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Abrupt Climate Change: Inevitable Surprises 6 Findings and Recommendations The earth’s climate system is characterized by change on all time and space scales, and some of the changes are abrupt even relative to the short time scales of relevance to human societies. Paleoclimatic records show that large, widespread, abrupt climate changes have affected much or all of the earth repeatedly over the last ice-age cycle as well as earlier – and these changes sometimes have occurred in periods as short as a few years. Perturbations in some regions were spectacularly large: some had temperature increases of up to 16°C and doubling of precipitation within decades, or even single years. Changes in precipitation and evaporation are estimated to have caused changes in the extent of wetlands around the world of up to 50 percent. Agreement between proxy and instrumental records and between different proxy records lends confidence to paleoclimatic reconstructions and allows scientists to be very confident that abrupt climate change is a real, recurrent phenomenon. Abrupt climate changes in the last few thousand years generally have been less severe and affected smaller areas than some of the changes further back in the past. Nonetheless, evidence shows that rapid climate changes have affected societies and ecosystems substantially, especially when the changes that brought persistent droughts occurred in regions with human settlements. There is no reason to believe that abrupt climate changes will not occur again. Furthermore, the paleoclimatic record demonstrates that the most
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Abrupt Climate Change: Inevitable Surprises dramatic shifts in climate have occurred when factors controlling the climate system were changing. This has important implications for future climate in that it suggests that increasing human perturbation of the earth system may make abrupt change more likely. Some sectors of the economy and ecosystems might be highly sensitive to abrupt climate change. Because the economy is more “managed” than are ecosystems, particularly in the industrial sectors of developed societies such as the United States, the major vulnerability to the effects of abrupt climate change is likely to lie at the intersection of human societies and ecosystems, such as for agriculture, forests, and water systems. It is important not to be fatalistic about the threats posed by abrupt climate change. Societies have faced both gradual and abrupt climate changes for millennia and have learned to adapt through various mechanisms, such as moving indoors, developing irrigation for crops, and migrating away from inhospitable regions. Nevertheless, because climate change is likely to continue and may even accelerate in the coming decades, denying the likelihood or downplaying the relevance of past abrupt changes could be costly. Societies can take steps to face the potential for abrupt climate change. The committee believes that increased knowledge is the best way to improve the effectiveness of response, and thus that research into the causes, patterns, and likelihood of abrupt climate change can help reduce vulnerabilities and increase our adaptive capabilities. The committee’s research recommendations fall into two broad categories: (1) implementation of targeted research to expand instrumental and paleoclimatic observations, and (2) implementation of modeling and associated analysis of abrupt climate change and its potential ecological, economic, and social impacts. What follows is a discussion of recommended research activities to support these two themes. IMPROVE THE FUNDAMENTAL KNOWLEDGE BASE RELATED TO ABRUPT CLIMATE CHANGE Recommendation 1. Research programs should be initiated to collect data to improve understanding of thresholds and nonlinearities in geophysical, ecological, and economic systems. Geophysical efforts should focus especially on modes of coupled atmosphere-ocean behavior, oceanic deepwater processes, hydrology, and ice. Economic and ecological research should focus on understanding nonmarket and environmental issues, initiation of a comprehensive
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Abrupt Climate Change: Inevitable Surprises land-use census, and development of integrated economic and ecological data sets. These data will enhance understanding of abrupt climate change impacts and will aid development of adaptation strategies. A major finding of this study is that the only thing we can be sure of is that there will be climatic surprises. Physical, ecological, and human systems are complex, nonlinear, dynamic and imperfectly understood. Climate changes are producing conditions outside the range of recent historical experience and observation, and it is unclear how the systems will interact with and react to the coming climatic changes. Data Needed to Better Understand the Mechanisms and Triggers of Abrupt Climate Change It is crucial to be able to recognize present or impending abrupt climate changes quickly. This capability will involve improved monitoring of parameters that describe climatic, ecological, and economic systems. Some of the desired data are not uniquely associated with