooding both in 2020 and 2100, followed by the Gold Coast and Brisbane in Queensland, and Wangaratta in Victoria.
The Central Coast, Lake Macquarie and Blue Mountains areas of New South Wales were the most at risk of bushfires by 2100, followed by the Adelaide Hills in South Australia.
The Gold Coast, Sunshine Coast, Brisbane and Moreton Bay local councils in Queensland will face the highest costs from coastal inundation by 2100, followed by Tweed Heads in New South Wales, the report found.
Brisbane, Sydney, the ACT, Moreton Bay and the NSW Central Coast faced the highest costs from soil subsidence by 2100.
A one-in-500-year event flooded thousands of homes and businesses in Townsville in 2019. AAP Image: Andrew Rankin

Overall, Queensland is the state that will face the highest costs as a result of global warming.
The study used a measure called the "total technical insurance premium", which assigns an annualised cost of climate change-related costs for each council area.
Averaged across Australia, the report predicted the cost would be a seemingly modest 55 per cent higher in 2100 than it is today. But XDI chief executive Rohan Hamden said in the at-risk areas it would be far above that, saying in the Adelaide Hills the cost was expected to rise 100 per cent.
The study found the number of "high risk" properties, which currently sits at 383,300, would double to 735,654 by 2100. That figure only referred to existing properties, with future developments potentially adding to that figure.
It's worse for coastal inundation where the worst 20 per cent of large councils will see a 400 per cent increase of risk. — XDI report
The study assumes global greenhouse gas emissions will continue on trend, which scientists predict will result in an average global temperature rise of 4 to 6 degrees above pre-industrial levels. The international community is aiming to keep temperature increases below 2 degrees by 2100, but without a drastic globally-synchronised ramping up of emission reductions that target will not be met.
Mr Hamden said that meant businesses, governments and institutional investors would need to start factoring in the effects of climate change in earnest when making investment decisions.
He said the information in the report would be “invaluable for the private sector to understand the risks to their assets and investments", adding it could help state governments understand which council areas to prioritise for adaptation.
“Climate related risks are very unevenly distributed. While average risks from flooding may increase by about 30 per cent due to climate, in 20 per cent of large councils flood risk will double,” he said.
“It's worse for coastal inundation where the worst 20 per cent of large councils will see a 400 per cent increase of risk over coming decades.
“With recent climate data companies being acquired by Moody's and MSCI, it’s clear that climate risk data is becoming more and more available to insurers, banks and valuation companies and we need to better understand Australia’s risk so that they can take steps to protect people, infrastructure and property."
He used the example of two companies that own petrol stations, one in high risk areas, and one in low risk areas. Without reliable climate change risk modelling, he said the two companies might look "the same on paper" to an investor. In reality their risk profiles are drastically different.
Mr Hamden said XDI would be marketing its data to companies such as banks and governments, but said it had decided to make this report public as a "call to action".
“If governments and communities act on this information now, many of the projected losses can be averted. Acting with a strategic focus on those communities most at risk will ensure that adaptation is achieved at least cost and can help protect people, infrastructure and assets from harm," he said.
The report answers a call from Australian financial regulators for more information on the nature of climate risk. Earlier this month the Reserve Bank of Australia warned that climate change posed a significant risk to the financial system, and said more data was needed on the nature of those risks.
"To manage their own direct exposure to physical risk, insurers and banks need granular information on the location and physical risks faced by the assets they insure or the collateral they lend against," the RBA said.
Geoff Summerhayes, head of insurance at the Australian Prudential Regulation Authority, earlier this year called for a "common taxonomy around the economic impacts of climate".
He said such a taxonomy was "underdeveloped globally".
"For a risk that is so all-pervasive, that is a concern. My point is it requires multi-disciplined activity. And I think the view here in Australia is that we shouldn't necessarily wait for a global standard. We should get on and advance that case ourselves," he said.

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The New Science Fossil Fuel Companies Fear

POLITICO

Researchers can now link weather events to emissions – and to the companies responsible. A string of lawsuits is about to give “attribution science” a real-life test.
iStock/POLITICO illustration
Richard Heede spent a decade digging through “disheveled, dusty” tomes in libraries around the world searching for the answers he thought could help save humanity.
The Norway-born academic’s task was direct, but far from simple: Find out how many greenhouse gases the world’s fossil fuel companies, cement-makers and other industrial giants had pumped into the atmosphere since the Industrial Revolution. A geographer by training, he tagged library visits onto work trips to pore over annual company and shareholder reports. (“Nobody had seen them for decades,” he recalled.) He painstakingly traced mergers and acquisitions as companies morphed and amalgamated. He enlisted volunteers across the globe.



