Climate change could add around 20% to the global cost of extreme weather events by 2040, according to early findings from Cambridge researchers.
The findings come from the Cambridge Climate Change Business Risk Index, a new component of the Cambridge Global Risk Index, developed by the Centre for Risk Studies, with Cambridge Zero and British Antarctic Survey. The initial results are announced today (26 February) at an event for business leaders and climate scientists at University of Cambridge Judge Business School.
The index incorporates climate model output to analyse and quantify the increasing risks of extreme weather events, and their potential to disrupt business operations and supply chains globally. Today’s event is designed to provide a platform for climate scientists to consult with the business community and ensure that final outputs meet business needs.
For example, the index shows that, by 2040, businesses in Chicago can expect an increase of between 32 and 35 days annually with a maximum temperature exceeding 25ºC, and an increase of between 5 and 16 in the number of days exceeding 30ºC. It’s also expected that climate change will add around 20% to the global cost of extreme weather events (storms, floods, heatwaves, droughts). Indeed, it’s estimated that extreme weather events will increase from reported losses at present running at an average of around $195 billion a year in direct costs, to $234 billion by 2040, an increase of $39 billion a year at today’s values.
If the indirect costs from supply chain disruption and other knock-on economic consequences are factored in, it is possible that climate change could add over $100 billion of loss each year to the global economy.
Accurately quantifying this kind of information on business-relevant timescales will help businesses plan for their increased exposure to heatwaves and other climate-related risks.
Climate change is a growing concern for businesses. Many corporations are trying to understand how it is likely to affect them, the actions that they may need to undertake for sustainability as well as commercial and competitive reasons, and the regulatory requirements or other liabilities they may face.
Dr Andrew Coburn, Chief Scientist at the Centre for Risk Studies, says:
“Companies are struggling to reconcile the long range forecasts of the consequences of a warmer planet in several decades’ time, with weather changes that are already impacting their businesses in various ways, and how their business will be affected by the transitions that society is making today towards a low-carbon economy”.
Dr Scott Hosking, climate scientist and Head of the AI Lab at British Antarctic Survey, says:
“To tackle the climate emergency businesses and the climate scientists must come closer together. This event aims to take those conversations to the next level, through the announcement of a new index to help make informed business decisions to mitigate the risks related to future climate change. We will also start to map out a wider vision for new ways of working together, including the use of open Cloud computing and AI algorithms which are vital for processing the vast and various volumes of data needed to make robust, transparent and actionable information tailored for business.”
Dr Emily Shuckburgh OBE is the Director of Cambridge Zero. She explains:
“Cambridge Zero provides an opportunity for the University’s research expertise to contribute information and tools for use by businesses, as well as policymakers and other stakeholders”.
Today’s event brings together business executives with climate scientists to help improve the dialogue between the two, with the aim of allowing businesses to articulate what they need from the science to aid their business decisions, and for scientists to help businesses understand the risks that they face and to provide information and data in formats that businesses can readily consume.
The event is hosted by the Cambridge Centre for Risk Studies, in collaboration with Cambridge Zero, British Antarctic Survey, Cambridge Institute for Sustainability Leadership, Hughes Hall Centre for Climate Change Engagement, and Chapter Zero.