The IPCC Process and Why Business Should Trust It.

A host of excellent sources for reports on climate change, its current impacts, and the likely future scenarios it will cause.  Authorship ranges from the academic world to reporting bodies, finance professionals to non-profits.  Virtually all of these reports, to a greater or lesser degree, cite the Intergovernmental Panel on Climate Change (IPCC) as a source text for their findings and predictions.  So authoritative are the IPCC's reports that it makes sense to explain how they arrive at their conclusions and lay out for the business community why the IPCC is so trustworthy.  Let's start with a couple of bullets:

FOUNDED IN 1988- by the UN Environment Programme & World Meteorological Organization. The  IPCC's first report was issued in 1990.  To date there have been five versions of it's reporting.  The Fifth Assessment Report (AR5) was released in three parts over the last year.

THOUSANDS WORKING UNPAID- For each of its panels the IPCC recruits the work of thousands of scientists and functional experts.  None are paid, all work on a volunteer basis.

NO ORIGINAL WORK- The job of the IPCC isn't to conduct new research.  It synthesizes reporting conducted across a series of disciplines to deliver reporting that's been vetted for quality in methodology, analysis and conclusion.

A CONSERVATIVE APPROACH- The IPCC represents the lowest common denominator for consensus among those thousands of experts.  For this reason IPCC reports are both definitive of the situation and tend to underestimate future impacts.  They represent a deeply conservative approach to analysis which has repeatedly outlined serious, dramatic impacts which are appearing more quickly than consensus had predicted.

The Process

What results from that process is an unparalleled assessment of the state of the climate and its trajectory.  This post is an explanation of how the report gets made and why the business community should be reading and trusting it.  What follows is an explanation of how information gets vetted from raw data to being part of the published report.

Step 1: Original Work

Data has many origins.  Some is collected from the physical world like ice cores from the arctic and air samples from Hawaii.  In other cases it's mathematic modeling performed on the fastest computers by the most rigorous programers.  Whatever the origin, initial original work is produced every day from every corner of the world.  Data points from the physical sciences, economics, medicine and a raft of other disciplines are constantly being generated and put forward as to illuminate an unknown or poorly understood event or process.  Whatever the reason for the effort, original work has very little value until it becomes accepted as expertise, shown to be free from biases and can then be used and applied to further some other pursuit.  Therefore it can't be shuttered away in an academic or institutional closet, it must be put out into the world at large where it can be abused and tested by other smart people whose sole purpose is to move the topic forward.

Step 2: Peer-Review

Clicking "Send" or "Publish" is often the scariest part of making something new but it's the only way to find out if what you've made or learned has value.  Peer-review is the process scholarly work uses to vet the crackpots from the geniuses.  You name the subject and there's an academic journal for it (The Journal of Vibration and Control, the Textile Research Journal, and the journal Currents in Biblical Research are all real things) and they all publish new work.  These journals are all deeply invested in the accuracy of the work they publish.  That is, they don't so much care about the direction their field goes as care that the results are valid, repeatable, and move the field forward.  To make sure that bad data doesn't advance, every article is screened extensively for errors prior to publication by other academics doing similar research.  Potential publications can be rejected, accepted, or considered acceptable with revisions.

Step 3: First IPCC Draft

Peer-review is very much like all of the actors of the world agreeing who the best actor is.  The first round of the IPCC draft report is like the making a report of who the best academy award winners are and what their work means for the field of acting.  The first draft of an IPCC report collects data that's already been reviewed and accepted as mainstream and aggregates it in such a way as to make a reasonable conclusion about the broader issues.

Entomological work could be included to look at how pollinators are reacting to changes in their habitat and economists consulted for what low crop yields mean for world markets if those pollinators can't fertilize a particular foodstuff.  Is that the end?  Oh, no.

Step 4: Expert Review

The completed first draft itself goes through a round of review.  The conclusions are teased apart and challenged for accuracy.  Other fields of study may be drawn in to solve a particular question and non-scientist functional experts called on to clarify a subject.  This process can take months or years and results in a much more extensive product.

Step 5: Second IPCC draft & Summary

In the second draft it becomes clear that most readers will benefit from an executive summary.  That piece is authored for laymen, policy makers and anyone for whom the technical papers are simply too much unnecessary data.  Once a second draft is fully formed, it goes back to expert review but this time with a twist.

Step 6: Review by Experts and Governments

In addition to scientists, academics, and functional experts, governments are now given a chance to weigh in.  They're invited to comment on the "accuracy and completeness of the scientific, technical, and socio-economic content and overall balance of the draft".

Step 7: Final Draft

 The final draft can be markedly different from the first.  Due to the process and expanding pool of constituents however final drafts tend to be deeply conservative documents.  They take years to produce and require hundreds of thousands of volunteer hours.  Since 1988 only five have been written.

So what?

Consider what this means.  You have layer upon layer of review by unpaid experts who don't get any glory for crafting original work.  You have thousands of experts from combative and sometimes competing disciplines all coalessing around a topic in slow motion and authoring a final work product that goes through a comment round by all the nations of the world.  The only reasonable conclusion a person can make from all that is that the final report must be a credible document and must be a conservative view of the situation.

That's concerning.  Concerning because a plain reading of the IPCC report tells the reader two things.  First, year after year no one is doing enough to slow, let alone halt or reverse the processes that fuel global warming.  Second, that adapting to this new climate-altered world is going to be expensive.  Concurring reports tag adaption costs in the range of 2-2.5% of global GDP.  More levies, higher cost of food, shortages of materials, mass emigration and property-induced losses of wealth on a staggering scale.  These are business issues and (for those more optimistic) business opportunities.  You now have a layman's understanding of the process which builds the IPCC reports.  They are credible, trustworthy and very likely understate the disruptions of the future.  Wise managers will be looking to adapt their business models accordingly.


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