Combining Climate Scenarios and Risk Management Approach: A Finnish Case Study

    Research output: Contribution to journalArticleScientificpeer-review

    2 Citations (Scopus)

    Abstract

    Climate change impacts on nature and the environment have been widely discussed and studied. Traditionally, a company's continuity management is based on risk analysis. There are also attempts to implement scenario-based methods in the risk management procedures of companies. For industrial decision makers, it is vital to acknowledge the impacts of climate change with regards to their adaptation strategies. However, a scenario-based approach is not always the most effective way to analyze these risks. This paper investigates the integration of scenario and risk-based methods for a company's adaptation planning. It considers the uncertainties of the climate change scenarios and the recognized risks as well as suitable adaptation strategies. The paper presents the results of climate risk analysis prepared for two Finnish hydropower plants. The introduced method was first piloted in 2008 and then again in 2015. The update of the analysis pointed out that at the company level, the climate risks and other risks originating from governmental or political decisions form an intertwined wholeness where the origin of the risk is difficult to outline. It seems that, from the business point of view, the main adaptation strategies suggested by the integrated risk and scenarios approach are those that support buying "safety margins" in new investments and reducing decision time horizons. Both of these adaptation strategies provide an advantage in the circumstances where also political decisions and societal changes have a great effect on decision making.
    Original languageEnglish
    Pages (from-to)1018-1034
    JournalClimate
    Volume3
    Issue number4
    DOIs
    Publication statusPublished - 2015
    MoE publication typeA1 Journal article-refereed

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    climate
    climate change
    risk management
    decision making
    safety
    decision
    method
    risk analysis

    Keywords

    • climate change
    • risk analysis
    • climate scenarios
    • hydropower plant

    Cite this

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    title = "Combining Climate Scenarios and Risk Management Approach: A Finnish Case Study",
    abstract = "Climate change impacts on nature and the environment have been widely discussed and studied. Traditionally, a company's continuity management is based on risk analysis. There are also attempts to implement scenario-based methods in the risk management procedures of companies. For industrial decision makers, it is vital to acknowledge the impacts of climate change with regards to their adaptation strategies. However, a scenario-based approach is not always the most effective way to analyze these risks. This paper investigates the integration of scenario and risk-based methods for a company's adaptation planning. It considers the uncertainties of the climate change scenarios and the recognized risks as well as suitable adaptation strategies. The paper presents the results of climate risk analysis prepared for two Finnish hydropower plants. The introduced method was first piloted in 2008 and then again in 2015. The update of the analysis pointed out that at the company level, the climate risks and other risks originating from governmental or political decisions form an intertwined wholeness where the origin of the risk is difficult to outline. It seems that, from the business point of view, the main adaptation strategies suggested by the integrated risk and scenarios approach are those that support buying {"}safety margins{"} in new investments and reducing decision time horizons. Both of these adaptation strategies provide an advantage in the circumstances where also political decisions and societal changes have a great effect on decision making.",
    keywords = "climate change, risk analysis, climate scenarios, hydropower plant",
    author = "Riitta Molarius and Jaana Ker{\"a}nen and Liisa Poussa",
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    year = "2015",
    doi = "10.3390/cli3041018",
    language = "English",
    volume = "3",
    pages = "1018--1034",
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    }

    Combining Climate Scenarios and Risk Management Approach : A Finnish Case Study. / Molarius, Riitta (Corresponding Author); Keränen, Jaana; Poussa, Liisa.

    In: Climate, Vol. 3, No. 4, 2015, p. 1018-1034.

    Research output: Contribution to journalArticleScientificpeer-review

    TY - JOUR

    T1 - Combining Climate Scenarios and Risk Management Approach

    T2 - A Finnish Case Study

    AU - Molarius, Riitta

    AU - Keränen, Jaana

    AU - Poussa, Liisa

    N1 - Project code: 100490

    PY - 2015

    Y1 - 2015

    N2 - Climate change impacts on nature and the environment have been widely discussed and studied. Traditionally, a company's continuity management is based on risk analysis. There are also attempts to implement scenario-based methods in the risk management procedures of companies. For industrial decision makers, it is vital to acknowledge the impacts of climate change with regards to their adaptation strategies. However, a scenario-based approach is not always the most effective way to analyze these risks. This paper investigates the integration of scenario and risk-based methods for a company's adaptation planning. It considers the uncertainties of the climate change scenarios and the recognized risks as well as suitable adaptation strategies. The paper presents the results of climate risk analysis prepared for two Finnish hydropower plants. The introduced method was first piloted in 2008 and then again in 2015. The update of the analysis pointed out that at the company level, the climate risks and other risks originating from governmental or political decisions form an intertwined wholeness where the origin of the risk is difficult to outline. It seems that, from the business point of view, the main adaptation strategies suggested by the integrated risk and scenarios approach are those that support buying "safety margins" in new investments and reducing decision time horizons. Both of these adaptation strategies provide an advantage in the circumstances where also political decisions and societal changes have a great effect on decision making.

    AB - Climate change impacts on nature and the environment have been widely discussed and studied. Traditionally, a company's continuity management is based on risk analysis. There are also attempts to implement scenario-based methods in the risk management procedures of companies. For industrial decision makers, it is vital to acknowledge the impacts of climate change with regards to their adaptation strategies. However, a scenario-based approach is not always the most effective way to analyze these risks. This paper investigates the integration of scenario and risk-based methods for a company's adaptation planning. It considers the uncertainties of the climate change scenarios and the recognized risks as well as suitable adaptation strategies. The paper presents the results of climate risk analysis prepared for two Finnish hydropower plants. The introduced method was first piloted in 2008 and then again in 2015. The update of the analysis pointed out that at the company level, the climate risks and other risks originating from governmental or political decisions form an intertwined wholeness where the origin of the risk is difficult to outline. It seems that, from the business point of view, the main adaptation strategies suggested by the integrated risk and scenarios approach are those that support buying "safety margins" in new investments and reducing decision time horizons. Both of these adaptation strategies provide an advantage in the circumstances where also political decisions and societal changes have a great effect on decision making.

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