Climate Risk, Adaptation, and Resilience
This domain tests how you translate climate projections into asset-level risk and then into engineering or investment decisions. The exam favours questions that combine a hazard with an exposure calculation and a judgement about non-stationarity.
Core rules and concepts
- Risk decomposition. Risk = hazard × exposure × vulnerability. Physical risk is acute (flood, wildfire, storm, heatwave) or chronic (sea-level rise, temperature trend, hydrological shift). Transition risk covers policy, technology, market, reputational and litigation exposure.
- Scenarios. RCPs describe radiative forcing pathways; SSPs combine forcing with socioeconomic development. Typical disclosure set: SSP1-2.6 as a low case, SSP2-4.5 central, SSP5-8.5 as a stress case. Projections must be downscaled and paired with a return-period or severity measure.
- Non-stationarity. The historical record is no longer a sufficient basis for design; return periods shift, and a 1-in-100-year event in the baseline may become much more frequent under warming.
- Disclosure frameworks. TCFD, now consolidated into ISSB IFRS S2, requires governance, strategy, risk management, and metrics and targets, including scenario analysis and physical risk assessment.
- Adaptation and resilience. Hardening, redundancy, sectionalising, flood protection, backup power, demand-side flexibility, cooling-water constraints, heat derating of transformers and lines, wildfire management and permafrost stabilisation. Maladaptation shifts risk elsewhere or locks in vulnerability. Resilience metrics include SAIDI, SAIFI, expected unserved energy and value of lost load.
Worked example
A transformer rated 40 MVA at a 45 °C design ambient loses about 1.1% of rating per °C above that. At 50 °C ambient, derate = 5 × 1.1% = 5.5%, giving 37.8 MVA. Firm load of 32 MVA growing at 2% a year reaches that in n years, where 32 × 1.02^n = 37.8, so n = ln(1.181)/ln(1.02) ≈ 8.4 years. The transformer becomes a binding constraint in about eight years, well inside a 30-year asset life, which is what makes derating a climate adaptation issue rather than a routine loading check.
Traps that cost marks
- Reading a 1-in-100-year event as safe for 100 years, or as impossible twice in a decade.
- Conflating RCPs with SSPs.
- Presenting a single scenario as a forecast rather than a stress test.
- Treating adaptation and mitigation as substitutes.
- Ignoring compounding and cascading failures across interdependent infrastructure, and using nameplate ratings without ambient correction.