Climate Change Risk: What is all the fuss?
Stephen J. Tonna
Author & Head of Risk Modeling and Model Governance, Asia Pacific at SAS
As I sit quite solitary in my studio room during what is now the sixth- and fingers crossed very last- lockdown here in my State of Victoria my mind has been turning towards better understanding climate change and associated risks.
What is all the fuss about, really? Took this sixth wave of solitary confinement to reflect on that question, taking a more scientific-based approach. This requires a mindset where one looks over historical data and observation data, builds questions, and starts to formulate one's own hypothesis. Left it at the hypothesis stage for this article.
Here is what I found...
?
Base level- the amount of air pollution is geographic dependent
It is remarkable that air pollutants including methane, black carbon, or soot are part of fine particulate air?pollution (PM2.5), ground-level ozone and sulfate aerosols created mostly by CO2 emissions from extraction and burning of fossil fuels (Centers for Disease Control and Prevention, 2021) have been continually released into the atmosphere at higher than natural levels since the Industrial revolution.
Today, climate change experts better understood that the blankets of pollutants contribute to climate change based on their ability to reflect or absorb incoming sunlight. Classes of pollutants are associated with warming the earth and others with cooling (United States Environment Protection Agency, 2020).
However, when we discuss the impacts of the pollutants created by CO2 emissions on climate change (Australian Government- Department of Agriculture, Water and the Environment, 2019) and on environmental and human health, discussion tends to hover around the macro level of a country and rarely narrows down to past and immediate impacts on the community at the ZIP code level; either singular or aggregated as municipalities. Keen to explore this more and will discuss it next.
?
Understanding human health impacts of polluting facilities needs a balanced approach
And this is what struck me the most. High-density residential housing and commercial properties can be <1km from oil refineries and petrochemical factories that have continually emitted air pollutants for decades and at times a generation. However, what must be appreciated here is that this is not done on purpose. Polluting facilities are critical to economies all over the world and society needs them to produce energy demands to fuel transportation needs and supply reagents critical to manufacturing production. To serve both the demand and need, facilities have often been set up decades ago and in areas with large mineral resources including coal, gas, gravel, and water, and originally free of residential housing and commercial properties.
To start understanding the possible human health impacts of polluting facilities, I found a study that proved that the amount of air pollution in ZIP codes is significantly higher in ZIP codes with a polluting facility than in ZIP codes without one (Hermant & Clark, 2018). Table 1 provides the representative study: the more polluting facilities there are, the higher the average total emissions in the air(kg):
I next performed an analysis of past studies that had taken a meta-analysis approach on the longer-term impacts on human health caused by Polluting Facilities and other factors- these are defined below:
·????????Polluting Facilities
o??Oil refineries and petrochemical factories
?
·????????Infrastructure
o??Transport links that act to funnel many types of diesel-fueled vehicles
?
·????????Land
o??Unsealed open land that creates dust
Before I share examples, you may be wondering what a meta-analysis is? This is a statistical analysis performed by an independent team of analysts that combines the output results of hundred to at times thousands of studies that have examined the same question. Here, the questions have been those concerned with the human health impacts and causes mentioned earlier.
The findings from key meta-analysis publications are below:
·????????Poor air quality associated with increased still-birth (Zhang, 2021) and other adverse pregnancy outcomes including, but not limited to, preterm birth and low-birth-weight (Simoncic, 2020)
·????????Ambient air pollution contributes to premature deaths that can be a yearly number that is at least two times the number of lives lost due to road fatalities in some countries (Environmental Justice Australia, 2020)
·????????PM2.5 increase in the air is associated with respiratory disease including chronic obstructive pulmonary disease (Park, et al., 2021)
·????????Long-term exposure to increased PM2.5 is associated with a higher risk of cardiovascular disease including myocardial infarction (Zhu, et al., 2021) and mental health problems including depression and suicide (Liu, et al., 2021)
·????????Exposure to PM2.5 and PM10 significantly increases the risk of type 2 diabetes in the long term (Yang, et al., 2020)
Despite the sound scientific data, the literature is recently starting to supply clear and simple explanations that risks of air pollutants may have on human health to the municipalities that represent people as residents, businesses, and industries (Hermant & Clark, 2018). To be more balanced again, many polluting facilities have well-defined and executed social responsibility policies that often concentrate on supporting community programs that run initiatives to minimize impacts on the environment.
