Master Images Slides 2

Why A Roadmap for Under-Estimating Climate Risks?

The importance of regularly testing one’s assumptions when it comes to risk management is well understood, particularly in business circles. In the case of climate change it’s particularly critical because there are so many uncertainties surrounding potential climate futures, and uncertainty creates risk.

You might think that everyone, including business decision-makers, has been talking about climate risks non-stop for the last couple of years. That may be, but if climate risks are being significantly under-estimated despite all of that talk, the steps being with undertaken with the goal of managing those risks may not only be too little, too late, but may be fundamentally misguided.

There is a lot of evidence to suggest that from the Intergovernmental Panel on Climate Change on down, many if not most climate risk assessments today are downplaying or entirely missing potentially important sources of climate risk. That’s not actually surprising given the characteristics of climate change, in particular how fast relevant variables are shifting, as well as human nature when it comes to perceiving and responding such risks. Some of the key variables likely to result in under-estimating climate risks include:

  • Climate Change Probability Distributions Are Long-Tailed/Fat-Tailed
  • Climate Change Probability Distributions Are Actively Shifting
  • Climate Change Itself May be Accelerating
  • Tipping Points Are Largely Absent from Climate Risk Assessments
  • Systemic Climate Risks Are Under-Valued
  • Climate Models Are Commonly Risk-Neutral as Opposed to Risk-Adverse
  • We Mistakenly Pay More Attention to What We Can Measure Than What We Can’t

Based on these variables, it is quite possible that in many cases societal and business climate risk assessments are missing a substantial fraction of, if not the majority of, climate risk. In making this statement we are not suggesting we are better able to predict the future than anyone else, and we’re not saying that all of the outcomes discussed here will come to pass in conventionally business-relevant time frames, or should be considered material in business decision-making. But we are suggesting that if these and other variables are being downplayed in or are missing altogether from risk assessments, A LOT of climate risk might be unaccounted for. And that’s a problem.

If you have not already accessed https://underestimatedrisk.climatesites.net we would encourage you to do so. It contains overview videos that will introduce you to the topic of under-estimating climate risk, and to coverage of the topic in the Climate Web. This Topical Roadmap in effect is Step #3 in exploring this topic by leveraging the Climate Web. Note that there is also a PDF version of this Topical Roadmap available through our website. The primary advantage of this web-based Tropical Roadmap is our ability to utilize GIFs. As you’ll see below, that means fewer links into the Climate Web itself.

In organizing this Roadmap we’re not trying to predict the future, but we are trying to apply the principles of risk assessment and management to the topic of climate change in a way that you may not have seen before. If you accept that it’s important to reassess your climate risks, how should you proceed, and how can the Climate Web help? There’s more information on that at the end of this Roadmap.

Introduction to Topical Roadmaps

The Climatographers have spent more than 20,000 hours building the Climate Web as a knowledge solution for tackling climate change, organizing tens of thousands of relevant resources including:

  • Insights pages (500+)
  • Books (1,000+)
  • Reports (7,500+)
  • Journal articles (4,000+)
  • PowerPoints (500+)
  • News stories and blogs (25,000+)
  • Videos (3,000+)
  • Extracted graphics, slides, ideas (5,000+)
  • Websites and web pages (4,000+)
  • Topical experts (2,000+)
  • Wikipedia pages (500+)
  • Quora.com Q&A (750+)
  • Quotes (500+)
  • Cartoons (500+)
  • Infographics (250+)
  • and more

Note that everything in the Climate Web, including all the resources listed just above, take the form of what’s called “thoughts,” and we’ll use that term in this Roadmap. The Climate Web’s more than 100,000 thoughts are organized by more than 3,500 Index Entries and thousands of topical headings in order to facilitate access to user-specific actionable climate knowledge, and to promote cross-silo exploration and understanding. We use color coding and thought icons to help you quickly identify what kind of information you’re looking at at any given time, as illustrated in this Key.


The Climate Web is Open Access, and TheBrain software with which it is built is simple to use. Nevertheless, the Climate Web’s scope and depth can be daunting. Topical Roadmaps link you directly to resources you can use to explore a particular topic or question. Because every thought in the Climate Web has its own URL, it’s possible to link directly to literally anything in the Climate Web. You’ll see lots of links below that you can click on.

Topical Roadmaps short-circuit the need to spend a lot of time figuring out where everything is in the Climate Web, or to sort through what might be thousands of thoughts relevant to a topic as large, for example, as carbon pricing. Topical Roadmaps significantly accelerate your use of the Climate Web.

