The Finance Ministry of the world’s biggest energy exporter has started preparing for the possibility of lower budget revenues in case global oil demand declines sooner than expected. A drop in mobility due to the coronavirus has coincided with increased efforts to combat climate change this year to completely alter the outlook for fossil fuel demand. BP Plc became the first major oil giant to admit in September that oil consumption may never return to levels seen before the pandemic. Since then China and the U.S., the world’s two biggest economies, have stepped up commitments to transition to clean energy.
As scientists and scholars from around the world, we call on policymakers to engage with the risk of disruption and even collapse of societies. After five years failing to reduce emissions in line with the Paris climate accord, we must now face the consequences. While bold and fair efforts to cut emissions and naturally drawdown carbon are essential, researchers in many areas consider societal collapse a credible scenario this century. Different views exist on the location, extent, timing, permanence and cause of disruptions, but the way modern societies exploit people and nature is a common concern.
Companies have a key role to play in building societal resilience to crises, including the current pandemic and climate impacts, across their value chains. Some priority actions businesses can take to build resilience include conducting supply chain risk assessments; understanding future scenarios; and understanding how the people in business and vital communities are affected.
What will the Earth look like thirty years from now? To a discomfiting extent, the future has already been written. Yet it is difficult to predict with any degree of certainty how hot it might get, and precisely what the corresponding consequences will be. This is why the scenarios that Riskthinking.Ai has developed, which not only enable the exploration of different plausible futures, but price climate-related financial risk, are so valuable.
A report commissioned by federal regulators overseeing the nation’s commodities markets has concluded that climate change threatens U.S. financial markets, as the costs of wildfires, storms, droughts and floods spread through insurance and mortgage markets, pension funds and other financial institutions. Riskthinking helps decision-makers better understand the climate-related financial risks they face and respond accordingly.
Although this article is a year old, the information is still highly relevant: Climate scenarios provide a consistent set of possible future conditions to inform analyses of the risks posed by climate change. They are invaluable tools for making decisions in the face of radical uncertainty, particularly when they are underpinned by Structured Expert Judgement (SEJ), artificial intelligence (AI) and machine learning (ML) as are Riskthinking.AI’s.