What about Climate Change?
Next up was climate change.
Arguments abound on climate change and whether it really exists and is indeed a ‘crisis. This article does not seek to drive opinion in one way or another, but as explained earlier focuses on accepted data and use cases, scientific-based literature. Also explained earlier, CO2 emissions from extraction and burning of fossil fuels create air pollutants like black carbon or soot that is part of fine particulate air?pollution (PM2.5) have affected both human health and the climate (Centers for Disease Control and Prevention, 2021). More specifically to climate change, polluting facilities that process and distribute fossil fuels increase the levels of greenhouse gases in the atmosphere with the main culprits being CO2 and other pollutants such as methane but also nitrous oxide and fluorinated gases (Stocker, 2013). These facilities create 80% of CO2 and 30% of methane pollution (Kelly, 2019). In addition to polluting facilities, drilling for oil releases CO2 into the atmosphere. Accumulated evidence over decades has suggested other potential causes of climatic change due to human activities such as natural gas drilling, transportation, farming, deforestation, and fertilizers (Denchak, 2017).
When we think of climate change, our minds tend to focus on global warming caused by human activities, due to the well-published association between greenhouse gas emissions, and the average rise in earth temperature that has increased by 1 degree Fahrenheit during the 20th century?(Denchak, 2017). More dramatically, since 1975 the earth's average temperature has risen by 2.7-to-2.3-degree Fahrenheit or 1.5 to 1.8 degrees Celsius (AZoCleantech, 2008).
However, climate change is more than global warming, and the literature defines it as “a significant variation of average weather conditions;” like becoming warmer, wetter, or drier over decades or more (Denchak, 2017). Classes of pollutants are associated with warming the earth and others cooling (United States Environment Protection Agency, 2020). It is important to note that the longer-term trend differentiates climate change from natural weather variability. Other impacts of human activity on the climate range from the following:
·????????Temperature oscillations between hot and cold.
o??The best most recent example is the extreme heat and long-term dry conditions that contributed to the unprecedented bushfires in Australia in 2019-2020 that burned through forty-six million hectares (72,000 square miles (about twice the area of South Carolina)) (Burgess, et al., 2020). On the climate front, there is no doubt here that climate is associated with the occurrence of the fires; 2019 was the warmest year recorded since the temperature started.
o??Ice formation and heavy snowstorms
·????????Landfills of garbage release methane and nitrous oxide as it breaks down
·????????Erosion along coastal regions and watercourses due to increased precipitation such as pore pressure and groundwater levels
·????????Floods and high-water flow due to the expansion of the human settlement and construction of infrastructure
There are also natural causes of climate change such as Volcanic eruptions, variation in solar radiation, the movement of crustal plates, and oscillation of the ocean and atmospheric system under El Nino-Southern Oscillation (ENSO) (Climate Science Investigations, 2016).
?
So, what is all the fuss?
A global group of 11,000 scientists has endorsed 40 years of research on a range of measures that support the hypothesis that the world is now facing a climate emergency (Ripple, et al., 2020). Research (Ripple, et al., 2020; Schwalm, 2021) suggests that:
·????????Twenty years from now, heavily populated parts of South Asia will have lethal heatwaves greater or equal to 34°C most years.
·????????The Sahara Desert will cross the Mediterranean Sea by 2030. This will mean that a “squeezing” will occur where the heavily populated coast of Africa will be between the desert and the rising sea levels. The probability of this event is 0% at present but will rise to 75% by 2050 on the Indian Pakistan border. Five hundred million people will be displaced by the change.
·????????Flammability of the amazon will increase significantly based on modeling of the change in historic fire season length between 2021- 2050 using 1971- 2000 as the base of comparison.
领英推荐
·????????The coasts of China, Japan, and Korea will experience an increased frequency of what would have been rare rain events such as typhoons. Later in the century, systemic floods will then present a large issue.
Irrespective of the cause, we need to appreciate that we as a human civilization survive on a stable climate and that the world is now accelerating into instability based on the increased frequency of extreme weather events. These extreme weather events are climate change events, and studies have shown socioeconomic impacts and hazards. The impacts are dramatic in terms of both losses of human life. As examples:
·????????The 2010 Russian heatwave killed 55,000 people. Here, the heatwave was 3x more likely due to global climate change.
·????????Hurricane Harvey cost $125 billion (about $380 per person in the US (United States) in 2017.
