Op-ed Climate Risk Management: A Way Forward

Uncertainty dogs all of our decisions and poses a challenge to success in our endeavors. Risk from these uncertainties can be managed, though, and, with sound investments, successful strategies can be adopted and goals achieved.

A growing area of concern is climate change. A focus on attribution has polarized society, with scientists viewed by some as perpetrators of a hoax, and politicians and fossil fuel executives viewed as climate change deniers. The polarization of the discussion concerning anthropogenic climate change has stymied progress. What is necessary to move beyond these debates toward consensus on the occurrence and impacts of climate change and on actions to be taken?

I served as head of the Geosciences Department at Pennsylvania State University for six years before becoming dean of the College of Earth and Mineral Sciences. The department boasts top programs in both climate change and the geology of fossil fuels. Its alumni advisory board includes individuals with successful careers in the oil and gas industry, government, environmental consulting, and academia.

Often I would invite individual faculty members to talk about their science to the board during its semi-annual meeting. I noticed that talks presented as primers on climate change, explaining the greenhouse effect and advocating for action on climate change, were variably received, with some board members put off by what they felt was a patronizing presentation.

In 2013 I asked Klaus Keller, a climate scientist who leads Penn State’s Center for Climate Risk Management, to address the group. He took a different tack, describing his research on sea level rise. He reported on a study, conducted with colleagues, to develop strategies enabling the Port of Los Angeles to account for highly uncertain outcomes of climate change and sea level rise in its infrastructure investments for the future. Keller and his colleagues used both robust decision-making analysis, to establish under what future conditions a decision to harden facilities against sea level rise would pass a cost-benefit test, and climate science to determine whether such conditions are sufficiently likely to justify the investment.

As Keller described his work to the advisory board, I saw the same people who were red in the face during the presentation on greenhouse effects nodding in agreement and approval. At the end of his talk, one of the industry alums exclaimed, “Now I get it!” After Keller left, the group asked me if he taught climate risk management courses to our students (he does) and recommended that all our students should learn to “think like Klaus!”

That experience convinced me that the way forward is to redirect the discussion from whether climate is changing and what or who is responsible for those changes, to the possible risks associated with climate change and how they should be managed. I think even self-identified climate deniers would agree that there is some (perhaps remote) possibility that future climates affected by rising carbon dioxide levels could be hostile to the conduct of their business, not to mention the survival of coastal communities and the productivity of agriculture worldwide, to name just a few of the threats.

Like most people, the deniers take out insurance against risks that are highly unlikely but hugely damaging if they occur. Why not likewise manage the risk of climate change?

Recent discoveries of oil and gas in unconventional reservoirs accessed through fracking enhance US -energy independence and thus the nation’s security. The unmitigated burning of fossil fuels, however, also poses nontrivial environmental risks. Moreover, current practices are not sustainable, as fossil fuels will simply run out.

The question is therefore not whether but when and how to transition to renewable energy sources. What are strategies to use fossil fuels responsibly and find sweet spots in the tradeoffs between the prospects and risks of that continued use?

Designing a sound roadmap for this transition requires input from citizens, industry, government, and non-governmental organizations. Universities such as Penn State can serve an important role in the process, investing intellectual capital and providing a trusted, neutral forum to help design and implement such a roadmap. The first step will be to establish the mix of renewable energy sources anticipated for the region of interest (e.g., the regional electric grid). Consensus building will emerge through the development of a sustainable path that maximizes economic prosperity while minimizing environmental impact and that focuses on risk management rather than climate change causes and attribution.

In any event, it is essential to develop a plan. Not to do so puts society at unacceptable risk.