Climate learning scenarios for adaptation decision analyses: Review and classification

Economic decision analysis is an important tool for developing cost-efficient adaptation pathways in sectors that involve costly adaptation options, such as flood risk management. Standard economic approaches, however, do not consider learning about future changes in climate variables even though a large literature on adaptive planning emphasises the key role of learning over time, because uncertainties about climate change are substantial. An emerging, diverse and fragmented set of economic adaptive decision making approaches, coming under labels such as real-option analysis or optimal control, have started to address this challenge by including the economic valuation of learning in the economic appraisal of adaptation options through making use of so-called climate learning scenarios. We synthesise this literature and classify the climate learning scenarios applied with respect to which climate variable is learned about, which learning sources are employed, how the learning is modelled, which climate data is used for calibrating learning scenarios, which goodness of fit information is provided and how deep uncertainty is handled. Our results show that publications consider learning through observations or do not explicitly state the source of learning. Most authors generate climate learning scenarios through stochastic processes or Bayesian approaches and use climate model output from the IPCC or the UK Met Office to calibrate the learning scenarios. The reviewed literature rarely provides information on the goodness of fit of learning scenarios to the underlying climate data. We conclude that most of the methods used to generate climate learning scenarios are not well-grounded in climate science and are inadequate to represent climate uncertainty. One avenue to improve climate learning scenarios would be to combine a Bayesian approach with emulators that mimic climate model runs based on observations from future moments in time.

Völz V., Hinkel J., Climate learning scenarios for adaptation decision analyses: Review and classification, 2023, Climate Risk Management,

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Decision-support for land reclamation location and design choices in the Maldives

Land reclamation in the Maldives is widespread. Current land reclamation practices, however, lack a systematic approach to anticipate sea-level rise and do not account for local flood risk differences to inform location and design choices. To address these limitations, this paper applies two decision-support tools: a hazard threshold analysis, and a cost-benefit analysis. Both tools produce site-specific estimates of land elevations or flood defence heights but do so for different goals. The hazard threshold analysis identifies hazard-based solutions that meet an acceptable flood probability for an intended lifespan without follow-up actions by reliability optimisation. The cost-benefit analysis identifies risk-based solutions using dynamic programming. We apply both tools to two land reclamation sites, a newly reclaimed airport island and a land extension of an inhabited island, in the Maldives. We find that total hazard-based heights for long-term planning horizons are highly uncertain, with local height differences of up to 1.9 m across sea-level rise scenarios by 2100. Risk-based Island elevations, in contrast, differ much less across scenarios, offering a practical advantage for decision-making. However, land reclamation choices on location, land elevation and investment in flood protection are not only driven by hazard-related aspects, such as reef characteristics, swell exposure, and sea-level rise, but also by estimates of exposed assets, reclamation, and flood protection costs. Taken together, the two decision-support tools are helpful for improving adaptation decisions and are also applicable in other small island regions.

Van der Pol T., Gussmann G., Hinkel J., Amores A., Marcos M., Rohmer J., Lambert E., Bisaro A., 2023, Decision-support for land reclamation location and design choices in the Maldives, Climate Risk Management,

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New GCF study on climate change impacts on Pari island (Indonesia)

(German version below)

In a new study, scientists from the GCF examine the current and future effects of anthropogenic global warming on the Indonesian island of Pari. The focus is on sea level rise as this is responsible for much of the climate change impacts on low-lying coral reef islands as Pari. In particular, the study examines two questions:

Can it be determined whether there is an significant likelihood that human-caused global warming and associated sea-level rise have caused, and will cause, climate change-related impacts and damage in the future?
Can it be quantified what proportion of historical and future flood damage can be attributed to anthropogenic global warming?

The study was commissioned by the Swiss Evangelical Reformed Church (HEKS) and is intended to support decision-making processes with regard to the effects of climate change and sea level rise on small islands and specifically on the island of Pari in Indonesia. The background is a lawsuit by four Indonesians against the concrete producer Holcim.

The full study can be viewed here.

Neue GCF Studie zu Auswirkungen des Klimawandels auf der indonesischen Insel Pari

In einer neuen Studie untersuchen Wissenschaftler und Wissenschaftlerinnen vom GCF die heutigen und zukünftigen Auswirkungen der menschengemachten (anthropogenen) Klimaerwärmung auf die indonesische Insel Pari. Der Schwerpunkt liegt dabei auf dem Meeresspiegelanstieg, weil dieser für einen Großteil der klimawandelbedingten Auswirkungen auf niedrig gelegene Korallenriffinseln (wie Pari) verantwortlich ist. Insbesondere untersucht die Studie zwei Fragen:

Läßt sich feststellen, ob es eine überwiegende Wahrscheinlichkeit gibt, dass die menschengemachte Klimaerwärmung und der damit verbundene Meeresspiegelanstieg zu klimawandelbedingten Auswirkungen und Schäden geführt haben, und in der Zukunft zu Schäden führen werden?
Kann quantifiziert werden, welchen ursächlichen Anteil die menschengemachte Klimaerwärmung an historischen Flutschäden und zukünftig zu erwartenden Flutschäden hat?

