Explainer: why we need to look at climate risk over five-year intervals

At Cervest, we recommend assessing climate risk over five-year intervals to help organizations make confident, informed decisions that enhance the resilience of their assets. Why is assessing climate risk over five-year intervals recommended by climate scientists as best practice? The reason is to account for variability in the Earth’s climate system.

To explain further, let’s start with the difference between climate and weather. Weather describes short-term changes in atmospheric conditions, whereas climate describes the typical weather conditions in an entire region, over a long time. In statistical terms, the climate is an average of weather conditions, over time. For example, when you think about the climate in the place you live, you might think of the mild, wet winters, and long, hot summers you typically experience. But when you think of the weather, you might think of the downpour of rain you saw in the previous hour, or how hot the afternoon is.

Climate change describes how increasing levels of greenhouse gasses in our atmosphere are driving changes to typical weather conditions over the long term. It is the long-term changes to weather patterns that drive the increased frequency and intensity of the weather events we experience today, such as extreme heat waves and drought. To understand asset-level climate risk, it’s the longer-term average changes that we are interested in.

Our customers want to understand how climate change could impact typical weather patterns and the likelihood of extreme weather events. They also want to understand how this varies across different potential future climate scenarios. How does climate change affect my assets if we manage to limit warming to less than 2C in line with the Paris Agreement? How will climate change affect my assets under a fossil fuel-intensive economy?

For example, imagine you are a city water manager. You’ll need to know if there is enough rain to replenish the aquifers and supply adequate drinking water to the community. You’ll also need to know how likely it is that several days of heavy rainfall might exceed the capacity of the city's water drainage system – and cause flooding. City planners need this information to decide whether the city’s infrastructure needs adapting, to cope with more frequent heavy rainfall events. You might use weather forecasts to see how much rain is expected to fall on any one given day, but you need climate projections to develop long-term plans that meet the city’s need for water resources.

Earth’s climate system is quite very sensitive to change. This means that day-to-day, small changes in atmospheric conditions can result in large changes over time. You may be familiar with the concept of the ‘butterfly effect’. This internal sensitivity is why weather forecasts are only accurate a couple of weeks ahead, and why climate scientists can anticipate that the risk of heatwaves in the UK will become increasingly likely over the next 20 years – but are unable to pinpoint the exact day, time, or location they will occur.

To provide our customers with the climate risk insights they need, we use detailed models to look at how the climate system behaves over time. With our climate models, we capture the natural fluctuations in the climate system, rather than the day-to-day weather changes. This means that the statistical techniques we use need to account for the “noise” in our signal – created by natural variability in our climate system.

In the UK, we experience four seasons over the course of the year, where the temperature we experience varies. In 2022, the lowest temperature recorded in the UK was - 17.3C and the hottest temperature was 40.3C. These extremes are important information but they don’t tell the full story. When we look at temperature averages in the UK, this is where we see how long-term temperature averages are being impacted by climate change. As well as annual variability, we also need to account for climate variability driven by climate patterns such as El Niño and La Niña, where a cycle of warm and cool sea surface temperatures drive periodic shifts in local climates every few years.

Climate variability happens over shorter time periods than the ones we are interested in when trying to understand the potential impacts of climate change on long-term weather patterns. We use a five-year time step to account for climate variability. At a five year time-step, we reduce the noise so we can pick out the underlying climate trends that create the conditions for extreme weather events, whilst still providing decision-useful information on a timescale relevant to our users.

Cervest’s climate intelligence product, EarthScan™, enables organizations to screen thousands of assets for physical climate-related risk and report on the greatest risks and opportunities on-demand. By providing five-year intervals, EarthScan can gauge internal and interannual variability. It can provide more robust information on how climate change is impacting the likelihood of climate hazards occurring at a given location – and provide risk management, mitigation, and adaptation specialists with more concrete information for future sustainability planning.

Download our How companies are using climate intelligence to move from discussion to action on climate commitments ebook to learn more.