abrupt climate change and, indeed, have broad applications. Other data take on particular importance because they concern properties or regions implicated in postulated mechanisms of abrupt climate change, such as the strength of the Atlantic thermohaline circulation. Research to increase our understanding of abrupt climate change should be designed specifically within the context of the various mechanisms thought to be involved. Focus is required to provide data for process studies from key regions where triggers of abrupt climate change are likely to occur, and to obtain reliable time series of climate indicators that play crucial roles in the postulated mechanisms. Observations could enable early warning of the onset of abrupt climate change. New observational techniques and data-model comparisons (data assimilation) will be required as appropriate. Circulation of the ocean is inferred primarily by combining measurements of water properties with physical understanding of flow. Direct measurements of currents and tracer distributions confirm the inferences. Data limitations, such as the technical difficulty of measuring deep-ocean currents directly, have left some uncertainties, but recent technical advances now allow much improved observations. Collection of more direct data on ocean circulation, together with targeted tracer studies, would reveal characteristics of ocean circulation, including the strength of deep water sources. The new knowledge will help in understanding active processes, such as
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Abrupt Climate Change: Inevitable Surprises deep convection and subduction, and perhaps could provide an early warning of changes in circulation that could lead to an abrupt climate change. If we are to develop predictive capabilities regarding the thermohaline circulation, we must observe its strength and structure. To date, however, no observational network exists to observe the thermohaline circulation on a continuous basis. Systematic, long-term observations of the heat and water fluxes influencing the thermohaline circulation are needed, especially in the areas of Northern Hemisphere deepwater formation. Moreover, remote influences on the thermohaline circulation must be monitored, particularly the low-latitude atmospheric water-vapor transport from the Atlantic to the Pacific and the influence of Southern Ocean changes. The meaning of trends in sea-ice volume and extent and associated freshwater fluxes and how these will affect the potential for abrupt climate change is still debated. The debate is due, in part, to limitations in the data especially on ice thickness. Data collected from submarines provide some insight into changes in Arctic ice, but generation of long-term data is uncertain because of the planned cessation of submarine science cruises. Advancing the science of abrupt climate change requires improved observations of sea-ice extent, thickness, and fractional coverage. The volume and extent of portions of the Greenland and Antarctic ice sheets are known to be changing rapidly, but full coverage by altimetry and interferometric synthetic-aperture radar used to measure thickness and velocity change of ice flow is not yet available, and near-polar holes in other remotely sensed fields miss key parts, especially in Antarctica. Basal conditions of the large ice sheets, and thus their potential for crossing thresholds and leading to rapid climate changes, are known at only a handful of points and with less confidence along limited aerogeophysical flight lines; most of the ice-sheet beds are uncharacterized. Processes beneath the floating extensions called ice shelves, where ice-sheet stability meets deepwater formation, are poorly known. In light of the clear paleoclimatic evidence of abrupt ice-sheet changes affecting global climate and sea level, enhanced emphasis on ice-sheet characterization over time is essential. In addition to the major ice sheets of Greenland and Antarctica, mountain glaciers also offer research opportunities: they are sensitive to climate change and can serve as sentinels of change, so improved monitoring and understanding of these systems is also needed. Land hydrology links the atmosphere to oceans and ecosystems. Most terrestrial rainfall and snowmelt are used by plants, and much of the remainder runs off in rivers, which locally freshen seawater. Terrestrial pre-
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Abrupt Climate Change: Inevitable Surprises cipitation is stored for highly variable periods in surface water, groundwater, glaciers, and ground ice and permafrost. Changes in the total flux of precipitation and in the balance among the components of the hydrological cycle can affect ocean circulation, vegetation types and productivity, and the availability of freshwater for human and ecosystem needs. Despite the obvious importance of the hydrological cycle, surprisingly little is known about total groundwater storage and water quality, trends in recharge and discharge, permafrost evolution (including feedbacks on greenhouse gases), feedbacks related to the generation and persistence of drought, how drought is eventually broken, and related topics. A concerted effort should be made to