Like most analysts, Heede started his work on climate change focused on what individual consumers could do to reduce their emissions. After all, it was the consumer who was “consuming” the product and actually releasing the emissions from the oil, gas or coal. But over time, he recognized there was a flaw in that approach: Individual consumers can make choices only among what’s already on the market — but who decided what was on the market? Other, larger forces had shaped an economy dependent on fossil fuels, he realized — companies who developed the markets for fossil fuels and influenced decisions to build the infrastructure that supported them.
He asked himself: Shouldn’t the companies who profited from those decisions play a role in mitigating them? With world governments making little progress toward reducing emissions, perhaps pressuring the companies whose products were causing the harm might have more effect?
“With federal policy being unsupportive and still emphasizing continued energy development, I just thought it would be a new lever to look at the companies that have their hand on the tiller,” said Heede, who now lives in Colorado. “And pressure can be exerted in a number of ways.”
By 2013, roughly a decade after Heede began his search, he had his answer: Just 90 companies had contributed nearly two-thirds of the world’s industrial emissions. He could even pinpoint the share of those emissions for which companies existing today are responsible.
In effect, Heede had established a pillar of a new field of research, now known as attribution science. But it wasn’t just an academic exercise: It’s a weapon that climate campaigners are starting to wield to put fossil fuel companies on the hook for billions of dollars in damages. It’s a kind of end run around a political system they see as forced into gridlock by fossil fuel industry influence.
Heede and his collaborators are part of a paradigm shift in how to assign blame for climate change. For decades, as signs have grown that the planet is warming, the public and defenders of industry have laid the blame on end users, the ordinary people who drove their cars too much or blasted air conditioning in their homes. Those add up. But attribution science has the effect of moving the blame back one step, away from consumers and onto the companies that extracted the oil, coal and gas that have powered our planet for decades.
A gas flare from a petroleum refinery in Norco, Louisiana. Scientists have now analyzed all the carbon emissions from the Industrial Revolution until now and can calculate just how much can be attributed to individual fossil fuel companies. The breakthrough is being used by governments and other plaintiffs to sue oil and gas companies for the environmental damage caused by their products. | Drew Angerer/Getty Images
If blame can be attributed to corporations or governments, they believe, it can have two powerful effects: create a strong incentive for those companies to once and for all move away from fossil fuels, and unleash — through lawsuits — financial resources that could be used to seed new technologies and better prepare communities for the calamities climate change is expected to bring.
Attribution science is now about to receive a very real test in the courts, as cities, states and ordinary citizens across the world are using it to try to send fossil fuel companies the bill for climate change damage.
The first lawsuit over what fossil fuel companies revealed about the costs of climate change comes from the New York attorney general, who has accused Exxon Mobil of securities fraud. The suit alleges that Exxon used a different internal estimate for the cost that carbon-reduction policies would have on its business than it told investors; oral arguments for that case begin this week.
“I didn’t know that the legal interest would pick up so fast,” Heede said in an interview. “I didn’t know how this data was going to be used. But I knew that for any legal action — or, for that matter, shareholder pressure or regulatory pressure — we had to know who the companies were and what they contributed.”

