Systemic Risk Briefing Note highlights complexity of interconnected, interdependent, and uncertain challenges

The briefing note published by the International Science Council (ISC), the United Nations Office for Disaster Risk Reduction (UNDRR), and the Risk Knowledge Action Network (Risk KAN), represents an integrated perspective of climate, environmental, and disaster risk science and practice regarding systemic risk.

In a globally connected world facing a climate emergency, old and new conflicts, and the long-lasting consequences of the COVID-19 pandemic, complex risks are the ‘new normal,’ according to Jana Sillmann of the University of Hamburg, Germany, and the Center for International Climate Research, Norway, who led the writing of the briefing note and is co-chair of the Knowledge Action Network on Emergent Risks and Extreme Events (Risk KAN).

“The dynamic nature of risk and its determinants is one important dimension of complex systems and associated systemic risks. In the briefing note, we argue that characteristics of systemic risk, such as the transgression of geopolitical boundaries and an emphasis on the interconnectedness of system elements, set systemic risks apart from conventional risk assessment approaches and risk governance,” she says. 

The recently published report of the Intergovernmental Panel on Climate Change (IPCC) Working Group II recognizes the interdependence of climate, ecosystems, biodiversity, and people, and the increasingly severe and interconnected risks to regions, sectors, and communities, outpacing our ability to adapt.

“As presented in the briefing note, the risk landscape is one of increasing systemic and compounding risks. The current IPCC report is an excellent case in point. It evaluates climate risks and resilience development paths against the current backdrop of large global trends, biodiversity loss, rapid urbanization, human demographic shifts, social inequalities, and a pandemic,” explains Reinhard Mechler, a coauthor who was also a lead author on the IPCC WG II chapter on decision making on risk.

Mechler adds that by assessing how climate impacts and risks are becoming increasingly complex and more difficult to manage through interactions with constraints, the IPCC provides solid evidence on systemic risks, as many natural and human systems are considered to be near their adaptation limits with additional limits emerging with increasing global warming. Transformation in terms of intensification of disaster risk reduction and climate adaptation will be necessary to overcome some of these limits. Systemic change, such as livelihood transformation and strategic retreat in the face of worsening climate hazards and risks are already being deployed.

“Understanding how risk is created and how its impacts can cascade across sectors and scales has been a major focus of research for some time. With global trends accelerating the pace of change, developing a common language and understanding of systemic risks and how we can enhance the governance of such risks is critical. This briefing note provides a stocktaking of current concepts and understandings of systemic risk from a range of perspectives and identifies areas for transdisciplinary collaboration,” says Anne-Sophie Stevance, senior science officer at the ISC.

The Briefing Note argues that climate risk assessments and adaptation strategies that focus exclusively on straightforward and clearly identified risks to individual nations and sectors are insufficient to deal with systemic risks such as climate change or a global pandemic. Only by reducing system vulnerabilities will the world be in a better position to reduce systemic risks.

“Cutting-edge approaches to risk management cannot afford to treat problems in isolation,” emphasizes Alex Ruane, from the NASA Goddard Institute for Space Studies, USA, who is a coauthor of the briefing note and a member of the UNDRR Global Risk Assessment Framework Expert Group.

The authors of the Systemic Risk Briefing Note further highlight that, given the uncertainties and complexity involved in identifying and analyzing systemic risks, no single streamlined approach will capture the complexity of interconnecting, compounding, and cascading risk. Instead, the authors suggest that the use of “toolbox approaches” that take an iterative approach to learning will be essential.

“Adaptive and integrative approaches using multiple lines of evidence can lead the way. A key challenge for analyzing systemic risks is the issue of focus and agency. Systemic risks often cut across boundaries and systems. Analysts must make relevant choices regarding the system under consideration. In addition, it is paramount to identify risk agency, which has been lacking in research, practice, and policy. The governance of systemic risks requires interdisciplinary and cross-sectoral cooperation and engagement from scientists, regulators, and stakeholders from private and public spheres,” concludes Stefan Hochrainer-Stigler, another IIASA coauthor.

Click here to access the full briefing note.

Reference

Sillmann, J., Christensen, I., Hochrainer-Stigler, S., Huang-Lachmann, J., Juhola, S., Kornhuber, K., Mahecha, M., Mechler, R., Reichstein, M., Ruane, A.C., Schweizer, P.-J. and Williams, S. 2022. ISC-UNDRR-RISK KAN Briefing note on systemic risk, Paris, France, International Science Council DOI: 10.24948/2022.01

Adapted from a press release prepared by the International Science Council (ISC).