monitor essential components of the hydrological cycle, as this system is likely to be greatly affected by abrupt changes in climate. Sophisticated systems are available to measure atmospheric properties and circulation, to assimilate new and old data, and thus to characterize the behavior of the atmosphere. Some key data sets, such as those from weather ships, remain vulnerable to funding cuts, and additional sampling in some regions would be useful (NRC, 1999d). Reliable assimilation of well-calibrated data sets is required to characterize gradual and abrupt climate change observed in instrumental records. Furthermore, additional analyses of the instrumental records are needed to identify climatic modes and their long-term behavior. Data Needed to Understand the Effects of Climate Change on Ecological and Economic Systems Understanding of how abrupt climate change will affect economic and ecological systems requires improved monitoring, detection, and measurements of critical components of nonmarket and ecological systems. Monitoring might provide early warning of climate-change effects and help minimize their influence. On the whole, the market economy in developed nations is well monitored in most sectors through national economic measures and accounts. Measures for nonmarket and ecological systems are much less systematic. Various research and monitoring activities should be considered: Efforts to identify plant and animal species should continue because this information is essential for determining extinction rates. High-frequency monitoring of terrestrial ecosystems is needed be
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Abrupt Climate Change: Inevitable Surprises cause this is critical for understanding the consequences of future climatic changes. Sustained monitoring of freshwater and marine ecosystems should be expanded. Alternative fire-monitoring and fire-management approaches should be studied, such as those involving improved coordination with seasonal climate forecasts, fuel data information, and tree thinning practices. Monitoring of wildlife diseases should be increased and collaboration between climate-change ecologists and the infectious-disease researchers should be encouraged. It will also be important to link monitoring efforts in research institutions with databases at the National Wildlife Health Center of the US Geological Survey, the Animal and Plant Health Inspection Service, and the Centers for Disease Control and Prevention. An increased understanding of the important thresholds and nonlinearities in economic and ecological systems will enable better prediction of effects of abrupt climate change. This report has emphasized that the most severe effects of abrupt climate change will occur when thresholds in climatic, ecological, and economic systems are crossed. A research priority is to develop a list of potential thresholds and feedbacks important to abrupt climate change, to quantify the location of the thresholds and strengths of feedbacks, and to improve the monitoring of systems related to these thresholds. It is also important to develop measures of nonmarket economic sectors. Market accounts have been intensively studied and developed, but economic measures of nonmarket sectors have lagged far behind those of market sectors. A recent study by the National Research Council recommended the development of environmental and nonmarket accounts on a priority basis to improve management and understanding of nonmarket systems (Nordhaus and Kokkelenberg, 1999). Better measures of nonmarket sectors would provide necessary data for understanding the vulnerability of such systems to abrupt climate change. One of the major concerns about the potential for ecosystem adaptation to climate change is the fragmentation of landscapes and ecosystems. A comprehensive land-use census is needed (NRC, 2000) to monitor the fragmentation of landscape and ecosystems and to provide information for helping reduce their vulnerability to abrupt climate change. There is no comprehensive census of land use in the United States and other countries. If a
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Abrupt Climate Change: Inevitable Surprises census were undertaken periodically, trends in fragmentation could be tracked, and potential steps to reduce the vulnerability to fragmentation could be better evaluated. The construction of databases to integrate economic, ecological, archeological, and climatic data would help to improve the understanding of the effects of past abrupt climate changes. Some data collection required for better monitoring and understanding of the causes, magnitudes, and effects of abrupt climate change could be done in the private sector under a granting mechanism; other datasets might require federal data-collection efforts. IMPROVE MODELING FOCUSED ON ABRUPT CLIMATE CHANGE Recommendation 2. New modeling efforts that integrate geophysical, ecological, and social-science analyses should be developed to focus on investigating abrupt climate changes. In addition, new mechanisms that can cause abrupt climate change should be investigated, especially those operating during warm climatic intervals. Understanding of such mechanisms should be improved by developing