Trillions of dollars at risk because central banks’ climate models not up to scratch

Climate research finds modelling used cannot predict localised extreme weather, leading to poor estimations of risk

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Trillions of dollars may be misallocated to deal with the wrong climate threats around the world because the models used by central banks and regulators aren't fit for purpose, a leading Australian climate researcher says.

Prof Andy Pitman, director of the Australian Research Council's Centre of Excellence for Climate Extremes, said regulators were relying on models that are good at forecasting how average climates will change as the planet warms, but were less likely to be of use for predicting how extreme weather will imperil individual localities such as cities.

The concerns, detailed in a report in the journal Environmental Research: Climate, were underscored by the Australian Prudential Regulation Authority's release on Monday of its corporate plan 2022-23. Apra plans to continue to ensure regulated institutions are well-prepared for the risks and opportunities presented by climate change".

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