Attribution Science
Attribution Science originated with the very legal question it might now be used to address.
In 2003, the science journal Nature published an article by Oxford University scientist Myles Allen titled “Liability for climate change.” Allen wondered aloud how to solve “the attribution problem” to demonstrate precisely how much burning fossil fuels were responsible for worsening climate-linked developments. If one could do that, he surmised, it would be possible to sue fossil fuel companies for damages.
A year later, Allen and colleagues Dáithí Stone, Peter Stott and Mark Hawkins published the first “extreme event attribution” study. Using computer models, they compared human-caused, post-Industrial Revolution emissions with scenarios lacking such emissions, known as natural variability. They concluded that man-made greenhouse gas emissions had more than doubled the likelihood of the deadly European heatwave of 2003, which killed 27,000 people. The analysis was straightforward and remains the bedrock of extreme event attribution science. In the years that followed, more severe weather patterns followed, including Superstorm Sandy on America’s Eastern Seaboard in 2012. Weather forecasters cited in media reports tended to be uncomfortable linking these events to climate change, often saying it was hard to connect individual weather events to an overall pattern of global warming. But the emerging attribution scientists didn’t agree. In 2015, Fredi Otto, acting director at the Environmental Change Institute at Oxford University, and Heidi Cullen, a climate scientist who is now at the Monterey Bay Aquarium Research Institute, formed the World Weather Attribution group with the goal of providing “rapid response” analysis of climate-fueled disasters. They wanted to show just how much human emissions had worsened those events or made them likelier to occur.
Homes on the New Jersey shore damaged by Superstorm Sandy in 2012. The storm was one of a number of extreme weather events that spurred researchers to develop a method to improve the attribution of extreme weather events to climate change. | Mike Groll/AP Photo
“We got pushback from the scientific community saying, ‘Well, actually this is way too fast. You can’t do science so fast, and the models are not good enough,’” said Otto, who did her postdoctorate work under Allen.
Skeptics have since mostly dissipated, though some remain. The Bulletin of the American Metereological Society began publishing annual event attribution analyses in 2011. Reruns of the World Weather Attribution analyses confirmed the group’s initial efforts. It helped that the National Academy of Sciences wrote a 2016 report on climate attribution science and identified World Weather Attribution’s methods as the gold standard. Last year, the European Union’s Copernicus Climate Change Service asked World Weather Attribution to write a road map to operationalize the science so it can better predict and respond to disasters; a prototype could launch this fall.
On top of that, computer modeling vastly improved, and quickly, permitting the volume and sophistication required for World Weather Attribution group’s mission. Michael Wehner, a scientist at Lawrence Berkeley National Laboratory, said he today could complete his study of the devastating 2013 Colorado floods in a matter of days, whereas the original study took his team three years. He has since expanded his work to hurricanes, finding that human-driven climate change boosted Hurricane Harvey’s August 2017 rainfall by as much as 38 percent.
“Read the papers. If you don’t believe the papers, then do your own,” Wehner said of attribution science critics. “This body of literature, which is now fairly large, clearly tells us that dangerous climate change is upon us, and people are suffering and dying — and it’s real, and it’s going to get worse.”
Some scientists aren’t yet ready to fully embrace extreme event attribution science. The reinsurance industry, which covers megalosses in the event primary insurers can’t foot the bill, contends other factors like building codes and zoning decisions contribute a great deal to the overall financial toll from major disasters.
“We follow the science very closely. We try to understand what this actually means to the risk which we are taking. But when it really comes down to attribution of certain events to climate change, our view is that this piece of science is at an early stage,” said Ernst Rauch, chief climate scientist and global head of climate and public sector business development with Munich Re, a reinsurance company.
Even the National Academy of Sciences in its 2016 report sounded a cautionary note. Finding the precise climate fingerprint for events with nonmeteorological factors, such as drought and wildfire, can be challenging. Events backed up by robust observational records with well-understood physical effects, like long-term temperature increases, are most scientifically sound.
“The ability to attribute the causes of some extreme event types has advanced rapidly since the emergence of event attribution science a little more than a decade ago, while attribution of other event types remains challenging,” the report said.
For any potential uncertainty about climate attribution, Heede said there’s at least one definite truth about fossil fuel companies that should override the rest.
“They were aware decades ago what trouble climate change would be,” he said.
A stranded traveler resting in London’s St. Pancras rail station this summer. Extreme heat damaged overhead power lines, interrupting transport across Europe. | Leon Neal/Getty Images


