The Oxford Handbook of the Macroeconomics of Global Warming 2015
DOI: 10.1093/oxfordhb/9780199856978.013.0002
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Improving Climate Projections to Better Inform Climate Risk Management

Abstract: This review describes and applies criteria for assessing the usefulness of climate projections to inform risk management decisions. In particular, we discuss climate projections in terms of whether they represent decision-relevant climate properties, time scales, and uncertainties. We focus on two decision problems outlined in the introduction: the design of climate change adaptation and mitigation strategies. We argue that while climate projections have seen drastic improvements in the last few years, they st… Show more

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Cited by 6 publications
(6 citation statements)
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“…Based on a simple empirical analysis, the 10th percentile corresponds to approximately the 1in-10-year event, while the lowest observed yield corresponds to approximately the 1-in-50-year event (from a 50-year sample). From a risk management perspective, it is important to properly characterize the distribution tails and thus the magnitude of these events 39 ; but exactly how reliable the models need to be at different thresholds ultimately depends on the decision context of the end-use application.…”
Section: Resultsmentioning
confidence: 99%
“…Based on a simple empirical analysis, the 10th percentile corresponds to approximately the 1in-10-year event, while the lowest observed yield corresponds to approximately the 1-in-50-year event (from a 50-year sample). From a risk management perspective, it is important to properly characterize the distribution tails and thus the magnitude of these events 39 ; but exactly how reliable the models need to be at different thresholds ultimately depends on the decision context of the end-use application.…”
Section: Resultsmentioning
confidence: 99%
“…By contrast, every sample generated by the CMIP ensemble exhibits variability, measured either by the standard deviation or median absolute deviation, larger than that observed. Decision-making strategies that are robust against low-probability, high-impact events require information about the entire range of outcomes 34 . Here, the largest negative yield shock (Figure 1.d) represents the most extreme event observed throughout the historical period.…”
Section: Resultsmentioning
confidence: 99%
“…We have not yet investigated the spread of the ensemble, which is as least as important, especially for impact-and risk-related fields. As an example, the potential danger of having a too-narrow ensemble spread (overconfident projections) by neglecting important uncertainties is highlighted in Keller and Nicholas (2015).…”
Section: Application To the Future 421 Testing Out-of-sample Skillmentioning
confidence: 99%