In the case of Open Access (on-line), being pointed to specific thoughts by a Topical Roadmap can help you overcome both speed and functionality limitations of the cloud-based version of TheBrain software. Note that Topical Roadmap links take you into the Climate Web, even if then pointing you to a website URL that we could have linked to directly. That’s because we know that other Climate Web thoughts in the immediate vicinity of a thought we’ve specifically flagged, might also turn out to be of particular interest to a user. Topical Roadmaps do not attempt to include and link users to every relevant thought in the Climate Web, since it’s relatively easy for users to explore thoughts near to one being pointed-to.

In the case of Premium Access (download the Climate Web), a Topical Roadmap can still significantly accelerate your exploration of a topic, even though Premium Access is already much faster and more powerful to use than TheBrain’s cloud-based software.

Topical Roadmaps are not prose-intensive since they are not trying to duplicate content already in the Climate Web, e.g. in the hundreds of Insights Pages authored by the Climatographers. Linking you to those pages means that you’ll automatically access the most recent improvements to the pages, regardless of the date of your Topical Roadmap. Topical Roadmaps also don’t tackle enormous topics like “carbon pricing” or “carbon offsets” all at once, instead zeroing in on sub-topics of common interest, e.g. “Carbon Pricing for 2o C,” or “Carbon Offset Critiques.”

If you have heard reference to Topical Dashboards in the Climate Web, here’s the relationship between Dashboards and Roadmaps.

  • Dashboards in the Climate Web use “tags” to pull together and organize resources on all kinds of topics. Tags represent a non-physical way of linking thoughts, but that also makes them a bit ethereal. Dashboards are very useful if you’ve downloaded the Climate Web and are accessing it via TheBrain’s desktop software. Unfortunately, “Tagged collections” are difficult to utilize in the cloud, and so we don’t suggest using Dashboards when accessing the Climate Web on-line.

  • Topical Roadmaps can have a lot in common with Dashboards in terms of the content being organized. The difference is that Roadmaps point you to specific thoughts and explain in advance what you’re going to find there. That’s why even Premium Access users can benefit from Topical Roadmaps as compared to Dashboards.

Our Two Introductory Videos

Underestimating climate risk - an overview


A short (6.5 min) topical overview video
click on image above or available here.




Topic Video - Underestimating Climate Change

A short (8 min) video introducing you to some of the Climate Web’s most relevant topical resources for digging into climate risks.
Click on image above or available here.


Under-Estimating Climate Risks Topical Roadmap

For purposes of this Topical Roadmap we’re going to use the following definition of risk:

Risk = Probability x Consequence

Risk is a fascinating topic, and we’ve assembled a GIF of quotes from risk experts that can help set the stage for thinking about under-estimating climate risks. Note the focus on the less probable over the more probable in assessing risk.

Characterizing Risk GIF

The next GIF starts off with former Secretary of Defense Donald Rumsfeld’ss famous quote, and then gets into a series of quotes having to do with the fact that, for better or worse, we face real psychological challenges when it comes to grappling with known unknowns, much less unknown unknowns!

We Downplay Uncertainty GIF

Long-Tail and Fat-Tail Probability Distributions

The relevant definition of risk for our purposes is “Risk = Consequence x Probability.” We’ve visualized a climate consequences probability distribution below. Don’t get too hung up on the precise shape of the probability distribution; what’s important is that the distribution can be split into two parts: expected risks (higher probability, lower consequence), and fat-tail or long-tail risks (lower probability, higher consequence) outcomes. Note that this is NOT a climate risk probability distribution, since risks (probability x consequence) will tend to rise rapidly as you move farther out on the consequences axis toward “black swan” events.

Underestimatedrisk2

The problem in under-estimating climate risks often comes from focusing primarily on the “expected risk” part of the probability distribution, and much less so on the “grey rhino” and “black swan” parts of the distribution. As you can see from the slide shown here, there are many grey-rhino variables that could be missed by focusing on “expected risks.” And that’s without even trying to identify some of the black swan risks.

Underestimatedrisk2


There are a number of reports in particular that to a good job of exploring long-tailed risk issues. Through the links below you can access the reports themselves, as well as a small number of key extracted ideas and graphics. These are by no means the only particularly relevant materials in the Climate Web, and we welcome suggestions for others we should highlight via this roadmap.

Each of the GIFs below pull together selected extracts from a key report, linked to below the GIF. All the extracts for each report (and in some cases quite a few more) are available through the link just below the GIF if you want to explore them more systematically. Obviously the literature relevant to under-estimating climate risk is far larger than reflected in these GIFs, and we’ll continue to add materials to this page.