Die Studie wurde vom Hilfswerk der Evangelisch-reformierten Kirche Schweiz (HEKS) in Auftrag gegeben und soll Entscheidungsprozesse im Hinblick auf die Auswirkungen des Klimawandels und des Meeresspiegelanstiegs für kleine Inseln und speziell für die Insel Pari in Indonesien unterstützen. Hintergrund ist eine Klimaklage von vier Indonesier:innen gegen den Betonproduzenten Holcim.

Die vollständige Studie kann hier eingesehen werden.

Making the UN Ocean Decade work? The potential for, and challenges of, transdisciplinary research and real-world laboratories for building towards ocean solutions

  1. Due to the strong interconnectedness between the ocean and our societies worldwide, improved ocean governance is essential for sustainable development in the context of the UN Ocean Decade. However, a multitude of different perspectives—ecological, societal, political, economic—and relations between these have to be understood and taken into consideration to foster transformative pathways towards marine sustainability.
  2. A core challenge that we are facing is that the ‘right’ response to complex societal issues cannot be known beforehand as abilities to predict complex systems are limited. Consequently, societal transformation is necessarily a journey towards the unknown and therefore requires experimental approaches that must enable the involvement of everyone with stakes in the future of our marine environment and its resources.
  3. A promising transdisciplinary research method that fulfils both criteria—being participatory and experimental—are real-world laboratories. Here, we discuss how real-world labs can serve as an operational framework in the context of the Ocean Decade by facilitating and guiding successful knowledge exchange at the interface of science and society. The core element of real-world labs is transdisciplinary experimentation to jointly develop potential strategies leading to targeted real-world interventions, essential for achieving the proposed ‘Decade Outcomes’.
  4. The authors specifically illustrate how deploying the concept of real-world labs can be advantageous when having to deal with multiple, overlapping challenges in the context of ocean governance and the blue economy.
  5. Altogether, we offer a first major contribution to synthesizing knowledge on the potentials of marine real-world labs, considering how they act as a way of exploring options for sustainable ocean futures. Indeed, in the marine context, real-world labs are still under-explored but are a tangible way for addressing the societal challenges of working towards sustainability transformations over the coming UN Ocean Decade and beyond.

Franke, A., Peters, K., Hinkel J., Hornidge, A., Schlüter, A., Zielinski, O., Wiltshire, K., Jacob, U., Krause, G., Hillebrand. H., 2022. Making the UN Ocean Decade work? The potential for, and challenges of, transdisciplinary research and real-world laboratories for building towards ocean solutions. People and Nature.

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The macroeconomic effects of adapting to high-end sea-level rise via protection and migration

Climate change-induced sea level rise (SLR) is projected to be substantial, triggering human adaptation responses, including increasing protection and out-migration from coastlines. Yet, in macroeconomic assessments of SLR the latter option has been given little attention. We fill this gap by providing a global analysis of the macroeconomic effects of adaptation to SLR, including coastal migration, focusing on the higher end of SLR projections until 2050. We find that when adapting simultaneously via protection and coastal migration, macroeconomic costs can be lower than with protection alone. For some developing regions coastal migration is even less costly (in GDP) than protection. Additionally, we find that future macroeconomic costs are dominated by accumulated macroeconomic effects over time, rather than by future direct damages, implying the need for immediate adaptation. Finally, we demonstrate the importance of including autonomous adaptation in the reference scenario of economic assessment studies to avoid overestimation of adaptation benefits.

Bachner, G., Lincke, D. & Hinkel, J., 2022. The macroeconomic effects of adapting to high-end sea-level rise via protection and migration. Nat Commun 13, 5705.

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New working paper: Klaus Hasselmann and Economics

Klaus Hasselmann has earned the 2021 Nobel prize in physics for his breakthroughs in analysing the climate system as a complex physical system. Since decades, as a leading climate scientist he is aware of the need for creative cooperation between climate scientists and researchers from other fields, especially economics. To facilitate such cooperation, he has designed a productive research program for economic analysis in view of climate change. Without blurring
the differences between economics and physics, the Hasselmann program stresses the complexities of today’s economy. This includes the importance of heterogeneous actors and different time scales, of making major uncertainties explicit and bringing researchers and practitioners in close interaction. The program has triggered decades of collaborative research, especially in the network of the Global Climate Forum, that he has founded for this purpose. Research inspired by Hasselmann’s innovative ideas has led to a farewell to outdated economic approaches: singleequilibrium models, a single constant discount rate, framing the climate challenge as a kind of prisoner’s dilemma and framing it as a problem of scarcity requiring sacrifices from the majority of today’s population. Instead of presenting the climate problem as the ultimate apocalyptic narrative, he sees it as a challenge to be mastered. To meet this challenge requires careful research in order to identify underutilisation of human, technical and social capacities that offer the keys to a climate friendly world economy. Climate neutrality may then be achieved by activating these capacities through investmentoriented climate strategies, designed and implemented by different actors both in industrialised and developing countries. The difficulties to bring global greenhouse gas emissions down to net zero are enormous; the Hasselmann program holds promise of significant advances in this endeavour.
Access the paper HERE or through the link in the title.