Climate Science Community
While the climate science community was initially cautious about attribution science, lawyers were immediately intrigued.
“I think they recognized that it was a bit of a game-changer,” said Cullen, the climate scientist.
The two scientific breakthroughs – the ability to link global warming to the intensity of storms, rising sea levels and worsening heatwaves combined with the ability to trace historical emissions to individual companies dating back to the Industrial Revolution -- have laid the legal groundwork for a string of lawsuits getting underway in coming months.
“We can actually close this causal chain now,” said the Environmental Change Institute’s Otto . “If the first judge has the guts to actually accept such a claim and give a verdict against a big polluter, then that will force these companies to change their business models.”
So far, 13 state and local governments have filed lawsuits against oil and gas companies like Exxon Mobil, BP and ConocoPhillips, including the cities of New York, Baltimore, Oakland, San Francisco and Richmond; Imperial Beach and Santa Cruz, Calif.; the counties of Marin, San Mateo and Santa Cruz, Calif.; King (Wash.) and Boulder (Colo.); and the state of Rhode Island. Another lawsuit by Pacific Coast fishermen against Chevron also seeks climate damages.
The cases face long odds. The legal arguments and the science are largely untested in the context of suing individual companies for the complicated effects of and myriad sources driving global climate change.
“It is very difficult to see how there can be a specific nexus between the conduct of these defendants and any of the adaptations and other costs that these municipalities are incurring,” said Brendan Collins, an environmental attorney at Ballard Spahr LLP who is not involved in the cases.
It’s not the first time plaintiffs have sought climate change damages from energy companies.
Fossil fuel companies have successfully swatted away past cases, all of which have been federal, in part because the courts say Congress has responsibility for regulating greenhouse gas emissions, but Congress hasn’t yet amended the 1990 Clean Air Act to incorporate concerns about climate change. So, climate cases get stuck.
The novel legal innovation this time is that plaintiffs are aiming to sue in state courts. States have common law provisions that allow for claims under two legal theories: public nuisance, that a party is interfering with the rights of citizens, or product liability, that the dangers of using a product must be communicated to the public. Plaintiffs are trying to make the case that energy companies that extract, transport or market fuels are a public nuisance because they are destroying their residents’ enjoyment of a stable climate and forcing costs on them. Under product liability, plaintiffs are arguing that the companies pushed those products into the market knowing these probable, damaging outcomes.
An overwhelmed surge barrier near New Orleans. Sea level rise is among the changes that attribution scientists are now able to link to carbon emissions. | Drew Angerer/Getty Images
The lawsuits have caught the attention of business groups like the U.S. Chamber of Commerce, which penned two white papers outlining the threats to corporations presented by public nuisance lawsuits in nonfederal courts. But the courts have so far rebuffed fossil fuel companies’ attempts to punt the cases to federal jurisdiction.
The lawsuits aren’t all the same. Some cities are suing over past and future costs to defend against sea level rise; fishermen want compensation for harming a West Coast crab fishery; suits filed on behalf of children contend fossil fuel companies deprived future generations’ quality of life by driving climate change. Most of the lawsuits argue that fossil fuel companies marketed a product they knew to be harmful without acknowledging — and, in fact, sowing doubt and confusion about — those harms.
Plaintiffs see a parallel to the tobacco industry. That industry fell victim to product liability lawsuits because companies knew their product caused harm but misled the public. More contemporary examples of successful lawsuits include a case against Monsanto for cancer linked to its weed-killer, Roundup, and action against pharmaceutical companies for distributing opioids despite known risks and abuse.
Fossil fuel companies have argued that they had no control over how their product was used after selling it — it’s people who put gasoline in their cars, not Exxon Mobil. They are also expected to argue that all levels of government have cemented fossil fuels’ place in American society through tax incentives, infrastructure spending and other policies. That is the crux of what the companies argued in a federal case in the U.S. District Court for the Northern District of California brought in 2017 by the cities of Oakland and San Francisco.
“Plaintiffs do not assert that the mere extraction or sale of fossil fuels created the alleged nuisance (nor could they), but rather that the combustion of fossil fuels by third-party users — such as Plaintiffs themselves — causes global warming and rising seas,” attorneys for BP, Chevron, ConocoPhillips, Exxon Mobil and Shell wrote in a March 2018 motion to dismiss.
The federal case ultimately was dismissed, but Oakland and San Francisco are appealing.
“They will try to claim the harm from their product is not at all their responsibility,” said Peter Frumhoff, science director with the Union of Concerned Scientists, who helped develop the framework for using climate attribution science in the courts. “It’s always somebody else, isn’t it?”
The American Petroleum Institute spokesperson Reid Porter said the oil and gas trade association would not comment on pending litigation.
“The natural gas and oil industry is actively addressing the complex global challenge of climate change, investing in cutting edge technologies, efficiency improvements, and cleaner fuels,” he said in an email.
Climate protesters in Bonn, Germany. Anti-corporate sentiment is growing among electorates both in the United States and overseas. | Maja Hitij/Getty Images
While the novel legal arguments might face an uphill battle, they’re already affecting the court of public opinion — and in that venue, the plaintiffs seem to be winning. The idea of prosecuting companies has gained currency among Democratic presidential candidates. Much like the fight against pharmaceutical companies that knowingly pushed opioids on American consumers, the push against fossil fuel companies resonates with anti-corporate zeal sweeping voters in both parties.
The political atmosphere is also far more partisan than the major environmental courtroom victories of decades ago, and climate change is firmly ensconced in the U.S. culture wars, noted Durwood Zaelke, founder and president of the Institute for Governance & Sustainable Development. Zaelke’s organization started the Center for Climate Integrity, which is aiding the civil climate lawsuits.
But shifts are occurring beneath the surface, Zaelke said. Investors are prodding companies into action on climate, with companies like BP agreeing to develop a strategy to survive as a business under policies designed to keep global temperatures from rising 2 degrees Celsius. Republicans are no longer debating whether humans are baking the planet, even going as far as to offer policy solutions. Young activists have put climate change front and center on the global agenda.
Events and public opinion are trending in the right direction, Zaelke said. But it will still take an enormous leap for a breakthrough. He thinks climate attribution and the courts could provide the needed boost.
“I’m in a pretty optimistic mood right now believing these strands can come together,” Zaelke said. “We all have a chance to be a little more heroic when circumstances demand, and that’s where we are — circumstances demand more heroism from the lawyers, the youth, the judges.”

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