Bridging The Science/Finance Divide

Investors should be mastering the implications of climate science, but most of them aren’t – in part because scientists have done a lousy job of communicating it’s certainties and uncertainties.

Scientists know, for example, that the climate is changing and man is the cause, and they know that climate change will disrupt our supplies of food and water for centuries to come. What they don’t know is exactly how that change will manifest itself in specific rains and snows and floods and droughts. Indeed, that’s where much of the research is concentrated now, and that’s what scientists like to talk about – but that talk obscures the clear and present certainty over the fact that climate change is real and dangerous.

Last June, the American Meteorological Society held a workshop to explore ways of bridging the gap between the scientific and investment communities, and the result is Climate Information Needs for Financial Decision Making, which was published in the first week of January.

The report calls for tighter communication between the scientific and financial communities, and it also recommends that scientists categorize their findings by degree of certainty – specifically, by categorizing projections as either “possible” (meaning of an unknown likelihood or less than a 50% probability of happening), “probable” (meaning more than 50% likely to happen), or “effectively certain” (meaning at least a 95% probability of happening).

You can download the full report here.

Steve Zwick

I edit Ecosystem Marketplace, which is a news service focused on environmental finance. With this blog, I hope to offer coverage that is a bit lighter and more holistic than what we offer on EM.

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