and applying a hierarchy of models, from theory and conceptual models through models of intermediate complexity, to high-resolution models of components of the climate system, to fully coupled earth-system models. Model-data comparisons should be enhanced by improving the ability of models to simulate changes in quantities such as isotopic ratios that record past climatic conditions. Modeling should be used to generate scenarios of abrupt climate change with high spatial and temporal resolution for assessing impacts and testing possible adaptations. Enhanced, dedicated computational resources will be required for such modeling. Developing theoretical and empirical models to understand abrupt climate changes and the interaction of such changes with ecological and economic systems has a high priority. Modeling is essential for collaborative research between physical, ecological, and social scientists, and much more effort in the development of accurate models will be necessary to produce a useful understanding of abrupt climate processes. Model analyses help to focus research on possible causes of abrupt climate change, such as human activities; on key areas where climatic thresholds might be crossed; and on fundamental uncertainties in climate-system dynamics. Most analyses have considered only gradual climate change; given the accumulating evidence of
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Abrupt Climate Change: Inevitable Surprises abrupt climate change and of its capacity to affect human societies, more attention should be focused on improving climate and impact-assessment models and on producing model scenarios involving abrupt climate change. Climate models that are used to test leading hypotheses for abrupt climate change, such as altered deep-ocean circulation, can only partially simulate the size, speed, and extent of the large climatic changes that have occurred. The failure to explain the climate record fully suggests either that the proposed mechanisms being used to drive these models are incomplete or that the models are not as sensitive to abrupt climate change as is the natural environment. It is also of concern that existing models do not accurately simulate warm climates of the past. Improved understanding of abrupt climatic changes that occurred in the past and are thus possible in the future can be gained through enhancements of climate models. A comprehensive modeling strategy designed to address abrupt climate change should include vigorous use of a hierarchy of models, from theory and conceptual models through models of intermediate complexity, to high-resolution models of components of the climate system, to fully coupled earth-system models. The simpler models are well suited for use in developing new hypotheses for abrupt climate change and should focus on warmer climates, because warming is likely. Because reorganizations of the thermohaline circulation have never been demonstrated in climate models employing high-resolution ocean components, improving the spatial resolution in climate models assumes high priority. Complex models should be used to produce geographically resolved (to about 1° of latitude by 1° of longitude), short-time (annual or seasonal) sensitivity experiments, and scenarios of possible abrupt climatic changes. Long integrations of fully coupled models under various forcings for the past, present, and future will be required to evaluate the models, assess possibilities of future abrupt changes, and provide scenarios of those future changes. The scenarios can be combined with integrated-assessment economic models to improve understanding of the costs for alternative adaptive approaches to climate change with attention to the effects of rising greenhouse-gas concentrations and nonclimatic factors, such as land use changes and urbanization. Model-data comparisons are needed to assess the quality of model predictions. It is important to note that the multiple long integrations of enhanced, fully coupled earth-system models required for this research are not possible with the computer resources available today, and thus, these resources should be enhanced. Ecologists and social scientists should use relevant scenarios of abrupt
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Abrupt Climate Change: Inevitable Surprises climate change for their modeling. An important reason why there have been so few studies on the impacts of future abrupt climate change is that climate scientists have provided social scientists little to work with; only the cooling events of the Little Ice Age and the Younger Dryas have been extensively analyzed, and the database on these remains inadequate. Complicating the issue is the uncertainty of how probabilities of abrupt climate change will be affected by increasing greenhouse-gas concentrations and by nonclimatic factors, such as trends in land and water use and urbanization. Many economic models require high-resolution climatic and ecological data as inputs. A useful target of spatial resolution is 1° of latitude by 1° of longitude, annual or seasonal temporal resolution, and temperature and precipitation as a minimum for climatic variables. Up to now, scenarios at this resolution have been prepared only