Combining Climate Scenarios and Risk Management Approach—A Finnish Case Study

Abstract

Climate change impacts on nature and the environment have been widely discussed and studied. Traditionally, a company's continuity management is based on risk analysis. There are also attempts to implement scenario-based methods in the risk management procedures of companies. For industrial decision makers, it is vital to acknowledge the impacts of climate change with regards to their adaptation strategies. However, a scenario-based approach is not always the most effective way to analyze these risks. This paper investigates the integration of scenario and risk-based methods for a company's adaptation planning. It considers the uncertainties of the climate change scenarios and the recognized risks as well as suitable adaptation strategies. The paper presents the results of climate risk analysis prepared for two Finnish hydropower plants. The introduced method was first piloted in 2008 and then again in 2015. The update of the analysis pointed out that at the company level, the climate risks and other risks originating from governmental or political decisions form an intertwined wholeness where the origin of the risk is difficult to outline. It seems that, from the business point of view, the main adaptation strategies suggested by the integrated risk and scenarios approach are those that support buying "safety margins" in new investments and reducing decision time horizons. Both of these adaptation strategies provide an advantage in the circumstances where also political decisions and societal changes have a great effect on decision making.

Tools and Methods for Supporting Regional Decision-Making in Relation to Climate Risks

“…Seven articles represented maps or other visual tools [13,[58][59][60][61][62][63]. Most of the methods in this category related to expected future changes in water resources, such as rising seawater, groundwater level variation, flooding or other extreme water flow events in a map format.…”

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Climate Change Policy Implications of Sustainable Development Pathways in Korea at Sub-National Scale

“…Global climate change communities have developed a scenario framework to analyze future impacts and policies [1,2]. Climate scenarios have been applied widely in climate change policy analyses [3][4][5][6][7][8][9][10][11] and in South Korea [12][13][14][15][16][17][18]. Research and policymaking communities are aware of the implications of different climate scenarios.…”

Improving resilience of reservoir operation in the context of watercourse regulation in Finland

“…Merz et al (2015) recognize that surprise is a neglected element in flood risk assessment and management, and discuss about the possible approaches to better understanding the complexity of flood risk systems and cognitive biases in human perception. Much of the earlier work has focused on the physical risks to dam security (e.g., Isomäki et al 2012), but in recent years, the role of the societal issues has also been emphasized (e.g., Molarius et al 2015). For example, Koks et al (2015) present an approach for evaluating flood risk-management strategies based on the joint assessment of hazard, exposure and social vulnerability.…”