So, what are we to do? Well, since 1992, the United Nations has recognized that changes to the global climate patterns and those at a regional level, due mostly to CO2 emissions from fossil fuels pose serious issues to the world (The United Nations, 2020). The recognition has created notable accords in negotiation with participating countries. However, due to many reasons countries have either struggled to reach agreed emissions targets or failed completely. Below is a listing of the talks and accords in Table 2:
The Paris Agreement/ accord target is for a net increase in the global temperature limited between 1.5 degrees Celsius - 2 degrees Celsius by 2100 to limit the dangerous impacts of climate change. To reach agreed emissions targets for participating countries in the Paris Agreement, there are two ways:
·????????First is to reduce the number of emissions from polluting facilities over time and,
·????????Second, and more drastic action, is to impose an elimination strategy by either forced or naturally attrition of facilities and emissions with the aim to replace fossil fuel production with green alternatives for energy production.
A final concluding note on the accords. Scientific evidence on climate change, including the impacts of climate change, has directed them over the past 28 years. The Paris Agreement accord is no exception.
?
Concluding findings and remarks
Let us bring this back to the scientific method mentioned earlier:
·????????From historical and observation data, we are more than likely now accelerating towards climatic instability: the change is irreversible, there is no more stable climate.
?
·????????What does this mean? As mentioned earlier, since 1975 the earth's average temperature has risen by 1.5 degrees Celsius- 1.8 degrees Celsius (AZoCleantech, 2008). There are also significant potential impacts on the environment and human civilization of further rises in the earth’s temperature. For example:
o??a rise of >5 degrees Celsius is a mass extinction event of >95% of the species on the planet
o a <2 degrees Celsius increase in temperature the impacts are still significant like; flooding caused by a 0.3m- 0.8m increase in sea level and 17%- 36% frequency in extreme rainfall, and 1.4x- 1.6x increase in wildfire extent (McDonnell, 2019).
Based on the instability of the climate and availably research, all countries that take part in the Paris Accord will not all reach their targets, meaning that a 3 degrees Celsius -4 degrees Celsius warming is more likely by 2100. A plot of the probability of temperature increases in range 0 degrees Celsius-6 degree Celsius by 2100 by association with Representative Concentration Pathway (RCP) shows the point. The RCP is a greenhouse gas concentration (not emissions) trajectory adopted by the Intergovernmental Panel on Climate Change (IPCC) for the Fifth Assessment Report (AR5) published by the IPCC in 2014 (Pachauri & Meyer, 2014). The four RCPs (Representative Concentration Pathways) labeled after a range of radiative forcing values in the year 2100 relative to pre-industrial values (+2.6, +4.5, +6.0, and +8.5 W/m2). So, RCP4.5 that associated with a ~50% 3oC -4oC warming refers to the increase in energy absorption in the Earth’s atmosphere that would be associated with this scenario by 2100.
Thus, RCP is a way to show how Green House Gas concentration could develop in the future. However, they do not account for the social and economic circumstances driving them. To determine these factors, the Shared Socioeconomic Pathways (SSPs) have been created to complete the picture by including both social and economic drivers (McDonnell, 2019). Importantly, RCP and SSPs are allowing parallel approaches to understanding climate change scenarios and the output warming that is likely to occur.
The reality of taking a green road under SSP1 means that by between 2024- 2055 warming between 1.5 degrees Celsius- 2.0 degrees Celsius is likely to have occurred (Schwalm, 2021). Thus, importantly this means that if firms like those in Financial Services are running scenarios to understand impacts of climate change that these are best to run under the base of a 1.5 degrees Celsius- 2.0 degrees Celsius warming rather than under a net 0 increase.
What we need to remember on the front of polluting facilities is that their operations have been essential to economies all over the world for many decades; being needed to produce enough energy to meet the demands of many sectorial needs like agriculture and transportation and to supply reagents critical for manufacturing production. One can find examples of major carbon produces making a move to reduce greenhouse gas production and emittance to remain competitive (Good, 2020). To me, if polluting facilities could magically flick a switch to pure ‘green’-based operations they would if the price were right so to speak.
Reality is needed on Climate Change based on a balanced approach between what it is and what we can do collectively to start reducing its impacts. Data and historical information are important in building an understanding of Climate Change, but we cannot be confined to it.
