JP

Uncertainty analysis in multi-sector systems: Considerations for risk analysis, projection, and planning for complex systems

Abstract: Simulation models of multi-sector systems are increasingly used to understand societal resilience to climate and economic shocks and change. However, multi-sector systems are also subject to numerous uncertainties that prevent the direct application of simulation models for prediction and planning, particularly when extrapolating past behavior to a nonstationary future. Recent studies have developed a combination of methods to characterize, attribute, and quantify these uncertainties for both single- and multi-sector systems.

Here we review challenges and complications to the idealized goal of fully quantifying all uncertainties in a multi-sector model and their interactions with policy design as they emerge at different stages of analysis: (1) inference and model calibration; (2) projecting future outcomes; and (3) scenario discovery and identification of risk regimes. We also identify potential methods and research opportunities to help navigate the tradeoffs inherent in uncertainty analyses for complex systems.

During this discussion, we provide a classification of uncertainty types and discuss model coupling frameworks to support interdisciplinary collaboration on multi-sector dynamics (MSD) research. Finally, we conclude with recommendations for best practices to ensure that MSD research can be properly contextualized with respect to the underlying uncertainties.

Key Points:

  • Uncertainty is an inherent part of multi-sector systems analysis;

  • Approaches to addressing uncertainty involve deliberate tradeoffs;

  • Best practices involve standardizing communication and improving transparency

 

Image credit: NASA Goddard Space Flight Center

The plastic intensity of industries in the USA: The devil wears plastic

Abstract: Plastic pollution is a big source of concern around the world. Research to date has focused on the types of plastic in the environment and the processing of plastic waste. For policymakers and consumers to be informed decision makers, they need to understand the industries which use plastics and the plastic intensity of those industries.

Using input–output data for the USA, we calculate the plastic intensity (the value of plastic inputs per dollar of output) of 415 non-plastic industries for 13 types of plastic. We find the most plastic intensive industries are related to clothing and fabric manufacturing. This is true for aggregate plastics as well as plastics most likely to contribute to pollution. The high plastic intensity of the clothing and fabric industries is consistent with the abundance of clothing-related microplastics found in waterways.

The results indicate that policies focused on consumer-facing plastics such as plastic bags do not address key plastic pollution pathways, and can help policymakers and consumers make decisions that improve environmental outcomes.

A climate change modelling framework for financial stress testing in Southern Africa

Abstract: Central banks play a critical role in the economy, with policy levers that influence and are influenced by climate change. An important part of central bank interventions is conducting climate-related stress tests and scenario analysis to increase awareness in the financial sector of the effects of climate change, improve the integration of climate-related risks into financial companies’ decisions, identify important data gaps, and start building capacity to develop more advanced and accurate climate scenarios. These exercises, however, are a challenge to central banks and financial companies because of their complexity and the new data and tools required for scenario development and analysis.

The development of scenarios for climate-related stress testing requires the integration of different model frameworks to assess the impacts of climate change, translate these impacts into macroeconomic scenarios, and evaluate the subsequent financial sector outcomes. This integration requires multidisciplinary skills such as the joint work of energy system modelers, climate scientists and macroprudential experts.

This paper provides an overview of the modelling frameworks available for assessing climate change impacts in South Africa, covering both local and global models. This should assist financial institutions and regulators with developing partnerships to build scenarios and assess the impact of climate-related risks. Gaps in current models and modelling for financial stress testing are also identified as considerations for future research.

Comment on 'Egypt's water budget deficit and suggested mitigation policies for the Grand Ethiopian Renaissance Dam filling scenarios'

Abstract: In their recent paper in ERL, 'Egypt's water budget deficit and suggested mitigation policies for the Grand Ethiopian Renaissance Dam (GERD) filling scenarios,' Heggy et al (2021 Environ. Res. Lett. 16 074022) paint an alarming picture of the water deficits and economic impacts for Egypt that will occur as a consequence of the filling of the GERD. Their median estimate is that filling the GERD will result in a water deficit in Egypt of ∼31 billion m3 yr−1. They estimate that under a rapid filling of the GERD over 3 yr, the Egyptian economy would lose US$51 billion and 4.74 million jobs, such that in 2024, Gross Domestic Product (GDP) per capita would be 6% lower than under a counterfactual without the GERD.

These and other numbers in Heggy et al (2021 Environ. Res. Lett. 16 074022) article are inconsistent with the best scientific and economic knowledge of the Nile Basin and are not a dependable source of information for policy-makers or the general public. In this response to Heggy et al (2021 Environ. Res. Lett. 16 074022) we draw on high quality peer-reviewed literature and appropriate modeling methods to identify and analyze many flaws in their article, which include (a) not accounting for the current storage level in the High Aswan Dam reservoir (b) inappropriately using a mass-balance approach that does not account for the Nile's hydrology or how water is managed in Egypt, Sudan and Ethiopia; (c) extreme and unfounded assumptions of reservoir seepage losses from the GERD; and (d) calculations of the economic implications for Egypt during the period of reservoir filling which are based on unfounded assumptions.

In contrast to Heggy et al (2021 Environ. Res. Lett. 16 074022), robust scientific analysis has demonstrated that, whilst there is a risk of water shortages in Egypt if a severe drought were to occur at the same time as the GERD reservoir is filling, there is minimal risk of additional water shortages in Egypt during the filling period if flows in the Blue Nile are normal or above average. Moreover, the residual risks could be mitigated by effective and collaborative water management, should a drought occur.

Global trends and European emissions of tetrafluoromethane (CF4), hexafluoroethane (C2F6) and octafluoropropane (C3F8)

Authors' Summary: Perfluorocarbons (PFCs) are potent greenhouse gases with exceedingly long lifetimes. We used atmospheric measurements from a global monitoring network to track the accumulation of these gases in the atmosphere. In the case of the two most abundant PFCs, recent measurements indicate that global emissions are increasing. In Europe, we used a model to estimate regional PFC emissions. Our results show that there was no significant decline in northwest European PFC emissions between 2010 and 2019.

Modelling the growth of atmospheric nitrous oxide using a global hierarchical inversion

Authors' Summary: Nitrous oxide is a potent greenhouse gas and ozone depleting substance, whose atmospheric abundance has risen throughout the contemporary record. In this work, we carry out the first global hierarchical Bayesian inversion to solve for nitrous oxide emissions. We derive increasing global nitrous oxide emissions, which are mainly driven by emissions between 0° and 30° N, with the highest emissions recorded in 2020. 

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