Implications for Future Risk Management Strategies - Climate Change and Energy Supply and Use - page 43

Chapter 4
Implications for Future Risk
Management Strategies
GCRP, 2009, notes that the US energy sector is large and complex, with impressive i-
nancial and management resources, capable of responding to major challenges. It is ac-
customed to strategy development and operation in the face of uncertainties and risks,
both environmental and political. No sector has beter capabilities to respond to chal-
lenges posed by climate change impacts.
In responding to the need to assure resilience in the face of such challenges, every
credible source indicates that the appropriate strategy for energy supply and use is
rooted in risk management for an uncertain future rather than precise impact projec-
tions for optimal decisions - not only seeking to reduce vulnerabilities but also to iden-
tify market opportunities.
For energy supply and use, strategies for managing risks associated with climate
change will vary by resource/technology trajectory, institution, and climate change im-
pact threat. Examples of adaptation measures that could be considered are summarized
in Table 6 , drawn largely from the report on adapting to impacts of climate change that
was part of the NAS/NRC America's Climate Choices Report (NRC, 2010; World Bank,
2011). The World Bank report also includes a number of examples of climate change ad-
aptations being implemented by the energy sector in other countries
In reviewing current knowledge about these and other possible adaptation options,
some common elements of energy sector strategies can be suggested (NRC, 2010 and
2011; SAP 4.5; Bierbaum et al., 2007; IPCC, 2007; SREX, 2011): elements of risk manage-
ment strategies, approaches likely to be taken, tools to help get the job done, and issues
that should be considered.
A. Management Strategies
Risk management is a major theme throughout NCA 2014, examined in detail elsewhere
(also see NRC, 2011). For energy supply and use, it includes the following commitments
by all major parties, public and private:
• Monitoring, evaluating, and learning from emerging experience with impacts
and responses. Given extensive uncertainties about climate change impacts at
particular times and in particular places and about payofs of speciic adapta-
tion strategies, it is important to observe, evaluate, and reconsider risks and
responses iteratively, sharing lessons learned as appropriate.
• Increasing lexibility in order to manage uncertainties: e.g., regarding population
trends, emerging impacts, and policy environments. Given uncertainties about