Understanding Climate Risk

Science, policy and decision-making

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But is it just red noise?

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I gave a seminar yesterday at the ARC Centre of Excellence for Climate System Science at the University of New South Wales. Thanks Alvin Stone and Andrea Taschetto for organising it. It’s the first time I’ve had the opportunity to go through the entire ‘step change’ hypothesis of how the climate changes, the theoretical background, structural models developed from that and how the testing was set up, prior to showing a whole raft of test results.

One of the questions I got at the end, which also comes up quite often in the literature, was about the potential cause of the step changes in temperature data. It came from a question as to whether we had tested the step change model with artificial data that had been ‘reddened’ – that is, made dependent on the previous data. Such time series can have long-term persistence and contain a number of different quasi-periodic timescales, so do not conform to a single statistical model. This line of questioning alludes to whether a step or nonlinear response in a time series needs to be have an underlying cause that can be linked to an external source or whether it’s the result of random variations (see paper by Rodionov for a more more technical description). I gave a somewhat flip answer – because there is real energy in the system we are assessing (the climate system), whether a rapid shift is due to red noise or not matters less than understanding what that means for risk.

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Written by Roger Jones

May 29, 2016 at 8:35 pm

Final Scorecard from Environment Victoria

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I haven’t posted anything on the election because it’s all too depressing.

From Environment Victoria, here’s the link to a final policy snapshot of what the major parties would do for our environment if elected on Saturday > http://bit.ly/13GuiXY

Full policy analysis available here > http://bit.ly/1aRQUN5

Written by Roger Jones

September 5, 2013 at 4:34 pm

The End of the World

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This blog has been silent for longer than I’d like to recall (*crickets*), but I really did think that I wasn’t going to wake up this morning, or if I did, it would be in limbo.

See, the world ended today July 1, 2012 because the carbon levy came into being. Maybe it’s been put off until tomorrow when the markets open. This will be the next shock that brings the global economy to its knees.

Independent Australia has got it about right, posting the end of the world under satire. Terry McCrann, who continually satirises himself (and amuses me no end), writes in the Hun today: Read the rest of this entry »

Written by Roger Jones

July 1, 2012 at 12:00 pm

Feedback to Coles

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I’m still using supermarkets to purchase a number of household goods despite my misgivings about their practises. This may have to change. Following is some feedback I sent to Coles after riding over to get some milk (organic) and other stuff:

*Very* disappointed to see that Orange Power products have disappeared off the shelves. They are the most effective environmentally friendly commercially available cleaner on the market. In fact, I’ve noticed a reduction in environmental cleaners and products generally – perhaps they are seen as niche products that cannot survive in your war with Woolworths. The benefit of such products is that they have reduced social and environmental costs generally compared to standard products.

It is getting more difficult for me to justify purchasing goods from Coles and Woolies due to cost-cutting policies that are hurting primary producers. I guess I’m the relatively rare consumer who considers the entire supply chain when I purchase goods – that’s the rational basis on what I choose to purchase and where I purchase them.

Orange Power citrus cleaners are the most cost effective way to clean a bike, and considering I ride every day, it’s an essential.

Written by Roger Jones

March 10, 2012 at 6:53 pm

The pink surfboard conundrum

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The pink surfboard conundrum: calculating risk v a social licence to operate

by Professor Roger Jones, Professorial Research Fellow at the Centre for Strategic Economic Studies (CSES) at Victoria University and FAQ Research writer. Cross-posted at Crikey.

Coal seam gas issue presents a wicked problem. Wicked problems are hard to define, have competing values and cannot be definitively solved. For wicked risks, perceptions are just as important as the risks themselves.

So when a wicked risk becomes a hot political issue how do you know whether you’re being reliably informed or being sold a pink surfboard?

Recently, Ben Cubby reported in the Sydney Morning Herald on the public relations challenges discussed at an industry conference:

“A consultant, Daniel Tormey, recounted his experience with the development of oil drilling off California’s coast, and drew parallels with opposition to the coal seam gas industry in Australia.

“Environmental concerns were addressed, and the public had not logged any major objections, he said, but then the Hollywood actor Daryl Hannah was photographed carrying a pink surfboard and protesting about oil drilling. At that point, support for the industry collapsed, and he warned gas executives that the same thing could happen here. ‘Once you see the pink surfboard you know you can’t win.’”

Advocates, both pro and con CSG, are trying to capture public opinion and create their own pink surfboard moment, while preventing their opposition from getting the upper hand.

The CSG industry and a social licence to operate

The coal seam gas industry is seeking a social licence to operate.

Part of that social licence is tacit, where the community recognises the benefits of an industry and accepts that it is acting in a socially and environmentally responsible manner. Another part of that licence is exercised by government in permitting the activity and ensuring that a range of conditions are met on behalf of the community.

Here’s what the Australian coal industry says about their social licence:

“The Australian coal industry respects that its long-term future relies on its ‘social licence’ to operate. This means that the majority of the community remains supportive of Australia’s coal mining industry once aware of the economic and employment the industry provides; the essential products that it produces for domestic and overseas markets for energy, steelmaking and other industrial processes; and the impacts it can have on the environment and some local communities.”

They also state:

“The Australian coal industry places premium value on maintaining its social licence to operate. In order to do so, the industry promotes the pro-active steps that it is taking to address impacts on the environment and some local communities, and works with those communities and governments to address concerns as they arise. The objective is to ensure the responsible, long-term development of Australia’s coal resources in a manner that is accepted and supported by the Australian community.”

