University of Warwick: ‘Risk’ prize recognises research by University of Warwick physics Professor into economic damages of climate change

Award recognises a study co-authored by University of Warwick researchers that found trillions of additional dollars in economic damage related to climate change.
Study by Warwick mathematician also recognised in awards
Professor Sandra Chapman of the Department of Physics.Research that shed light on the economic impacts of climate change that was co-authored by University of Warwick physicists has been awarded a 2021 Lloyd’s Science of Risk prize in the Climate Change category.

The study, published in October 2020, showed that current economic forecasting models fail to account for unpredictable variations in global temperatures, rather than the more predictable rising temperatures themselves.

The paper was co-authored by Professor Sandra Chapman (pictured) of the University of Warwick Department of Physics, as well as McCourt School assistant professor Raphael Calel, David A. Stainforth of the University of Warwick and also the London School of Economics and Political Science, and Nicholas W. Watkins from the London School of Economics and Warwick University as well as Open University in the UK.

The Science of Risk prize, awarded by Lloyd’s Lab, is designed to identify published research that can contribute to innovation and better understanding of risk in insurance. The 2021 Climate Change award recognises the paper, “Temperature variability implies greater economic damages from climate change,” published in Nature Communications.

Also recognised with a Lloyd’s Science of Risk award, in the Pandemics category, is a 2019 paper co-authored by Dr Sam Moore from the Warwick Mathematics Institute prior to joining the University of Warwick.

Professor Sandra Chapman of the University of Warwick Department of Physics said: “I’m really pleased to see our work recognised by Lloyd’s. Ours is a truly interdisciplinary team and working together has been an exhilarating challenge. This award underlines how working across disciplines can deliver the insights that we will need to tackle global challenges like climate change.’’

“Our study identified a new category of economic costs – those arising from the unpredictable, but unavoidable fluctuations in global climate that we’re bound to face,” says McCourt School assistant professor Raphael Calel, an economist. “To prevent these losses, we need a more diverse set of policy responses with increased investment in adaptation and resilience.”

The United States, for example, relies on a forecasting model developed by Yale economist William Nordhaus, for which he was awarded the Nobel Prize in 2018, as well two other forecasting models that descended from Nordhaus’ work.

But the study says that these models fail to take into account the unpredictable fluctuations in global temperatures observed year after year.

The extra damages – anywhere from $10 trillion to $50 trillion over the next 200 years when measured in today’s dollars, according to the study – show us that the cost of inaction is substantially higher than previously believed, it says.

Professor Chapman adds: “When we cause a system like the Earth’s climate to warm, it does not warm smoothly and uniformly. Changes in the Earth’s temperature translate into economic damages and our work estimates the additional economic damage that we can expect due to these fluctuations in earth’s global mean temperature on top of the smooth gradual increase due to increasing CO2 in the atmosphere.”

Dr Sam Moore from the Warwick Mathematics Institute commented on being recognised in the Pandemics category: “It is great to see our paper, which is quite technical in its mathematics, recognised for its potential wider impact. It makes the considerable work put into it that much more worthwhile.”

In addition to climate change and pandemics, this year the award was also given in the topic of cyber.

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