11 March 2016

Beware the "fat tail": Climate risk and scientific reticence

by David Spratt

How should we respond to climate change, avoid catastrophe and get back to safer conditions?  The question is often posed in "risk-management" terms, but what does than mean in assessing the risks associated with climate change, the possible impacts and the speed of action required?

We have historically tended to underestimate the rate of climate change impacts.

Too often policy is based on consensus scientific projections that downplay what Prof. Ross Garnaut called the “bad possibilities”, that is, the relatively low-probability outcomes that have very high impacts. These events may be more likely than is often assumed, as Prof. Michael E. Mann explained in reviewing Climate Shock: The Economic Consequences of a Hotter Planet:

One of the most under-appreciated aspects of the climate change problem is the so-called "fat tail" of risk. In short, the likelihood of very large impacts is greater than we would expect under typical statistical assumptions… There is… a greater likelihood of warming that is well in excess of the average amount of warming predicted by climate models… This is further compounded by the fact that the damages caused by climate change — i.e. the consequence — also increases dramatically with warming. That further increases the associated risk. With additional warming comes the increased likelihood that we exceed certain "tipping points", such as the melting of large parts of the Greenland and Antarctic ice sheet and the associated massive rise in sea level that would produce.
Figure 1: Climate change "fat tail" risks
This “fat tail” risk is illustrated in Figure 1, where a greenhouse concentration may have a most likely outcome of ~3°C of warming, but a greater than 10% risk of warming of greater than 6°C.

In his 2011 climate science update for the Australian Government, Garnaut questioned whether climate research had a conservative "systematic bias".

He wondered if most of the new knowledge either “confirms the established (climate) science or changes it for the worse”, but rarely finds a need to lower the magnitude of the threat, is due to “scholarly reticence". Garnaut pointed to a pattern across diverse intellectual fields of research predictions being "not too far away from the mainstream" expectations and observed that in the climate field that this "has been associated with understatement of the risks".

With masterly restraint, he concluded that we should be:
alert to the possibility that the reputable science in future will suggest that it is in Australians’ and humanity’s interests to take much stronger and much more urgent action on climate change than might seem warranted from today’s peer-reviewed published literature. We have to be ready to adjust expectations and policy in response to changes in the wisdom from the mainstream science.
More than once, I have been criticized for presenting climate science that is not the “consensus”, middle-of-the-road version we find in the work, for example, of the IPCC. Such charges were made against Climate Code Red, a book I co-wrote seven years ago. But the evolution of climate warming since publication shows that book was not wide of the mark, because “the worst” it discussed on many key issues has turned out to be our bitter harvest

One climate expert who reviewed a draft of a recent presentation of mine said it reflected most of the recent climate system insights correctly, although it leant toward the more “pessimistic perceptions”.

This is exactly what sensible risk management requires us to do: as with a bushfire, a flood, a plane malfunction or any other potential disaster, it is prudent to plan for the worst that can happen, and be pleasantly surprised if it doesn’t. To hope and plan only for “middle-of-the-road” outcomes is foolish, because then the worst will overwhelm. The latter is a good characterisation of most climate policy-making, including in Australia.

The latest scientific evidence demonstrates that climate change is happening faster and more extensively than the political and corporate elites are prepared to admit. The Australian Climate Council reports: "Changes in the climate system are occurring more rapidly than previously projected, with larger and more damaging impacts now observed at lower temperatures than previously estimated".

Current climate trends, if not arrested rapidly, will likely lead to a substantial reduction in global population, with attendant mass social conflict and migration, early signs of which are already evident in the Middle East and North Africa.

Figure 2: Rainfall anomaly 1971-2010 compared to 1902-2010
The Syrian conflict was preceded by the worst long-term drought and crop failures since civilisation began in the region, resulting in 800,000 people losing their livelihoods by 2009, and 2–3 million being driven into extreme poverty. The eastern Mediterranean has experienced significant deceases in winter rainfall over the past four decades, as illustrated in Figure 2.

Australia, as the driest continent on Earth, is more exposed than most to new climate extremes.

We need a hard-nosed assessment of the real risks and consequences to which we are exposed. Catastrophic and irreversible consequences caused by 2-degree Celsius (°C) of warming demand a strong risk-management approach, yet we find policymakers focused on "middle of the road" outcomes and carbon budgets, and turning a collective blind eye to "high-end" possibilities that are much more likely to occur than is widely acknowledged.

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