Catastrophe modelling for the greater good
A large fraction of climate risk is attributable to extreme weather events such as tropical cyclones and flooding. In the reinsurance industry and elsewhere, the risk of extreme weather events is measured using catastrophe models that have three key limitations: they are proprietary, so the underlying assumptions and algorithms are not transparent and are thus outside public debate; they do not take adequate account of climate change and they have been developed primarily for use in regions relevant to reinsurance and thus ignore many low-income countries.
It’s time to move beyond the traditional confines of catastrophe models to address the problem of quantifying climate risk. Governments, NGOs and companies outside the reinsurance industry need access to climate risk information. This information also needs to be transparent and to incorporate the latest scientific understanding of climate change. All these goals would be well-served by robust academic participation in the development, use and interpretation of open-source catastrophe models.
Building on the Columbia Tropical Cyclone Hazard Model, the project aims to further develop, test and implement an open-source catastrophe model to forecast more accurately the risk posed by tropical cyclones and to better plan for the potential impacts on vulnerable communities, working with the World Bank and other partners.
The project’s intent is to be at the leading edge of a movement toward wider academic engagement as well as inclusion of a broader range of hazards, such as extreme heat, flooding, drought and tornados, in catastrophe modelling for disaster risk reduction and climate adaptation. The Swiss Re Foundation will specifically support the development and evaluation of exposure and vulnerability modules using public data sources, with a focus on tropical cyclone hazard.
The model will be made available to users directly as well as through Oasis, an open-source platform for developing, deploying and executing catastrophe models. Beyond promoting use of the model itself, the project also aims to change the culture of catastrophe modelling to better integrate it into the sphere of climate science, with the latter’s standards of openness, data sharing and peer review.
GOALS AND EXPECTED IMPACT
As the model is intended for worldwide use, global publicly available datasets will be used to compute risk in a couple of regions on a pilot basis in collaboration with partners. Once calibrated against actual losses for a number of real observed events, the model will produce global risk estimates. The project team will promote catastrophe modelling in academia by organising sessions on the subject at major scientific conferences.
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