The industry’s licence to operate is focused on maintaining a healthy coal industry. This is also relevant to other fossil fuel resources including coal seam gas. Continuation of the industry is a core part of their social LTO. Transforming the industry away from fossil fuel extraction to another form of energy resource is not on the table.

Other players would like to see this licence suspended or even cancelled because of the risks from fossil fuel emissions to groundwater and to agricultural productivity.

So the stakes are high.

Wicked risks

Three areas of risk are particularly relevant to negotiating wicked risks: calculated risk, perceived risk and political risk.

Calculated risk

Calculated risk is the estimate of risk calculated by expert assessment.

This combines science and values to estimate the likelihood of risk and assess the costs and benefits of various options for risk management. Aspects of calculated risk surrounding CSG include the identification of reserves, exploration and extraction, the interaction of CSG and groundwater, the greenhouse gas footprint of the production and consumption cycle, land-use and land planning, onsite environmental impacts and broader social and environmental outcomes.

Critical environmental issues include the extraction and injection of groundwater, the chemistry of the coal seam gas and groundwater, the chemical agents used to extract the gas, and the volumes  and quality of groundwater consumed in the process.

Perceived risk

Perceived risk is how a risk and risk management options are seen by an observer.

It includes how that person frames that risk via their personal values, but is also affected by a number of heuristics, or mental rules of thumb. For example, the short-term framing of economic gains from fossil fuel extraction is very different to long-term values attached to the sustainable use of groundwater. The value that a farmer puts on their livelihood is often very different to how a mining company will maximise shareholder return.

If external costs are to be allowed for, utilitarian economics will put a dollar value on all commercial, social and environmental aspects of risk, claiming that costs and benefits can be balanced this way.

Broader measures of welfare suggest these different viewpoints are very differently balanced. For perceived risk, emotional, rather than analytic, decision-making is likely to dominate.

Political risk

For political risk, the rubber hits the road on calculated versus perceived risk.

Good policy requires credible estimates of calculated risk, whereas good politics has to navigate the emotional currents of perceived risk. Much of this takes place in the rough and tumble market of public opinion, dialogues of power and privilege, and social discourses describing personal and institutional aspirations.

Pink surfboards can be game breakers.

How these come together is shown in the following cartoon. It combines calculated and perceived risks in “good” policy making where the various economic, social and environmental interests in a complex risk are combined. The prize is a social licence to operate.

Risk and pink surfboards

Reading the material being presented to the public via the social, print and broadcast media the debate on CSG is clearly dominated by the pink surfboard aspects of risk management. The main links are between perceived and political risk. That’s not to say that efforts aren’t being made to calculate the technical aspects of risk, it’s just that this is mainly taking place behind the scenes.

In the time it takes to assess things like the long-term effect of widespread CSG on groundwater, the socio-economic  balance between agriculture and CSG in rich fields, strategies for environmental management, how to substitute CSG for higher-emitting fuels rather than just add to them, the argument could be won or lost (depending which “side” it is viewed from).

Also, it is not a good strategy to admit to areas where the level of knowledge, therefore the ability to calculate risk, is low. It’s easier and cheaper for the media to report on pink surfboards. It’s cheaper and more politically effective to influence perceived risk, which requires a working knowledge of the psychology of selling, of pink surfboards and purple pachyderms. Look over there – a big shiny thing!

But if CSG is to be extracted sustainably, then good policy is vital.

In future articles we will look at how risk is being assessed and contrast that with appeals to risk perceptions. A pink surfboard on an astroturf background may be eye-catching but it’s not informative.

Professor Roger Jones is a Professorial Research Fellow at the Centre for Strategic Economic Studies (CSES) at Victoria University. Read more about FAQ Research writers here.

CEP gets up

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The government’s emissions trading legislation got up 74 votes to 72. The best legislation is the one that gets up so no complaints here and let’s move on.

My quick response to the Australian Science Media Centre:

It is good to see this legislation passed. Its main benefit will be in creating institutions and markets focussed on lower carbon technology, emissions production and in generating services for greater efficiency. It is clear from the number of industry comments so far, that this capacity is ready to go in many areas. The 2020 target is useful and can be amended but the critical target in the legislation is that of 80% reductions by 2050.

It’s also clear that the public wants to learn more about the legislation, what its benefits are and how both the costs and benefits affect them. A great deal of misinformation in the media and elsewhere has hindered this. The motives of those who cast doubt on the science in order to further their own agenda needs to be seriously questioned.

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Written by Roger Jones

October 12, 2011 at 1:42 pm

Posted in Uncategorized

IPCC uncertainty management – new paper

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I’ve just had a paper, The latest iteration of IPCC uncertainty guidance—an author perspective, published online at Climatic Change. It claims that the new uncertainty management for the IPCC’s Fifth Assessment Report (pdf) is most suited to managing uncertainty in the physical sciences, and climate change as a complex, or ‘wicked system’ risk requires a more applied approach. The paper is open source so can be downloaded and read by anyone. Happy to get comments here. It’s part of a special issue in honour of the late Stephen Schneider, the chief uncertainty cop with the IPCC and climate science community, and founding editor of Climatic Change.

I can take credit for planting the seed of this issue in the minds of the new editors, Michael Oppenheimer and Gary Yohe. Abstract and special issue announcement over the fold. Links to open source papers so far posted and to the guidance documents, past and present, can also be found.

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Written by Roger Jones

September 25, 2011 at 7:46 am