for gradual climate change; to be useful in developing impact analyses and projections, such high-resolution scenarios will be necessary for a variety of scenarios of abrupt climate change. IMPROVE PALEOCLIMATIC DATA RELATED TO ABRUPT CLIMATE CHANGE Recommendation 3. The quantity of paleoclimatic data on abrupt change and ecological responses should be enhanced, with special emphasis on: Selected coordinated projects to produce especially robust, multiparameter, high-resolution histories of climate change and ecological response. Better geographic coverage and higher temporal resolution. Additional proxies, including those that focus on water (e.g., droughts, floods, etc.). Multidisciplinary studies of selected abrupt climate changes. Abrupt climate change is evident in model results and in instrumental records of the climate system, but much of today’s interest in the subject was motivated by the strong evidence in paleoclimatic archives of extreme changes. Proxy records of paleoclimate are central to the subject and will continue to be so for some time. Available paleoclimate records provide information on many environmental variables, such as temperature, moisture, and wind speed and direc-
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Abrupt Climate Change: Inevitable Surprises tion. Temporal resolution ranges from subannual to multimillennial. Dating uncertainties are in a similar range. Many of the limitations on the climatic variables that can be reconstructed, their time resolution, and dating uncertainty are set by nature, but others are related to available resources. With more resources and effort, it will be possible to advance our understanding of abrupt climate change (NRC, 1999c). Intensive, multiparameter, often multi-investigator projects can be especially valuable. As one example, in the ice-core projects from central Greenland, duplication of the measurements by independent international teams provides exceptional confidence in most data and reveals which datasets do not warrant confidence. Sampling at very high time resolution to produce datasets complementary to those of other investigators gives an exceptionally clear picture of past climate. Such projects require more funding and effort than are typical of paleoclimatic research, but they provide an essential reference standard, or “type section,” of abrupt climate change to which other records can be compared. A difficulty is that this reference standard is from one place in high northern latitudes and is inappropriate for study of much of the climate system. Not all paleoclimatic records can be studied in the same detail as those from Greenland, but generation of at least a few similar highly resolved (preferably annually or subannually) reference standards, including a North Atlantic marine record comparable with Greenland records, would be of great value. The ultimate goal is to develop a global network of records with at least decadal resolution. Terrestrial and marine records of climate change and ecological response from the regions of the western Pacific warm pool (the warmest part of the global climate system) and the Southern Ocean and Antarctic continent (the southern cold pole of the climate system) are among the most critical targets for future paleoclimate research, including generation of reference standards. Temperature is probably the easiest climatic variable to measure, and the public often focuses on it. But water availability over land is probably more important to economic and ecological systems. Focus on measures of precipitation, evaporation, and the quantitative difference between them is particularly important. For investigations of circulation involving the deep ocean, reconstructions of water-mass density in polar and subpolar regions are central. More broadly, improved efforts to develop and calibrate more proxies for additional paleoclimatic indicators are required to understand past changes fully. Traditional “time-slice” reconstructions (e.g., the world 6,000 years ago) have provided insight into climate processes but are not the best ve-
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Abrupt Climate Change: Inevitable Surprises hicle for studying abrupt climate changes. Time-slices run the risk of mixing observations from just before and just after regional or larger abrupt changes. However, pending the still distant availability of high-time-resolution global maps of climate for all periods, anomaly-mapping efforts (e.g., perhaps DryMAP for the Younger Dryas, 8MAP for the event about 8,200 years ago, and LIMAP for the Little Ice Age) would be of considerable value. Similar studies of megadroughts are especially important. These efforts need to focus on the spatial and temporal variability of climatic changes and the resulting economic and ecological impacts. To place the warming and associated changes of the last hundred years in context and compare them with natural fluctuations, focus on the last 2,000 years is required. IMPROVE STATISTICAL APPROACHES Recommendation 4. Current practices in the development and use of statistics related to climate and climate-related variables generally assume a simple, unchanging distribution of outcomes. This assumption leads to serious