Climate Models Symposium PR

20 JULY 2009

Decision-making by businesses and policy-makers needs to be better informed by an understanding of the strengths and limitations of models used to assess the future impacts, costs and benefits of climate change, leading researchers will tell representatives from the public and private sector at a symposium today.

The symposium on ‘Interpreting models in a climate change context’, which is being held at the offices of Munich Re in London, is the first of a series that are being organised as part of a programme of research on evaluating the economics of climate risks and opportunities in the insurance sector at the Centre for Climate Change Economics and Policy. The programme is funded by Munich Re.

David Stainforth, the organiser of the symposium and Senior Research Fellow at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, will tell the audience: “Substantial and increasing effort is currently being expended in preparing society for the consequences of anthropogenic climate change. The identification of robust and relevant messages from current scientific understanding is therefore critical. Models, particularly computer-based models, are now widely used in these strategic, political and economic decisions. This symposium is bringing together experts from disciplines ranging from philosophy to physics to economics to insurance. By sharing experiences and engaging with the business participants, we aim to develop our ideas for producing and extracting valuable, relevant information from models, thus helping society prepare now for the consequences ahead, while guiding research to ensure that we have better information with which to make decisions in five years time.”

Professor Sir Brian Hoskins, Director of the Grantham Institute for Climate Change at Imperial College London and Professor of Meteorology at the University of Reading, will draw attention to the challenges of modelling climate variability and change. He will say: “The development of global climate models that can simulate observed climate variability and change with considerable realism is a superb achievement. However, projections for local and regional climate derived from them will always reflect their large-scale errors. Despite this, careful use of them is an essential ingredient in decision-making.”

Dr Simon Dietz, Deputy Director of the Centre for Climate Change Economics and Policy and the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, will highlight progress in modelling the economics of climate change. Dr Dietz, who was a member of the team that produced the landmark report on ‘The Economics of Climate Change: The Stern Review’, will say: “Modelling the costs and benefits of reducing carbon emissions is a formidable challenge. It is important to be aware of the limitations of such models, and to realise that the results are subject to very large uncertainty. Nevertheless, these economic models are useful in illustrating the risks involved, and in understanding what assumptions can support strong action to reduce emissions. Years of research and vigorous debate in the economics profession has shown that strong action to reduce emissions depends not only on physical changes in the climate system and their impacts, but also on value judgments about the importance of reducing climate risks in different parts of the world, and in the far-off future. Important recent contributions from climate scientists and economists suggest that the benefits of reducing emissions are greater than previously thought.”

Professor Leonard Smith, Director of the Centre for the Analysis of Time Series at the London School of Economics and Political Science, will say: “Scientific models lie at the heart of our understanding of complicated systems like the climate, an economy or an insurance market. Models are extremely valuable for decision-makers, and prove most useful when interpreted in the context of our understanding of the system itself. We must distinguish between the diversity shown by our models and the uncertainty in our future. In particular, paying attention to climate science can warn us of surprises that our models cannot see or forewarn us of, and thus provide a valuable aid in decision-making.”

Professor Arthur Petersen, of the Netherlands Environmental Assessment Agency, will focus on uncertainties in the models used by the Intergovernmental Panel on Climate Change (IPCC). He will tell the symposium delegates: “Climate modellers find it difficult to assess and discuss the reliability of climate model results. In their analysis of uncertainty, the methodological quality of the models is hardly addressed. When quantitative multi-model ensemble analysis is used as a substitute for a judgment call on the quality of the underlying models, the possibility that some crucial climate processes are not or poorly represented by all models is not taken seriously. The drafts of the IPCC Fourth Assessment Report tended to downplay the judgmental aspect of science. This was corrected by country delegations at the plenary session where the Summary for Policymakers was discussed in Paris, January 2007, before its publication.”

Dr Eberhard Faust, Head of Research: Climate Risks and Natural Hazards Geo Risks Research/Corporate Climate Centre at Munich Re, will discuss the use of climate models in the insurance industry. He will say: “Over the last decade, climate modelling has become increasingly relevant for the steering of insurance business, but still is in its early stages. Scientific facilities and insurers have been advancing knowledge about operational practices and scientific capabilities, respectively. Although there are fundamental challenges in terms of the choice of methodology and in dealing with uncertainties, the financial services industry can already make fruitful use of climate model information.”

-ENDS-

 

NOTES FOR EDITORS

 

1. The Centre for Climate Change Economics and Policy (http://www.cccep.ac.uk) is hosted by the University of Leeds and the London School of Economics and Political Science. It was officially launched at the University of Leeds on 27 January 2009. The Centre is funded by the UK Economic and Social Research Council and Munich Re.
2. The Munich Re Group operates worldwide, turning risk into value. In the financial year 2007, it achieved a profit of €3,937 million, the highest since the company was founded in 1880, on premium income of approximately €37 billion. The Group operates in all lines of business, with around 43,000 employees at over 50 locations throughout the world and is characterised by particularly pronounced diversification, client focus and earnings stability. With premium income of around €21.5 billion from reinsurance alone, it is one of the world's leading reinsurers. Its primary insurance operations are mainly concentrated in the ERGO Insurance Group. With premium income of over €17 billion, ERGO is one of the largest insurance groups in Europe and Germany. It is the market leader in Europe in health and legal expenses insurance, and 34 million clients in over 30 countries place their trust in the services and security it provides. The global investments of the Munich Re Group amounting to €176 billion are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group. More at: http://www.munichre.com.
3. The Economic and Social Research Council (ESRC) is the UK's largest funding agency for research, data resources and postgraduate training relating to social and economic issues. It supports independent, high quality research which impacts on business, the public sector and the third sector. The ESRC’s planned total expenditure in 2008-09 is £203 million. At any one time, the ESRC supports over 4,000 researchers and postgraduate students in academic institutions and research policy institutes. More at: http://www.esrcsocietytoday.ac.uk.