00:00:02
We've invited Eran Michelle Kjan who is the executive director of the Wharton
00:00:07
Risk Center to speak with us today about a new study by one of the world's foremost climate scientists Jim Hansen
00:00:16
and his 16 co-authors uh most of whom or all of whom are also leading lights in in the world of climate science. and
00:00:23
we're we're asking him to chat today about uh what this uh striking new study
00:00:28
means for planet earth and also for business. Sure. Um well, first of all, as as we discussed before that hasn't
00:00:36
been peer reviewed, which means that we still have to uh see what the community will will will think about their
00:00:43
assumptions. These are models. So there are the assumptions behind the models but clearly they want to uh uh trigger a
00:00:49
big signal uh toward the international communities. I think what what's interesting to me is that we typically
00:00:55
refer to the IPCC as uh almost the benchmarks today. What in reality the IPCC is a consensus document. So a very
00:01:05
large number of scientists agreeing on what number. So we basically will select the lowest denominator and um and great
00:01:12
experience with the IPCC except that yes we have to make assumptions on thing we
00:01:17
don't consider a very different sitting here used to be the chief climate scientist at NASA most of the co-authors
00:01:25
are top people in the field um you know there are many top people but they are among these groups from the US from
00:01:33
Europe from China so that's an interesting coalition of author right here. I think for many years we thought
00:01:40
we had the luxury to believe that well we're facing a linear threat. So basically next year would be a little
00:01:47
bit worse than last year but only on the margin. And let's be honest about the
00:01:52
discussion about climate often pushing the discussion in 2100 not really telling the people what it means for me
00:02:00
tomorrow or for my kids tomorrow. Uh what Enson is do now is well first of all we don't have much time. They're
00:02:06
talking about 2050. So it's literally almost tomorrow. And two, we're not
00:02:11
talking about increase of sea level by a few feet. We're talking about large large number uh 5 10 20
00:02:19
meters. Basically two, three, four, five floor. So it's it's a very I mean if
00:02:24
that's true, that's a radical change in the way we think about the impact of
00:02:28
climate change. Now the uh I just want to mention the IPCC is the intergovernmental panel on climate
00:02:34
change. I think they have a big meeting in September and I believe that uh Hansen has been quoted as saying they
00:02:40
wanted to get this study out. The reason they didn't wait for a peer review which
00:02:43
would take months and months is that they wanted to get this out in time for this IPCC meeting uh I believe this is
00:02:50
correct in in September. So just just point that out. Yeah. Yeah. And to their I mean just for people to understand
00:02:56
it's typically peer reviewed before and then published but the way that journal
00:03:00
works is the way it works. publish first, then you invite the entire scientific committee to comment and that
00:03:06
becomes peer-reviewed by a large number of people. So, it's not negative that
00:03:10
hasn't been peer-reviewed, right? Uh and there's not an excuse to tell that
00:03:13
they're right or wrong. Um so, that's just to keep and that journal is the
00:03:17
atmosphere, chemistry, and physics discussion journal. So, it is literally a journal for discussion. So, it's
00:03:24
different than a peerreview. Okay. Very good. So uh so potentially a big change,
00:03:30
a geometric change rather than a linear change is what's being talked about here. What does obviously that means
00:03:36
that coastal cities like New York City could be in big trouble. We've heard talk about other so many coastal cities
00:03:44
uh if people have to migrate inland and if it happened very quickly there could create great conflict. So we like to
00:03:50
hear a little bit about that. But then also from the business side, this could change how companies pay for insurance
00:03:58
who maybe you can't get insurance. Nothing immediate of course, but it sounds like if the evidence for this
00:04:05
starts to to turn up o over the next couple years that it's it will be getting taken even more seriously. So
00:04:11
yeah. Well, if you take the United State of our example here, about 40% of our population live in coastal areas. So
00:04:18
it's not just New York or Miami. It's lot number of people affected here. So
00:04:25
you can think about a real estate implication. You know your apartment or your house used to worth $500,000 now no
00:04:31
one wants to buy it. So I mean the implication could be massive. uh insurance companies are obviously
00:04:37
looking at these type of analysis very carefully because what is insurable today may not be insurable tomorrow or
00:04:44
if it's still insurable will be insurable at double the price or triple the price depending on what the risk is.
