Using the Risk Management Process to Address Global Warming
I’m a trained project manager with a project management certification or PMP. As such, part of my PMP training includes risk management, a process used in industry to manage the prospective risks or uncertainties encountered during a project. After reviewing the discussion on global warming I’ve come to a conclusion that risk management needs to be applied to the global warming debate. Risk management provides an approach to dealing with an issue that has some probability of occurrence and has the potential for devastating consequences. If you know something is definitely going to happen it’s easier to weigh the costs and make a decision to deal with the consequences if they’re bad enough to warrant action. It becomes more difficult to deal with the consequences of something that might happen. In the latter case, you have to weigh the costs of mitigating something that might not happen (and therefore you’ve wasted the money) versus not doing something and dealing with the consequences. The tradeoff is like determining to purchase insurance.
The idea of my applying risk management to global warming came about during my involvement in a number of LinkedIn group discussions centering on whether global warming/climate change is real or not, and to what degree humanity is responsible for it. Some of the discussions occurred in LinkedIn discussion groups representing science organizations, or at least people interested in science, and were quite technical in nature. The discussions delved into interpretation of geological data particularly from ice cores and evidence of past climate cycles. In the discussions, it seemed to me the term global warming referred to human-influenced changes in climate, while climate change is used for natural, long term changes in climate.
The media has reported that a majority of climate scientists support the idea of human-influenced global warming. In these LinkedIn discussions I observed the scientific opposition centered on the interpretation of geological data, and the lack of validation of climate models. It was pointed out in the LinkedIn discussions that the primary climate prediction model is in its 11th generation of iteration and we’re still not accurately modeling what has occurred already, no less the future. A recent article in the NY Times confirmed that the simulations are struggling, not because they’re wrong, but because they are limited by the complexity of the system and also by current computer capabilities.
To me, with my experience as an engineering project manager, it comes as no surprise that computer models and simulations sometimes don’t match measured data perfectly. The more complex a system, the more difficult it is for a computer model to perfectly match real world data. In some instances, as in the case of climate modelling, it becomes an iterative process, where each successive version of the model gets closer to the data as the modelers gain a better understanding of the physics, i.e., the response, of the system to various inputs. Sometimes, if a system is complex enough, it becomes a matter of available computer power. However, even when the model correlation to the data isn’t perfect, the simulations can be used to predict data trends. The models then become qualitative tools to help make decisions concerning a course of action.
Climate models are among the most complicated of all technical simulations, requiring the most powerful computers we have. I expect it will be a while before we can solve these models with a fine enough grid to get us the answers we need. Problem is, while we’re waiting, the Earth may be changing.
Prompted by the discussions and my thought of applying risk management to global warming I did research into the consequences of global warming, focusing on the potential impact to the coast of the United States if the oceans rise 7-10 feet as predicted. This is one of the primary outcomes described by climate scientists. Note, I was dealing with these as potential outcomes. So if the seas rise by the levels expected, a good portion of Manhattan would be under water, as would parts of the Carolinas, the Florida peninsula, and parts of Texas. The West Coast, with its higher shorelines, at least north of Los Angeles, would be less impacted. If you look at these consequences worldwide it gets even worse. Coastal flooding due to storm surge will also increase significantly. There will be many more Hurricane Sandys, and they will become more violent.
I also investigated the predicted weather pattern shifts across the US. Increased droughts are projected for the West Coast, including more forest fires and water shortages. Parts of the Midwest would also face severe droughts, key habitat changes, and higher temperatures severely impacting its ability to continue acting as the breadbasket of America. Alterations in habitats to birds and other animals will have major consequences on the insect population. There is also an expectation for the East Coast of increased occurrences of storms like Hurricane Sandy, possibly with even more increased intensity. Weather over the Midwest is also expected to turn more violent.