underestimation of the likelihood of extreme events. The conceptual basis and the application of climatic statistics should be re-examined with an eye to providing realistic estimates of the likelihood of extreme events. The term “climate” implies a relatively persistent set of environmental conditions. Because of this, some early reports of “abrupt climate change” were considered oxymorons, because if climate is a 30-year average, it cannot change in less than 30 years. This underscores the difficulty in recognizing, documenting, and discussing abrupt climate change. The difficulty is exacerbated by the observation of increased variability in some records near climate transitions and by the tendency of people to observe mode shifts in system behavior when only normal, uncorrelated random behavior is involved (Albright, 1993). Many societal decisions are based on assumptions about the distributions of extreme weather-related events. Large capital projects—such as dams, airports, tunnels, subway systems, roads, levees, hydroelectric projects, and bridges—have embedded safety margins that are derived from data and assumptions about the frequency distribution of floods, hurricanes, storms, precipitation, and snowpacks. Many economic and business decisions depend on explicit or implicit assumptions about the distribution
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Abrupt Climate Change: Inevitable Surprises of weather-related events; examples of such decisions include the ratings of catastrophe bonds or weather derivatives; calculations that statisticians use to adjust data for seasonal effects; and public and private decisions made in agriculture, insurance, reinsurance, health (e.g., disease), fire control, and ecosystem management. Many of the decisions are based on statistical calculations that are appropriate for stationary climates. One well-known example is the widespread use of “30-year normals” in deriving climate data for individual locations. On the whole, these assumptions are reasonable, if imperfect, rules of thumb to use when the variability of weather is small and climate is stationary. If some parameter related to climate, such as runoff, follows normal distributions with known and constant means and standard deviations, businesses and governments can reasonably use current practices. However, in light of recent findings related to nonstationary and often highly skewed climate-related variables, current practices can be misleading and result in costly errors. An event that is estimated to be a “500-year flood” or a “500-year fire” can be found to occur every 100 or 50 or 20 years if the averages and the variabilities are significantly misestimated. The potential for abrupt climate change and the existence of thresholds for its effects require revisions of our statistical estimates and practices. We have not attempted to compile a list of all the places where society estimates or uses the assumption of a stationary and stable climate; such an effort would be enormous, and lies outside the committee charge. Rather, we believe that the time is ripe to examine this issue, develop improved methods, and develop improved estimates of the likelihood of extreme events. INVESTIGATE “NO-REGRETS” STRATEGIES TO REDUCE VULNERABILITY Recommendation 5. Research should be undertaken to identify “no-regrets” measures to reduce vulnerabilities and increase adaptive capacity at little or no cost. No-regrets measures may include low-cost steps to: slow climate change; improve climate forecasting; slow biodiversity loss; improve water, land, and air quality; and develop institutions that are more robust to major disruptions. Technological changes may increase the adaptability and resiliency of market and ecological systems faced by the prospect of damaging abrupt climate change. Research is particularly needed to assist poor countries, which lack both scientific resources and economic
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Abrupt Climate Change: Inevitable Surprises infrastructure to reduce their vulnerabilities to potential abrupt climate changes. This report emphasizes that social and ecological systems have long dealt with climate variability. Societies have taken many steps over the years, decades, and millennia to reduce their vulnerability to the effects of climate change, and ecosystems have weathered ice ages and extreme climatic events, such as the Younger Dryas. To some extent, it might be possible to reduce vulnerability and increase adaptation at little or no cost, by nudging research and policy in directions that will increase the adaptability of systems (NRC, 1992). Put differently, some current policies and practices may be ill advised and may prove inadequate in a world of rapid and unforeseen climatic changes. Improving such inadequate policies would be beneficial even if abrupt climate change turns out to fit a best-case, rather than a worst-case, scenario. Societies would have “no regrets” about the new policies, because they will be good policies in fair as well as in foul weather. This report cannot provide a complete catalog of potential no-regrets options, but a few areas of interest are highlighted below. Research in these areas may lead to useful policy