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

VTT Technical Research Centre of Finland Ltd, Tekniikankatu 1, P.O. Box 1100, Tampere 33101, Finland
Author to whom correspondence should be addressed.
These authors contributed equally to this work.
Academic Editor: Iain Brown
Climate 2015, 3(4), 1018-1034;
Received: 29 June 2015 / Accepted: 10 November 2015 / Published: 20 November 2015
(This article belongs to the Special Issue Climate Risk Assessment and Management)
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. View Full-Text
Keywords: climate change; risk analysis; climate scenarios; hydropower plant climate change; risk analysis; climate scenarios; hydropower plant
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Molarius, R.; Keränen, J.; Poussa, L. Combining Climate Scenarios and Risk Management Approach—A Finnish Case Study. Climate 2015, 3, 1018-1034.

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