IAA and IPCC release ‘Climate Science: A Summary for Actuaries’

The International Actuarial Association (IAA) and the International Panel on Climate Change (IPCC) have released a paper entitled Climate Science: A Summary for Actuaries – What the IPCC Climate Change Report 2021 Means for the Actuarial Profession. The paper summarises the IPCC’s Sixth Assessment Report (AR6) Working Group I (WGI) report in a manner tailored for the actuarial community.

The report and related materials may be found at:

The IAA and IPCC will hold a complimentary webinar to introduce the paper on 13 April 2022 at 10:00pm AEST to present this publication.

The paper is one of a small number of special reports the IPCC has produced for specific stakeholders. Its purpose is to focus the vast amount of material produced by the IPCC in the AR6 WGI stream on issues most relevant to actuaries. That the IPCC would take the time to work with actuaries on a special report shows that the actuarial community is an important stakeholder in climate risk analysis.

The paper was produced by a combined team of IAA actuarial volunteers, several prominent catastrophe modelling experts from the reinsurance community recruited by the IAA, and scientists from the IPCC WGI team. The IAA team included people from Australia, Canada, Europe, Japan and the United States.

The Actuaries Institute was represented by Rade Musulin, who was a lead author, and Sharanjit Paddam, who was a contributing author. This continues the Institute’s leading role in developing actuarial skills and profile on climate risk globally, which has included significant contributions to other IAA climate risk papers and guidance for Appointed Actuaries in Climate Change – Information Note for Appointed Actuaries, which was the first such document issued by an actuarial association.

The IPCC AR6 WGI report was focused on the scientific analysis of climate change, Climate Change 2021:The Physical Science Basis. AR6 will produce two other major reports, WGII on Impacts, Adaptation and Vulnerability and WGIII on Mitigation of Climate Change. The WGII report was just released and the WGIII report is expected later this year or in early 2023.

The IAA paper opens with the key messages from the WGI report, which are the strongest yet:

  • For decades, we have known that the world is warming. Recent changes in the climate are widespread, rapid, and intensifying. They are unprecedented in thousands of years.

 

  • It is indisputable that human activities are causing climate change. Human influence is making extreme climate events, including heatwaves, heavy rainfall, and droughts, more frequent and severe.

 

  • Climate change is already affecting every region on Earth, in multiple ways. Its effects will increase with further warming.

 

  • There is no going back from some changes in the climate system. However, some of these changes could be slowed and others could be stopped by limiting future warming.

 

  • Unless there are immediate, rapid, and large-scale reductions in greenhouse gas emissions, limiting global warming to 1.5°C or even 2°C relative to 1850–1900 (preindustrial levels) will not be possible.

 

  • To limit global warming, strong, rapid, and sustained reductions in emissions of carbon dioxide, methane, and other greenhouse gases are necessary. This would not only reduce the consequences of climate change but also improve air quality.

 

The paper then goes on to review the language the IPCC uses to communicate uncertainty, the current state of the climate, evidence human activity is responsible for climate change, trends in extreme weather and future climate change. It also covers the relationship of Shared Socio-economic Pathways (SSPs) and Representative Concentration Pathways (RCPs), how to use and interpret near-term climate information, future regional changes and ways to limit climate change. The paper has several Annexes, covering how to use the climate data from the IPCC, the IPCC’s ‘interactive Atlas’ and a glossary of key terms.

Institute members interested in climate risk should review this paper to get a clear guide to the science behind climate change. This is an excellent educational resource for the profession and the public.

CPD: Actuaries Institute Members can claim two CPD points for every hour of reading articles on Actuaries Digital.

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