These were indeed dire predictions. Even if they’re only half right, the negative impact on our economy, and the potential for loss of life are still very high. Project management practices dictate that when identifying a risk with consequences to the project potentially as dire as the global warming predictions, even if the engineering simulations were mixed or uncertain, a risk mitigation plan is required. Even if you believe the probability is only 20% that global warming is real, the consequences are significant enough to require a plan and a response.
So how do we deal with a risk like this? In industry, risk management provides a process to address risk. A quick sidelight. I received my PMP certification from the Project Management Institute, which is recognized worldwide. PMI publishes the Guide to Project Management Body of Knowledge (PMBOK®) which summarizes the best processes involved in project management. Risk management is one of those processes included in the PMBOK®. There are four methods of dealing with risk:
- Accept the risk: Acknowledge the risk and accept the consequences.Let’s look at the four options of dealing with the risks of global warming and climate change:
- Avoid the risk: Remove the risk by eliminating whatever is causing the risk
- Transfer the risk: Pass it on to someone else, e.g., purchasing insurance
- Mitigate the risk: Make changes to reduce the probability of the risk occurring or prepare plans to ameliorate the consequences once they happen
Let’s look at the four options of dealing with the risks of global warming and climate change:
- Avoiding the risk involves eliminating the causes of the risk. I don’t believe we have a really good option for avoiding global warming/climate change at this point. If the changes are the result of natural climate processes, as some advocate, there is little we can do to avoid them. If they’re due to human influence, I think it’s impractical to expect an instantaneous change to less polluting energy sources. It’s unreasonable to expect every country in the world, or even the major polluters, to stop using fossil fuels immediately. It will take a decade or more to get the plan in place and to begin making all the changes. Politically, it just isn’t going to happen. Besides, we’re already seeing some of the predicted effects. I believe we’re just too far along to avoid at least some of the global warming/climate change consequences. (This is different than mitigating them which will be described later).
- Transferring the risk is the next method of dealing with risk. To me this method is unacceptable because the consequences are even half as bad as predicted, there isn’t enough insurance money in the world to pay for the consequences, not to mention the cost in lives lost to flooding and famine. The only thing we’d be doing is transferring the consequences to our children.
- Accepting the risk signifies indicates the risk is acceded to because the cost of risk avoidance is unacceptable compared to the cost of the consequence. This category is usually used only for risks with low impact consequences or for risks with damaging consequences but with an extremely low probability of occurrence. Opponents of global warming will obviously favor this approach. It’s the one seen as having the least near-term impact on the economy because we continue on our path of utilizing fossil fuels.
- Finally, the fourth method, risk mitigation. This involves taking action to reduce the probability of occurrence of the risk or to reduce its impact. Risk mitigation, then, requires we start addressing those consequences regardless of cause (natural or manmade). For example, we can begin planning our response to coastal flooding on a national scale. If there is a significant probability that human-induced component to changes in climate, then it may also not be too late to reduce the impact and perhaps even influence the degree to which it occurs (as opposed to completely avoiding it). We can accomplish this by reducing the emission of greenhouse gases by increasing the use of alternative energy sources. Replacing old industries with new is part of the creative destruction process that has occurred throughout human industry. (See my LinkedIn Pulse post Horse Manure, Buggy Whips, and Global Warming) In creative destruction, the displaced workers often find work in the new industry.
In my opinion, it comes down to which is worse:
- Accepting the impact of global warming/climate change happening and we aren’t prepared for it with all of the consequences because we wanted to keep the status quo, or
- Waiting for 100% proof that global warming is real in order to protect the status quo and then finding out that it’s too late for many of the mitigations identified, or
- Begin the mitigations identified to reduce the effects of global warming/climate change (and accepting the cost of near-term economic dislocations) and then finding out climate change is a false alarm.I guess your answer depends on whether you care more about yourself or your grandkids.
Posted on September 29, 2014, in current events, global warming, project management, science and tagged creative destruction, global warming, project management, risk management. Bookmark the permalink. Leave a comment.