The EarthScan Navigation Panel: Climate Scenarios

After reading this article, you will learn:

• Which EarthScan Climate Scenarios are available
• Where to find Climate Scenarios in EarthScan
• What each Climate Scenario represents

Climate scenarios are analytical tools used to explore the potential impacts of climate change under different potential futures.

Learn more about climate scenarios and how they’ve been developed.

 

There are three Climate Scenarios available in EarthScan:

• Business as usual
• Emissions peak in 2040
• Paris aligned

Where can I find EarthScan Climate Scenarios?

Within EarthScan, you can find the Climate Scenarios as part of the Navigation Panel.

As you filter through different Climate Scenarios, your Insights will update to reflect your selection. 

What do the EarthScan Climate Scenarios indicate?

Business as usual

‘Business as usual’ represents a future where governments put no further policy in place to reduce emissions and do little to avert risk to physical assets (such as buildings) as a result of climate change. Organizations face the greatest level of physical risk, but the lowest level of transition risk. This scenario:

• Forecasts rising emissions throughout the 21st century.
• Predicts that global warming will exceed 3°C.
• Contains the greatest level of decision uncertainty and climate volatility.

Use the Business as usual scenario to: represent the worst-case scenario for physical risk and the best-case scenario for transition risk.

Emissions peak in 2040

Under an ‘Emissions peak in 2040’ scenario, expert guidance suggests that physical climate risk to organizations will increase, as compared to a Paris aligned scenario. Furthermore, late policy action will result in greater levels of transition risks compared to the alternative two scenarios. In this scenario:

• Policy action to curb emissions is delayed.
• Greater, more severe policy action is required further down the line to compensate.
• Climate risk volatility increases.
• End-of-century temperatures exceed 2°C; the current best estimate is 2.7°C.

Use the Emissions peak in 2040 scenario to: represent a central, or ‘middle-of-the road’, pathway for physical risk, and the worst-case scenario for transition risk. You can also use this scenario to explore how your organization might be impacted under the scenario that best represents current national* commitments to emissions reductions. 

*National refers to the 193 Parties (192 countries plus the European Union) that have joined the Paris Agreement.

Paris aligned

Under a ‘Paris aligned’ scenario, organizations will experience less physical risk than under other scenarios, but a high level of transition risk. While this scenario will reduce projected loss and damage relating to physical risk, it won’t eliminate them. By many expert accounts following COP26, this scenario is now deemed optimistic, although still possible. This scenario assumes:

• Early, decisive policy action.
• A unified move towards a low carbon economy.
• Actions will limit warming as close to 1.5°C as soon as possible and are enough to keep warming below 2°C, in line with the Paris Agreement.  
• Lowest climate volatility risk and lowest decision uncertainty.

Use the Paris aligned scenario to: represent a best case scenario for physical risk, and a central pathway for transition risk. This scenario also aligns with TCFD disclosure recommendations (as well as other frameworks such as SASB and ESG), which specifies that climate scenario analysis should include a 2°C or lower scenario. 

Learn more about climate scenarios.