Vested interests, rather than adaptation considerations, explain varying post-tsunami relocation outcomes in Laamu atoll, Maldives

Relocating communities out of increasingly risk-prone areas is effective for adapting to climate change. Relocations are particularly relevant for small island regions, where sea-level-rise-induced retreat from the coast will be inevitable for some communities. However, relocations are contested because communities are generally reluctant to move, and decision-makers face high political risks. As a consequence, relocations mostly occur after extreme events. In such situations, existing rules can be undermined by politics and power, driving relocation policy and resulting in varying relocation outcomes. However, these political and policy dimensions of post-disaster relocations have received little attention. Here, we study the politics and power dynamics of two post-tsunami relocations in the Maldives. Using process tracing, we find that vested interests, rather than adaptation considerations, explain varying relocation outcomes. Our findings highlight the complex power structures inherent in post-disaster relocations, which explain why similar events and drivers did not produce similar outcomes.

Gussmann, G. and Hinkel, J., 2021. Vested interests, rather than adaptation considerations, explain varying post-tsunami relocation outcomes in Laamu atoll, Maldives. One Earth.

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GCF Report 01/2021: Landmark report on financing public investments required by climate goals

For the first time, this report shows a realistic way to finance public climate investment, considering the critical example of Germany.
Access the Full Report here.


Uncertainty and Bias in Global to Regional Scale Assessments of Current and Future Coastal Flood Risk

This study provides a literature-based comparative assessment of uncertainties and biases in global to world-regional scale assessments of current and future coastal flood risks, considering mean and extreme sea-level hazards, the propagation of these into the floodplain, people and coastal assets exposed, and their vulnerability. Globally, by far the largest bias is introduced by not considering human adaptation, which can lead to an overestimation of coastal flood risk in 2100 by up to factor 1300. But even when considering adaptation, uncertainties in how coastal societies will adapt to sea-level rise dominate with a factor of up to 27 all other uncertainties. Other large uncertainties that have been quantified globally are associated with socio-economic development (factors 2.3–5.8), digital elevation data (factors 1.2–3.8), ice sheet models (factor 1.6–3.8) and greenhouse gas emissions (factors 1.6–2.1). Local uncertainties that stand out but have not been quantified globally, relate to depth-damage functions, defense failure mechanisms, surge and wave heights in areas affected by tropical cyclones (in particular for large return periods), as well as nearshore interactions between mean sea-levels, storm surges, tides and waves. Advancing the state-of-the-art requires analyzing and reporting more comprehensively on underlying uncertainties, including those in data, methods and adaptation scenarios. Epistemic uncertainties in digital elevation, coastal protection levels and depth-damage functions would be best reduced through open community-based efforts, in which many scholars work together in collecting and validating these data.

Hinkel, J., L. Feyen, M. Hemer, G. Le Cozannet, D. Lincke, M. Marcos, L. Mentaschi et al. Uncertainty and bias in global to regional scale assessments of current and future coastal flood risk. Earth’s Future: e2020EF001882. (2021)

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Risks on global financial stability induced by climate change: the case of flood risks

There is increasing concern among financial regulators that changes in the distribution and frequency of extreme weather events induced by climate change could pose a threat to global financial stability. We assess this risk, for the case of floods, by developing a simple model of the propagation of climate-induced shocks through financial networks. We show that the magnitude of global risks is determined by the interplay between the exposure of countries to climate-related natural hazards and their financial leverage. Climate change induces a shift in the distribution of impacts towards high-income countries and thus larger amplification of impacts as the financial sectors of high-income countries are more leveraged. Conversely, high-income countries are more exposed to financial shocks. In high-end climate scenarios, this could lead to the emergence of systemic risk as total impacts become commensurate with the capital of the banking sectors of countries that are hubs of the global financial network. Adaptation policy, or the lack thereof, appears to be one of the key risk drivers as it determines the future exposure of high-income countries. This implies in particular that the avoided costs in terms of financial stability should be weighted in as benefits of adaptation policy.

Mandel, A., Tiggeloven, T., Lincke, D. et al. Risks on global financial stability induced by climate change: the case of flood risks. Climatic Change 166, 4 (2021).

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