recommendations. Energy policies. Earlier National Research Council reports have identified policies that would slow climate change with low or even negative costs. For example, the phaseout of chlorofluorocarbons over the last 2 decades and replacement with gases with typically shorter atmospheric lifetimes has reduced the US contribution to global warming while also reducing future health risks posed by ozone depletion (NRC, 1992). Furthermore, moving away from coal-burning toward other fuels, particularly natural gas, would reduce greenhouse-gas emissions and some effects on health and the environment, and might prove beneficial in the long term. Ecological policies. In land-use and coastal planning, managers may be helped by information on the effects on ecosystem services of nonlinear future changes in climate. Scientists and government organizations at various levels could collaborate to develop and implement regulations and policies that reduce environmental degradation of water, air, and biota. Conservation measures related to land and watersheds may reduce the rate of biotic invasions, and management strategies may limit the spread of invasions. The economic and ecological costs of disease emerging from abrupt climate change may help guide response. Forecasting of weather and weather-related events. Hurricanes and other storms can have large impacts. Climate scientists are uncertain how
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Abrupt Climate Change: Inevitable Surprises climate change will affect the frequency and intensity of severe storms, but changes are possible, and societies can reduce vulnerabilities through improved forecasting. It is striking that, although normalized property damages caused by hurricanes in the United States in the twentieth century did not decline (because most houses cannot move when hurricanes are forecast), the loss of life was markedly reduced because better forecasting allowed people to evacuate. Institutions. One of the most promising options is to conduct research leading to the development of improved institutions that will allow societies to withstand the greater risks that could be associated with abrupt climate change. Three examples—water systems, insurance, and statistical data—highlight the possibilities: Water systems. Most evidence points to the likelihood that water systems will be severely stressed in the coming decades, and marginal regions face the possibility of droughts. Research can help identify better ways to manage water, such as the use of water markets or other flexible or innovative approaches that might prove to be useful strategies under scenarios of abrupt climate change (Intergovernmental Panel on Climate Change, 2001a). Insurance. An important way that individuals or even countries can adapt to extreme events is through insurance against the ruinous effects of fires, floods, storms, and hurricanes. In essence, the existence of insurance promotes risk-taking behavior. Because losses from some of these risks are highly skewed, insurance payouts from time to time will be extremely large and will threaten to exhaust the reserves of insurance companies. Through the development of new instruments, such as weather derivatives and catastrophe bonds, markets can accommodate extreme events. One important adaptation would be the development of better instruments to spread the large losses ($50 billion and up) attributed to extreme weather and other events; they should be priced realistically to reflect the risks to discourage excessive risk-taking. Research into the value of such better instruments is needed. Statistical data. Analysis of statistical data may help identify beneficial, low-cost ways to reform rules concerning flood-plain and coastal management.
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Abrupt Climate Change: Inevitable Surprises FINAL THOUGHTS Because of the strength of existing infrastructure and institutions, the United States and other wealthy nations are likely to cope with the effects of abrupt climate change more easily than poorer countries. This does not mean that developed countries can remain isolated from the rest of the world, however. With growing globalization, adverse impacts—although likely to vary from region to region because exposure and sensitivity will vary—are likely to spill across national boundaries, through human and biotic migration, economic shocks, and political aftershocks. Thus, even though this report focuses primarily on the United States, the issues are global and it will be important to give attention to the issues faced by poorer countries that are likely to be especially vulnerable to the social and economic impacts of abrupt climate change. The United States is uniquely positioned to provide both scientific and financial leadership, and to work collaboratively with scientists around the world, to gain better understanding of the global impacts of abrupt climate change as well as reducing the vulnerability and increasing the adaptation in countries that are particularly vulnerable to these changes. Many of the recommendations in this report, although currently aimed at US institutions, would apply throughout the world.
Representative terms from entire chapter: