Tag Archives: Richard Betts

Richard Betts and the 2 Degree Threshold

The climate skeptic and denier blogs have been awash with the blog comments left by Richard Betts on the skeptic site Bishop Hill. Betts is Head of Climate Impacts at the Met Office and one of the key contributors to the ground-breaking ‘4 Degrees and Beyond‘  conference held in Oxford in 2009 and the subsequent set of formal academic papers published by the Royal Society (see here).

I only occasionally frequent the skeptic blogs for the reason that they rarely manage to convey both sides of the argument. An intellectual prerequisite of any successful hedge fund manager is the ability to assimilate and assess an investment thesis from all angles: if your initial judgement is that a particular stock or bond is a ‘buy’, the first thing you do is go and read every piece of research that suggests it is a ‘sell’. To put it bluntly, if you invest your money with a portfolio manager who does not have this discipline as some part of their investment  process, you are a fool and deserve to lose your money.

Keeping this in mind, the blogosphere is rife with analysis by persons who not only don’t try to understand the merits of the opposing argument, but frequently don’t even bother reading them.

So what had me trawling through the comments on Bishop Hill (the original post can be found here, and Betts is active in the comments sections as well)? Well this attack on the concept of ‘dangerous’ climate change:

Most climate scientists do not subscribe to the 2 degrees “Dangerous Climate Change” meme (I know I don’t). “Dangerous” is a value judgement, and the relationship between any particular level of global mean temperature rise and impacts on society are fraught with uncertainties, including the nature of regional climate responses and the vulnerability/resilience of society. The most solid evidence for something with serious global implications that might happen at 2 degrees is the possible passing of a key threshold for the Greenland ice sheet, but even then that’s the lower limit and also would probably take centuries to take full effect.

Andrew Revkin, the New York Times opinion writer on all things environment and climate change in his Dot Earth column asked Betts to amplify his thoughts. Betts reply is worth reading in its entirety and can be found here. However, here are a couple of the most important passages:

The science suggests that, by and large, the risk of major negative impacts of climate change increases with higher levels of global warming. However, this in itself is not enough to define what level of warming is “dangerous,” especially since the projections of actual impacts for any level of warming are highly uncertain, and depend on further factors such as how quickly these levels are reached….., and what other changes are associated with them.

And then critically,

With such uncertainties, it’s all down to attitude to risk — “dangerous climate change” should be defined in the context of the level of risk that is considered acceptable. It’s a judgment call.

A deep dive into the comments in the original Bishop Hill post throws further light on what Betts actually means—and what he doesn’t mean. To a another commentator’s claim that Betts has admitted that the 2 degree meme is ‘in no way dangerous’, Betts has this to say:

 You are wrong, I didn’t say that. What I actually said was:

“While really bad things may happen at 2 degrees, they may very well not happen either – especially in the short term (there may be a committment to longer-term consequences such as ongoing sea level rise that future generations have to deal with, but imminent catastrophe affecting the current generation is far less certain than people make out. We just don’t know.”

He follows this with the following comments that comes close to encapsulating my own view of how climate change should be viewed: that is, through a prism of probabilities and outcomes. In Betts words:

As I think I’ve said before, it’s all down to attitude to risk. Uncertainty works both ways – large uncertainties mean there are risks at the bad end, including the possibility of low-probability, high-impact outcomes. Given that we don’t know what the risk is, but think it is non-zero, do we take action to reduce that risk? That’s a political decision not a scientific one, and will rely on judgement calls (like most complex decisions, political or otherwise). I’m just saying that having made that judgement call, the science should not then be skewed to support it, as this could then influence other important decisions in undesireable ways. The uncertainties are large and we have to recognise that, formulate policy accordingly and be sure that scientific evidence appropriate informs several different policy areas that may rely on it.

Where I think I disagree with him is in the idea that climate scientists can remain honest, neutral and detached brokers of impartial information, with politicians making all the judgment calls. The politicians are floundering with the complexities of climate change as things stand anyway. But that is a topic for another post.

Defining the Tail Risk

When looking at risk, financial industry professionals will generally start at the tail; in other words, those unlikely but highly hazardous outcomes that reside at the ends of the distribution of all possible outcomes.  In simple terms, if you invest in stocks, bonds or derivatives, then what is the likelihood of a really bad market move taking place—one that will at best stop you sleeping at night or at worst get you fired.  To think about these things is a precondition for long-term survival in the financial industry, and it is certainly not alarmist.

Unfortunately, few people in the financial industry (who are trained to deal with the concept of risk), let alone the general public, take this method of thinking over to climate change—a lack of foresight that could be highly detrimental to their financial and even physical health.

But at what probability does an outcome, and associated consequence, become significant enough to act upon? The life insurance industry gives us some idea. The United States Centre for Disease Control (CDC) puts out a publication called the National Vital Statistics Reports in which it aggregates and analyses mortality data for the United States. In their latest report dated March 16, 2011 they analyse the 2009 data set (most up-to-date figures) and you can find mortality rates by age in Table 1. An extract is given here:

Critically, the life insurance industry is an industry of tail risk. The average American in their late 20s has only a 0.1% chance of dying in any given year and those in their late 50s 0.5%. Yet the latest figures from the life insurance industry’s think tank LIMRA show that 70% of US households have some type of life insurance (of which 44% are individual policies). For those households with children, the numbers are even high: 81% for Generation Y’ers rising to 91% for Baby Boomers.The industry has been in a bit of a panic recently because overall life insurance ownership has been on a gradually declining trend over the longer term, but the fact is that the majority of Americans understand the long-tailed risks of a major breadwinner in the family dying and actually do something about it. In sum, faced with the tail risk of death, adults buy life insurance to manage the risk, especially those people who have children.

Before we look at the tail risk of climate change, it is important to note that life insurance does not hedge against the risk of death: if you die, you are still dead regardless as to whether you own life insurance. What you are really insuring against is not your own death but the sustainability of your family’s prospects after your death. The realisation is that if you die without life insurance, your family will have a degraded life path. In the case of your children, this may, for example, mean reduced educational opportunities that will have negative consequences for their entire life. So actually the act of buying life insurance shows a high degree of concern for the quite distant future as not only are you thinking about a time horizon covering the insurance policy in question but also an even more distant time horizon that encompasses your family’s well being much further into the future after you have gone.

So let’s take a family with children and have a look at the tail risk of climate change. Well, if you have children, then their working lives will likely encompass the 2020s to 2060s, and their life expectancy will likely take them to the end of the century. What is the climate-related tail risk they face over that time period? The answer appears to be a far higher risk than that associated with the loss of a bread-winning parent during childhood. A paper by Richard Betts et al in the UK Royal Society’s flagship journal (that can be found here) spells it out:

The evidence available from new simulations with the HadCM3 GCM and the MAGICC SCM, along with existing results presented in the IPCC AR4, suggests that the A1FI emissions scenario would lead to a rise in global mean temperature of between approximately 3◦C and 7◦C by the 2090s relative to pre-industrial, with best estimates being around 5◦C. Our best estimate is that a temperature rise of 4◦C would be reached in the 2070s, and if carbon-cycle feedbacks are strong, then 4◦C could be reached in the early 2060s—this latter projection appears to be consistent with the upper end of the IPCC’s likely range of warming for the A1FI scenario.

A1FI is the high carbon emissions scenario prepared for the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (AR4), which is also the emissions trajectory we are currently following owning to the general failure of carbon emission mitigation efforts made by governments around the globe to date. A description of the scenarios can be found here.

At the time of the Copenhagen Accord in 2009, the international community made a commitment to ‘hold the increase in global temperature below 2 degrees Celsius’ from pre-industrial revolution levels (we are up around 0.8 degrees Celsius now). Further, that two degree Celsius degree line is already deemed by mark the border between ‘dangerous climate change’ and ‘extremely dangerous climate change’ (see the Anderson and Bows paper at the Royal Society link above). The IPCC’s famous burning embers diagrams (updated chart below taken from the NYT here) adds some detail to the likely impacts. In short, we will rapidly progress up to the top of the bars shown below (click for larger image).

In sum, as the world temperature likely rises above the two degree Celsius level in most of our life times and probably moves to four degrees and beyond in our children’s life times based on the current emissions trajectories, we will all experience ‘extremely dangerous climate change’. The idea of ‘extremely dangerous climate change’ within the framework of risk is something I will leave to the next post. Suffice as to say, at a four degree global surface temperature mean warming, we will see the global land mean temperature rise by five to six degrees, a six to eight degrees rise in China, an eight to 10 degree rise in Central Europe and a 10 to 12 degree rise in New York (see here). With these kinds of changes, the planet our parents were born into will not be the same as the planet our children mature into.

Extremely dangerous climate change is, however, a risk that we cannot insure against, rather it is something that we can only respond to through mitigation, adaption or suffering. But first we have to recognise the reality for what it is.