Unpacking ClimateCheck's data methodology for better understanding of physical climate risk analysis
As the effects of climate change intensify, it is important for real estate investors, financial institutions and environmental consultants to understand the current and future impact of climate-related hazards on their assets. Access to reliable data and comprehensive risk reports will help investors avoid damage or total loss to their properties, manage their portfolios and strengthen their investment theses moving forward.
Working with a climate risk data provider grounded in rigorous science and well-rounded expertise is key to assessing risk to your properties and portfolio. ClimateCheck prioritizes transparency in sharing information about our methods and expertise. Information about our data and how we use it is readily available online, and anyone can access our instant risk assessments for individual properties.
ClimateCheck reveals and quantifies climate risk for property owners, brokers and investors through our risk assessments and reports. Our clients include environmental consultants in the real estate space, lenders and real estate investment trusts. ClimateCheck users can access information about climate risk and mitigation through our individual property risk reports, portfolio reports that illustrate risk across a bundle of assets, raw data available in various formats, and custom reports for specified areas or corridors.
Taking appropriate action to protect your portfolio begins with an assessment of risk that is based on the latest data and clear methodology. Here are answers to some frequently asked questions about our data methodology.
What is methodology?
Methodology refers to the systematic process of gathering, analyzing, and interpreting data. This process includes research procedures, theoretical frameworks or principles that guide the research, and the techniques and tools used to gather and analyze data. Rigorous methodology helps ensure high-quality and reliable findings.
Why does data methodology matter when it comes to assessing climate risk?
Rigorous methodology leads to credible insights about physical climate risk. These insights guide firms’ decisions about investment strategies and climate risk mitigation. Flawed or unclear methodology can lead to misleading conclusions, resulting in misguided business decisions that can lead to avoidable losses for stakeholders.
What is ClimateCheck’s climate risk data methodology?
ClimateCheck leverages data and models from government, academic and other public and institutional sources, such as the Intergovernmental Panel on Climate Change (IPCC) and the United States Geological Survey (USGS) to produce insights about climate risk.
We evaluate risk to individual properties, portfolios and specified areas across five different climate-related hazards — heat, precipitation, drought, flooding, and fire — to create a 1-100 risk score for each hazard. Our risk ratings reflect current and projected risk based on both historical data and projections through 2050.
For each hazard, ClimateCheck selects a climate model or multiple models, as well as additional data, to project risk. Different models may be better suited to different hazards. We use multiple models to gain a more nuanced understanding of risk in a particular area. For example, we model expected precipitation under different climate scenarios, as well as topography, to understand flood risk for a particular location.
What emissions scenarios does ClimateCheck consider?
ClimateCheck considers multiple greenhouse gas emissions and global socioeconomic change scenarios, including RCP4.5 and RCP8.5. The four Representative Concentration Pathways (RCP2.6, 4.5, 6.0, and 8.5) are used by the Intergovernmental Panel on Climate Change (IPCC) as trajectories for the future of greenhouse gas concentrations in our atmosphere. Each pathway represents a possible global outcome based on the cumulative volume of emissions released by 2100. The higher-numbered RCP scenarios assume the release of more greenhouse gasses into the atmosphere by humans.
What do ClimateCheck’s risk ratings mean?
ClimateCheck’s risk ratings consider the absolute risk of a climate hazard in an area, the projected change in that risk over time, and how risk compares to ClimateCheck’s larger area of coverage.
When looking at extreme heat, we start by determining the threshold for extreme heat in an area based on historical averages. We estimate this threshold for both wet bulb and dry bulb temperatures. Dry bulb is ambient air temperature while wet bulb is a measure of air temperature that takes relative humidity into consideration. We then consider the projected increase in the number of extremely hot days under different climate scenarios through 2050. We compare these statistics to the rest of ClimateCheck’s coverage area.
ClimateCheck measures the risk of individual hazards, rather than the risk of extreme weather events. So for example, we consider factors like heavy precipitation and high winds separately, rather than combining them into “hurricane” or “thunderstorm.” This is because the different risks posed by the hazards of precipitation and wind require different adaptation and resilience measures.
What expertise is necessary to ensure sound analysis of data?
In order to produce meaningful insights about the impact of climate risk on properties and portfolios, you need experts who both understand the science and can also draw real world implications from it. Our experts hail from various relevant backgrounds, including climate science, data science, real estate and technology and have access to significant computing and storage resources.
- Our chief analysts — Dr. Annie Preston, Dr. Laura McGowan, and Dr. Maximilian Stiefel — earned their PhDs in computer science, atmospheric science, and geography from UC Davis and UC Santa Barbara, respectively.
- Tulane University Professor of Sustainable Real Estate Jesse Keenan, climate scientist Dr. Daniel Swain, who holds appointments at UCLA and National Center for Atmospheric Research, UC Merced Professor of Climatology Dr. John Abatzoglou, and other leading academic voices in climate science and adaptation advise our work.
- ClimateCheck co-founders Cal Inman and Sam Eckhouse bring real estate and technology expertise to the team. Inman is a Bay Area developer and lecturer in Real Estate Development + Design at UC Berkeley. Eckhouse is a technology strategist focused on high performance computing for both private and public cloud.
You can read our team member bios here.
What data and models does ClimateCheck use?
ClimateCheck uses a variety of leading climate models., We use downscaled versions of these models to obtain risk estimates at a higher spatial resolution for more granular property-specific analysis.
Here are some of our main sources of data:
- LOCA statistically downscaled CMIP5 Projections for North America: Produced by researchers at UC San Diego, LOCA is a high-resolution and rigorous data source that we use for extreme heat, heavy precipitation and flood analyses. LOCA is a statistically downscaled data version of CMIP5, a suite of models that the IPCC has used in reports. You can find more information about this model here.
- Hazards for which we utilize this model: heat, precipitation, flood
- MACA CMIP5 Statistically Downscaled Climate Projections: MACA is also downscaled from CMIP5, and is used for extreme wet bulb heat and wildfire projections. It was statistically downscaled by one of our advisors, Dr. John Abatzoglou, a professor of climatology at UC Merced. You can find more information about MACA here.
- Hazards for which we utilize this model: heat, wildfire
- U.S. Forest Service Research Data Archive, Wildfire Risk to Communities Data: We use this data to help provide us with a picture of current wildfire risk, including information about burn probabilities and flame length. You can learn more about this data here.
- Hazard for which we utilize this model: wildfire
- USGS digital elevation model (DEM): A DEM provides a topographic, stripped down representation of the earth, and is created from an array of sources. You can read more about the USGS DEM here.
- Hazard for which we utilize this model: wildfire, flood
- Multi-Resolution Land Characteristics (MRLC) National Land Cover Database (NLCD): This database comes from the MRLC consortium, a group of federal agencies that create and organize granular land cover and land use information for various environmental and modeling purposes.
- Hazard for which we utilize this model: wildfire
- For drought, we currently use a model that is not publicly available, referenced in this Journal of Hydrology article.
ClimateCheck’s team of expert analysts monitor the latest science and available models. We add new data and tools as best practices evolve. Contact us for more detail on our models and data.
Learn more about our methodology.
ClimateCheck’s methodology pulls from a variety of trusted climate models and data sets to map climate-related risk for both entire portfolios and individual properties. Our team of experts wrangle data and different modeling scenarios to provide clients with a picture of current and future risk to their assets, and help them understand the implications of these insights.