00:04:50
Uh I think the big discovery again is it's that tipping point almost the fact
00:04:54
that uh we may wake up one day it's not one day but we can wake up in 20 2025
00:05:00
2030 and in a matter of two or three years see rapid sea level and that's what people have been um have been
00:05:07
fearing for years because you don't have the time to adapt. If you have 50 years,
00:05:11
100 years, if you're the the chairman of the board, you can talk to your board of
00:05:14
directors saying, "Well, this is a new environment that our firm will have to
00:05:18
live in in 20 years from now. What do we do about it?" That's fine. If you move
00:05:24
for 20 years to next five years, that's a radically different discussion. And
00:05:29
just to be clear um roughly about the science, you can help me with this please, but my understanding is that
00:05:35
there are these huge ice shells on land that move towards the sea and particularly green land in Antarctica or
00:05:43
Antarctica. And that they're melting uh first of all, maybe they shouldn't be
00:05:48
melting at all, but they're not only are they melting, but they're melting at a
00:05:51
rapid pace. That's fresh water going into the ocean. That changes the salinity. It changes the hot and cold
00:05:57
levels of the ocean. Oddly, it can cause the ocean temperature to rise, but then somehow
00:06:03
warmer water can get stuck under the ice in Antarctica, which actually causes it
00:06:07
to melt fast. It's very complicated, but things are really melting even though
00:06:11
they make it it may seem like they're getting colder at first. Yeah. Uh no, I
00:06:15
mean it's complicated and that's part of the difficulty to communicate about it.
00:06:20
uh because very clear quickly people get overwhelmed with the information and the
00:06:24
reason it's complicated is that you talking about planet earth um multiple interrelated systems uh air water soil
00:06:34
uh sun feedback loops feedback loops uh but no you describe that pretty well basically it's like you take a piece of
00:06:41
ice and you put it in your glass of water you let it melt nothing happened your glass stay at the same level now if
00:06:49
you take that piece of ice and let it melt on the plate, you see water. And that's exactly what we're talking about
00:06:55
that that ice is actually above sea level, which means that it's additional water coming in. That's one aspect that
00:07:02
the sea level and Antarctica and Greenland has by far the largest uh resource for ice around the world. So
00:07:10
when the ice start melting, you have sea level rise. That's one. Two, you have
00:07:14
less reverberation from the solar system. So basically the planet Earth is going to absorb much more heat than
00:07:22
before. Not as much ice reflecting the exact the light and heat back out into the atmosphere. So that's for the two
00:07:28
part. And then you starting to challenge the oceanan systems in a way that we don't know how they're going to react.
00:07:36
And I think that's the issue here. Uh, and I think that's what they discussed
00:07:40
in the paper too, saying, "Well, we know we don't know for sure, but it's totally
00:07:44
plausible that we'll have that um rapid ice melting." That's what they're
00:07:49
referring to. So, we do want to see what happens when when it becomes more peer-reviewed or when more scientists
00:07:55
have a chance to look at the data. But this does seem like a step change uh in in prediction uh compared with what
00:08:02
we've seen in the past from top people. And um is is there a way to sum up what
00:08:07
this study means or how important it is? Sure. Well, I think it's fair to say
00:08:11
that other people have predicted that before. They're not the first one or the
00:08:15
only one except that as time passes, we have more information that's being collected. The technology is more
00:08:22
advanced as well. So, we're in a better position to actually validate certain
00:08:26
theories than we were maybe 10 or 15 years ago. And uh and planetars is already changing. I mean, that's a big
00:08:33
thing. We don't have another 200 years to see change. It's already happening as
00:08:38
we speak. So more drought. I mean look at the situation in California. I mean you can take anecdotes here and there.
00:08:44
When you take them all together and start looking at the system, the planet system, planet earth is already starting
00:08:50
to fight back. So um I the question for businesses to me is twofold. One is what
00:08:54
does that mean for my current business model like kind of risk management asset protection. Two is uh on the value
00:09:02
creation side. If that is the world we're going to live in in the next 20 or
00:09:07
30 years, what type of new products, new services, uh new intellectual property should we develop between now and then
00:09:15
to be leading in a world with much more uh which higher sea level. Um so that's
00:09:21
that's an interesting in the history of forecasting or predictions of climate change. you point
00:09:28
out there's there's been many um the IPCC has made many of their so-called
00:09:35
consensus predictions. How have they fared in um over the last 10, 15, 20 years when they predict something? How
00:09:44
accurate has it turned out to be? Because as you say, we have more evidence, better technology for
00:09:48
collecting evidence today. No, that's a great question and the answer is um not
00:09:52
the one that as scientists would like to see but the reality is if you go back at
00:09:57
the very beginning of the IPCC and you look at the prediction back then u what year might that be uh 15 years ago say
00:10:05
and you look at what they predicted for 2020. Mhm. Uh in terms of greenhouse gas
00:10:11
emission, in terms of impact on the planet, uh the worst case scenarios are already happening. And I think that's
00:10:17
important for people to realize that we have more data. But we thought I think it's fair to say we the international
00:10:23
community thought we had more time. It will take much longer for planet earth to react.
00:10:29
And what we're discovering year after year is that we don't have much time.
00:10:33
Actually, uh, planeters are starting to react much quicker than we had thought it would. And that new paper should
00:10:40
potentially, uh, not only much quicker, but much more intensely as well. [Music]