EDHEC Climate Institute Explores Granular Climate Data and Economic Risks During Sustainability Week

More granular information on physical risk impacts means a better adaptability to future shocks

Nicolas's presentation underscored the importance of granular climate information in accurately assessing the spatial and sectoral impacts of climate change. Using the Mediterranean basin as a case study, he demonstrated how high-resolution data, enhanced computing systems, and advanced climate simulations are reshaping the way industries and investors can understand and manage climate risks.

Key Highlights:

1. Heterogeneity of Climate Impacts: Nicolas emphasized that global averages often mask critical localized risks. He showcased how climate change affects regions and sectors differently, with significant implications for agriculture, energy, and real estate.
2. Advancements in Climate Data: Cutting-edge datasets from NASA and other mega-providers have enabled a new level of granularity in climate modeling. Nicolas shared insights into how these data, processed through high-performance computing systems, can be leveraged to forecast risks and inform adaptation strategies for investment management.
3. A Stepwise Approach to Projecting Output Impacts: He outlined a practical methodology for linking projected climate shifts to resulting changes in economic outputs, involving historical data analysis, econometric modeling, and ensemble of global climate model’s simulations. This approach provides investors with more granular information on physical risk impacts essential for a better adaptability to future shocks.
4. Addressing Uncertainty: Nicolas acknowledged the challenges of uncertainty inherent to climate simulations. Since it is not a flaw but rather a measure of what we have yet to understand, Nicolas discussed methods to account for variability using multimodal means and medians as well as refined scenario analysis based on the latest diagnostics of CMIP6 climate models.
5. Real-World Applications: From the direct implications of California wildfires for insurers to the broader question of assessing infrastructure vulnerabilities in the Mediterranean area, Nicolas highlighted how these tools and data can equip investors to account for localized risks and seize the true economic cost of adaptation to a warming future.

In a concluding note, Nicolas reflected on the growing importance of time- and spatially resolved climate information for global decision-makers and investment management. He called for continued deployment and exploitation of this spatial momentum by research institutes, governments, and industries.

The session was part of EDHEC Climate Institute's ongoing efforts to share cutting-edge climate research with its community of staff and students.

To watch the replay of the webinar follow this link or see the video below:

Click here to access the slides of the presentation.

About the Speaker:

Nicolas Schneider is a Senior Research Engineer -  Macroeconomist at the EDHEC Climate Institute. His focus includes expanding the Institute’s capabilities in spatial climate econometrics and deploying large-scale projections of macroeconomic impacts. He holds a PhD from Boston University, funded by the U.S. Department of Agriculture's National Institute of Food and Agriculture (NIFA), and MSc degrees from both the London School of Economics and Paris-Panthéon Sorbonne University. Nicolas has co-authored over a dozen peer-reviewed articles and has taught at Harvard University’s Department of General Education and the Quantitative Methods Seminar at the Oxford Smith School. He has also consulted for the New York City Mayor's Office of Climate and served as a fellow in the Coupled Human and Earth Systems Program of the U.S. Department of Energy’s MultiSector Dynamics Modeling Initiative.