References
Australian Government- Department of Agriculture, Water and the Environment, 2019. National Pollutant Inventory. [Online] Available at: https://www.npi.gov.au/substances/fact-sheets [Accessed 26 April 2021].
AZoCleantech, 2008. The Connection Between Waste Management & Global Warming, Manchester, United Kingdom: AZoCleantech.
Burgess, T. et al., 2020. Black Summer- Australian newspaper reporting of the nation’s worst bushfire crisis, Melbourne, Australia: Monash Climate Change Communication Research Hub, Monash University .
Centers for Disease Control and Prevention, 2021. Air Quality. [Online] Available at: https://www.cdc.gov/air/pollutants.htm [Accessed 26 April 2021].
Climate Science Investigations, 2016. Causes of Climate Change- Natural Causes of Climate Change, Washington, D.C., USA: NASA.
Denchak, M., 2017. Global Climate Change: What You Need to Know, New York, NY, USA: NRDC.
Environmental Justice Australia, 2020. Submission 44, Melbourne, Victoria, Australia: Environmental Justice Australia.
Good, A., 2020. Understanding the Emissions Challenge- An assessment of integrated oils' efforts to reduce greenhouse gas intensity., Chicago, Illinois, United States: MorningStar.
Hermant, N. & Clark, E., 2018. Australia's pollution mapped by postcode reveals nation's 'dirty truth', Sydney, Australia: ABC.
Kelly, J., 2019. The Top 10 Causes of Global Warming, Santa Monica, California, USA: Leaf Group Ltd.
Liu, Q. et al., 2021. Association between particulate matter air pollution and risk of depression and suicide: a systematic review and meta-analysis. Environ Sci Pollut Res Int, 28(8), pp. 9029-9049.
McDonnell, W., 2019. The heat is on- Insurability and Resilience in a Changing Climate, Amsterdam, The Netherlands: CRO Forum.
Pachauri, K. & Meyer, L., 2014. Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, Geneva, Switzerland: IPCC.
Park, J. et al., 2021. Impact of long-term exposure to ambient air pollution on the incidence of chronic obstructive pulmonary disease: A systematic review and meta-analysis. Environ Research, 194(110703), p. 8.
Ripple, W. J. et al., 2020. World Scientists’ Warning of a Climate Emergency. BioScience, 70(1), pp. 8-12.
Schwalm, C. R., 2021. Forecasting climate change risk: A ticking time bomb. Woods Hole, Falmouth, Massachusetts, USA, Woodwell Climate Research Center.
Simoncic, V. ,. E. C. D. S. K.-T. W., 2020. Adverse Birth Outcomes Related to NO 2 and PM Exposure: European Systematic Review and Meta-Analysis. Int J Environ Res Public Health, 17(8116), p. 70.
Stocker, T. D. Q. G.-K. P. M. T. S. A. J. B. A. N. Y. X. V. B. a. P. M., 2013. IPCC. Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge, United Kingdom and New York, NY, USA: Cambridge University Press.
The United Nations, 2020. UN Climate Talks 1992- 2020, New York City, New York, USA: The United Nations .
United States Environment Protection Agency, 2020. Air Quality and Climate Change Research. [Online] Available at: https://www.epa.gov/air-research/air-quality-and-climate-changeresearch#:~:text=Ozone%20in%20the%20atmosphere%20warms,sulfates%20cool%20the%20earth's%20atmosphere [Accessed 26 April 2021].
Yang, M. et al., 2020. Effects of long-term exposure to air pollution on the incidence of type 2 diabetes mellitus: a meta-analysis of cohort studies. Environ Sci Pollut Res Int, 27(1), pp. 798-811.
Zhang, H. Z. X. W. Q. ,. X. Y. ,. F. Y. ,. Y. Z. H. C., 2021. Ambient air pollution and stillbirth: An updated systematic review and meta-analysis of epidemiological studies. Environmental Pollution, 22 February.278(116752).
Zhu, W. et al., 2021. Long-term exposure to fine particulate matter relates with incident myocardial infarction (MI) risks and post-MI mortality: A meta-analysis. Chemosphere, March.267(128903).
?
Financial Risk & Compliance Lead | SAS | Global Leader in Analytics | Regulatory Capital | Stress Testing | Climate Risk & ESG | IFRS9 | Asset & Liability | Credit and Op Risk | IFRS17
9 个月Still very relevant. Great article and your personal views.
Interesting!