There is a strong consensus amongst experts on climate that the Earth is warming at a rate that can only be explained by rapid increases in the concentration of greenhouse gases in the atmosphere. These result largely from the burning of fossil fuels and destruction of forests. The Earth's climate in the past has changed due to changes in the Earth's orbit around the Sun and for short periods by major volcanic eruptions, but the present rate of change cannot be explained without taking account of increases in greenhouse gases.
This global warming is fastest in high northern latitudes due to large land areas which warm faster than the oceans, and the melting of ice and snow cover which allows more sunshine to be absorbed rather than reflected back into space. High latitudes are also warming faster than the tropics because warming increases evaporation, especially in the tropical oceans. This takes latent heat of evaporation into the air, where the winds transport much of it to higher latitudes where the water vapour condenses, releasing the latent heat and increasing rainfall at higher latitudes.
These processes are complicated so it needs suitably qualified scientists to research and understand what is going on. Uncertainties remain about the rates of change and the local and regional consequences but it is certain that the water cycle of evaporation and condensation is accelerating. This causes more severe and more frequent extreme events such as droughts and flooding rains, modified locally by regional weather patterns which also change with global warming.
The oceans are warming slower than the continents due to their large heat capacity, but the warming causes the water to expand, making the sea level rise. Added to that is more water from melting mountain glaciers and increasingly from more rapid outflow of ice from the Greenland and Antarctic ice sheets. These effects have been measured from ground-based and satellite observations, so there is no doubt they are happening. What is uncertain is how rapidly these processes may accelerate in future.
Observations show that average global warming since the industrial revolution is already nearing 1ºC, and global average sea level has risen in the same time by some 20 cm. Best estimates suggest that by 2100 global average temperature could increase by about 2 to maybe 4 or 5ºC, and global average sea level may rise anywhere from about 60 cm to well over a metre.
All this implies that so-called natural disasters such as severe storms, floods, droughts, wildfires, and coastal flooding will increase in frequency and intensity. Take the 2012 storm Sandy effects on the highly populated New Jersey/New York coastal area. It was made worse by the roughly 20 cm sea level rise in the last century, but an additional 1 meter rise in the 21st century would make it far far worse. The same is true, but with much more drastic consequences, in poorer countries such as the Philippines.
This raises the question of what we should do about global warming. The science of climate change is thus policy-relevant and scientists have a duty to explain its relevance by referring to possible courses of action that might make the best of the situation. This necessarily involves managing risk. The future impact of climate change is not certain, but those of us who understand the problem are duty bound to discuss the possibility of reducing global warming by reducing greenhouse gas emissions, and of adapting to any changes we cannot avoid.
This essay will focus on the latter, by discussing the question as to how can we best adapt to the effects of global warming. This is a question of risk management, given that, while we know there will be increased impacts, especially of extreme climatic events, their exact magnitude and location remain uncertain.
This is best expressed in terms of probability. A 50% probability means there is one chance in two of a given event happening, whereas a 95% probability means that the chance of it happening is 19 out of 20. Traditionally scientists have regarded something as "proven", or at least well-established, if the probability of it being true is at least 95% and preferably better than 99% (i.e., 1 in 100). However, if the consequences of some given event happening is serious or disastrous a lower probability of it occurring should also be taken seriously despite the uncertainty.
For example, we generally pay our annual insurance premium on our house against fire, not because we are certain that it will burn down this coming year, but because it just might. Similarly engineers when they design culverts, bridges or large dams have to design these to withstand floods of various magnitudes. For a culvert, where the consequences of it overflowing would be minor, they may design it to cope with a 1 in 10 year flood, but a bridge to withstand a 1 in 100 or 1000 year flood, and a large dam to withstand a 1 in 1,000 or 10,000 year flood. This is because in the latter cases the consequences of failure would be much greater.
Thus risk management must take account of both probability and consequences. In the case of climate change the consequences of increases in the frequency and intensity of extreme events may be very serious, causing large damage bills, disrupting society and costing many lives. Examples include the disastrous floods in Pakistan a few years ago, the huge storm disasters caused by tropical cyclone Katrina in New Orleans in 2005 and storm Sandy that hit New York and New Jersey in 2012, and Typhoon Haiyan in the Philippines this year . Australia has had its share of disastrous floods and droughts in recent years, as well as disastrous bushfires. These have cost hundreds of lives and billions of dollars.
Both investors and governments need to take the risk of such events into account in planning, especially for new developments in risky locations. Governments have to work out how best to adapt existing settlements and infrastructure from increasing risks and investors to properly anticipate risks.