Disaster Alley GIF

2017 Dunlop_Disaster Alley Climate Change Conflict and Risk






2018 Spratt White Lies Beneath GIF

2018 Spratt_What Lies Beneath - the Understatement of Existential Climate Risk





2019 Spratt Existential GIF

2019 Spratt_Existential climate-related security risk A scenario approach



Other very relevant reports and papers include:

In this Topical Roadmap now we’ll dig deeper into relevant Climate Web resources through the story and links organized below.

There are a bunch of psychological and other reasons we tend to focus on “expected risk,” and some key parts of the relevant literature are listed below (with links into the Climate Web), with some extracted thoughts below that.

Changing Probability Distributions I:ChangingProbabilityDistributions

The Roadmap so far on the fact that we have been neglecting a lot of if not most of the overall climate risk by focusing on the “expected” portion of the climate change probability distribution. Compounding that problem, however, is the reality that the climate change probability distribution is also shifting due to climate change.

Accelerating Climate Change and Tipping Points I:AcceleratingClimateChange I:ClimateTippingPoints

Some of these variables aren’t even factored into most climate models upon with climate risk assessments are based. Climate change tipping points, for example, are generally not factored into climate models because scientists don’t know enough about their “when” and “how.” But the likelihood of triggering such tipping points is increasing as climate change progresses, and will increase further if climate change is in fact accelerating.

Slide14

Further compounding the problem of under-estimated climate risks is the apparent acceleration of climate change itself.

Systemic Climate Risk I:SystemicClimateRisk (Deep Dive)

Another commonly under-valued risk variables is “systemic climate risk.” Systemic risk used to be a term of art in the financial sector, but it is increasingly being recognized that climate change could trigger systemic risk events in its own right, from global food shortages to pandemics and even global conflict. Systemic climate risks are key because they can’t be managed through conventional business risk management tools, e.g. diversification and resilience, and are arguably becoming the risk elephant in the room.

Slide15

Systemic risk is relatively new to the climate change conversation, although not to the financial sector generally. Why the idea of systemic risk should be applied to climate change To the extent that systemic risks are under-weighted or ignored in societal and business decision-making, it’s a significant source of under-estimated risk. And because the systemic risk conversation is so new, it’s safe to say that it is not well factored into risk assessments and decision-making.

Risk Adversity I:RiskAdversity

The variables introduces previously in this Topical Roadmap focus on the actual consequences associated with the long- or fat-tail of the risk distribution. This variable focuses on the psychology of how we perceive climate risks, and the fact that we tend to underweight risky futures in our decision-making.

  • First, it’s important to recognize just how much uncertainty exists with respect to future climate change outcomes, and that most of that uncertainty is associated with the “more than expected” side of the probability distribution.

  • You can explore the topics of known unknowns and unknowns in the Climate Web, including through this collection of sources S - Climate Uncertainties Unknowns as well as a couple Insights Pages that pull together relevant thinking. Climate Known Unknowns Climate Unknown Unknowns

  • The consequences of climate change are potentially so severe Why a "risk averse response?" that the absence of a substantial risk response on the part of societal decision-makers could be seen as surprising. But a lot of work has gone into understanding the reasons Why AREN'T we responding in a risk averse manner?

  • It doesn’t help that we We are over-confident in predicting the future, which is one of the things that is contributing to our under-estimation of climate risks. Nor does it help that we tend to Discount the Future so severely.

  • One of the best examples of our failure to think risk-adversely involves sea level rise. How should you interpret prevailing seal level rise forecasts? Interpreting Sea Level Rise Risk

  • What would a risk-adverse response to climate change look like? That’s an enormous topic in its own right, but we can explore one slice of the question of risk-neutral vs. risk-adverse framing via the Social Cost of Carbon. A Risk Averse SCC

To Rethink Climate Risks

The Climate Web is structured to support climate risk assessment and re-assessment in a number of ways:

  • Climate Assumptions Audits help you identify and challenge assumptions that may characterize organizational thinking around climate topics.

  • Business Premortems are a story-telling technique that can help open up decision-makers’ minds to futures that they may not have thought about.

  • Scenario Planning for climate change is critical, and should often encompass a significantly wider range of outcomes that a lot of scenario planning does today. The Climate Web is specifically structured to support sector and company-appropriate scenario planning.

You can utilize the Climate Web on your own, or the Climatographers can help you utilize it Web via customized briefings and Roadmaps, and even Ebooks based on Climate Web content. We can help you take instant advantage of thousands of hours of analysis and knowledge curation across not only the topics covered in this Roadmap, but hundreds of others.

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