Understanding Climate Risk

Human-induced climate change contains high risk and large uncertainties. The current policy approach has two main weaknesses:

1. It treats climate change as a long-term equilibrium problem by building fixed mitigation pathways to an uncertain outcome (climate stabilisation preventing dangerous climate change).
2. It is designed to provide greater certainty to those affected by policy actions in the short-term, at the expense of achieving those long-term goals.

This project seeks to manage this impasse by integrating an understanding of climate and policy risks. It is building a set of dynamic methods for implementing adaptation and mitigation by applying:

• what we know now,
• what we may learn from taking action and
• new research findings as they come to light.

In particular, policy and planning decisions can be tested as to whether or not they are sensitive to particular knowledge gaps.

Currently, the scientific process of developing new scenarios, running those through climate models and assessing the potential impacts, including those of policy is a multi-year operation. Policy needs are evolving much faster than this, requiring updated information with a faster turnaround. Policy options also need to be tested within a flexible framework.

This project is building a rapid assessment tool that is capable of incorporating new information very quickly. This includes the capacity to build new emission scenarios based on a range of policy options, to assess likely temperatures and link those to a library of risk functions to assess the benefits of climate policy. All relationships are based on the outputs of scientific models and uncertainties are assessed for their likely impact on decision-making. The hedging of adaptation and mitigation in a policy setting is also being incorporated.

Project researchers are also developing strategies for adaptation to climate change at the regional and sectoral level, energy modelling, mitigation strategies for sectors and regions, and research into co-benefits of policy for managing climate risks in a range of sectors.

This project builds in an earlier project Climate Change, Industrial Structure and the Knowledge Economy funded by an ARC Linkage Grant LP0214957. 

Project personnel

• Peter Sheehan—greenhouse gas emissions, economics, industry and the knowledge economy
• Roger Jones—climate change risks, integrated assessment, mitigation and adaptation strategies
• Brantley Liddle—energy demand modeling, demography and environment, energy intensity change/convergence
• Alex English—industry development, technology transfer, economies in Asia
• Steven Parker—biofuels, methane, agricultural modelling

Previous project

The project Climate Change, Industrial Structure and the Knowledge Economy examined the impact of various features of the knowledge economy – changing industrial structure, globalization and the rise of countries such as China and India, and the creation and diffusion of new technologies – on global energy use and the climate. The project is also giving increasing attention to policy responses to avoid serious climate change given the rapid growth in CO₂ emissions that is occurring at the present time.

Click here for the Final Report Climate Change, Industrial Structure and the Knowledge Economy: Key Issues for an Effective Response on Greenhouse Gases (2006).

Detailed results are contained in the Centre's Climate Change Working Paper Series.

A collaboration between the Centre and CSIRO explored the impact of these increased emissions and emissions in a risk management framework. The results were published in the journal Global Environmental Change