Scientists warn over misuse of climate models in financial markets

Source(s): Thomson Reuters

By Matthew Green

Misuse of climate models could pose a growing risk to financial markets by giving investors a false sense of certainty over how the physical impacts of climate change will play out, according to the authors of a paper published on Monday.

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But the authors of a peer-reviewed article in Nature Climate Change warned that the drive to integrate global warming into financial decision-making had leap-frogged the models used to simulate the climate by "at least a decade".

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The problem is that existing climate models have been developed to predict temperature changes over many decades, at global or continental scales, whereas investors generally need location-specific analysis on much shorter time frames.

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"Businesses like using models, because the numbers give them a sense of security," said Tanya Fiedler, a lecturer at the University of Sydney and lead author of the paper. "It doesn't necessarily mean the numbers are reliable."

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