Risk-reward tradeoffs: a new focus for the blog

We’ll have a new focus here on risk-reward trade-offs.

People evaluate risks informally all the time.  Our focus here will be explicit decisions about when the rewards justify the risks.  When companies and governments and individuals make those decisions, we want to publicize and celebrate that.

We’ll also continue our occasional series of good data sources for these decisions.  If you have any good examples to share, please send them our way!

Aqueous Advisors signs the Climate Declaration

Aqueous Advisors is proud to sign on to the Climate Declaration, from the BICEP coalition at Ceres (Business for Innovative Climate and Energy Policy).  Here is an abridged version of the declaration that goes well with the thinking at Aqueous:

Tackling climate change is one of America’s greatest economic opportunities of the 21st century, and it’s the right thing to do.

What made America great was seizing opportunities. Our country is based on fighting for our freedoms and ensuring the health and prosperity of our state, our community, and our families. Today those things are threatened by a changing climate that is being caused by air pollution.

Just as America rose to the great challenges of the past, we have to confront this challenge. And in doing this right, by saving money when we use less electricity, by driving a more efficient car, by choosing clean energy, by inventing new technologies that other countries buy, and creating jobs here at home, we will remain a true superpower in a competitive world.

In order to make this happen, there must be a coordinated effort to combat climate change — with America taking the lead here at home, by working together.

And here is the full version, with logos of the some of the other corporate signers:

Climate Declaratio

Climate risks for U.S. agriculture: results from IPCC #5

The Intergovernmental Panel on Climate Change released drafts of its 5th Assessment last month.  Here’s a scenario they think is plausible for the end of the century, assuming some mitigation of greenhouse gas emissions:

  • U.S. mostly warmer by 4-5 degrees F
  • U.S. mostly wetter by 0-10% in precipitation
  • but precipitation drier by 0-10% year-round in some areas, especially Texas

From an agricultural perspective, increased precipitation like this will generally be helpful.  However, warmer air will hold more moisture, leading to more storms and more runoff.  With warmer air, the land will also dry more quickly.  So the crop effects of wetness and warmth work in different directions, and for most of the U.S., I can’t tell which will dominate.  But for agriculture in Texas and other drying areas, the effects at this level all seem negative — either requiring more and better irrigation or leading to lower yields.

Here are some of the key graphs:

from ipcc 5

 

This is:

  • a median result from 42 models
  • with temperatures translated from an increase of 2-3 degrees C
  • with precipitation changes hatched when they are less than their standard deviations
  • for the scenario with radiative forcing at 4.5 W/m^2, which would correspond to greenhouse gases increasing at about half the rate of the past fifteen years
  • taken from pages AI-20 to AI-27 of the Atlas on the IPCC website.

This is not the only scenario that the IPCC sees as plausible, and they have estimates of other models, periods, regions and levels of radiative forcing on their website.  Scenarios with less mitigation of greenhouse gas emissions would be even more dramatic.

Even in this scenario, the average annual temperatures are predicted to be above the historical hottest years before 2080 (a news item from last week).  So the scenario shown in these maps is beyond the range of historical data, and its risks to agriculture may be large.