Exposure
Response
Vulnerability
Hazard
RISK
Baseline System Risk
Risk is the potential for adverse consequences.
Hazard refers to adverse physical conditions that may cause stress or damage. Examples include heat waves, wildfires, and floods. Hazard assessment evaluates whether local physical conditions are changing.
Exposure refers to the quantified extent of assets or systems in settings or places that could be adversely affected by a hazard. Examples include substations located in a floodplain or transmission lines in a hurricane-prone area.
Vulnerability is the propensity for adverse impact given exposure to a hazard. Examples might include flood depth-damage function or threshold-based temperature design ratings.
Response refers to purposeful or autonomous (independent) changes in systems or society that can increase or decrease risk by affecting one of the other components of risk. Examples include hazard reduction measures such as decarbonization, exposure reduction measures such as seawalls, or vulnerability reduction measures such as waterproofing or improved cooling efficiency.
Risk Calculation
What may cause stress or damage? Are local physical conditions changing?
What’s in harm’s way? How will that change over time?
What is susceptible to negative impacts? How might those occur?
Purposeful or autonomous changes to system
Reduced System Risk with Adaptations
Increased System Risk with Maladaptations
Risk Calculation
Adaptations are actions taken to reduce risk. They change the consequences of the hazard's interaction with the asset or system.
Adaptations can target the different components of risk. For example, elevating substations reduces exposure to the flood hazard. Winterizing equipment can reduce exposure and vulnerability to extreme cold.
Maladaptation results from efforts to address climate change that unintentionally increase risk. Building a seawall to protect a coastal asset from sea-level rise that floods downstream areas is an example of a maladaptation.
When assessing adaptation options, companies should consider effects of the adaptation beyond the asset or in the broader system context to avoid potential maladaptation.
REDUCED
REDUCED
REDUCED
INCREASED
INCREASED
INCREASED
Hazard
Exposure
Vulnerability
Response
What may cause stress or damage? Are local physical conditions changing?
What’s in harm’s way? How will that change over time?
What is susceptible to negative impacts? How might those occur?
Purposeful or autonomous changes to system
Sequence of assessments culminates in a calculation of risk
Purposeful changes to system
The risk propeller shows the components of system risk and how they intersect and can combine to influence the overall level of risk present. The baseline system risk assumes no explicit consideration of adaptations to reduce climate risk. There may, however, be ‘responses’ in the form of autonomous changes to the system or society resulting from other drivers. While we refer here to system risk, the same components apply to asset-level risk assessments.
Purposeful action can take the form of adaptation response to address an unacceptable level of baseline risk. Adaptations can act to reduce exposure, vulnerability, or both. Through this, the overall system risk will be reduced.
Despite good intentions, some adaptations have the potential to become maladaptations when considered in a broader context. Unintentional increases in exposure or vulnerability may result from decisions that may be designed to help locally but increase system level risk as they interact with other assets or system operations.
While the risk propeller is not a process, each blade of the propeller can be detached for individual assessment. These assessments often inform downstream efforts, starting from the hazard landscape. As shown here, knowledge of hazards can be used to effectively scope an exposure assessment, and to better target critical vulnerabilities. Ultimately, this data can feed into a response assessment, aiming to identify appropriate adaptation options for the hazards, exposures, and vulnerabilities of concern. However, companies need not proceed linearly through this sequence of assessments. For example, companies may start with a vulnerability assessment and determine that vulnerabilities to a specific hazard are so great, they decide to complete a hazard assessment to see if the hazard has become more or less likely. Finally, all of these assessments require diverse data inputs and carry uncertainty. Companies will need to consider and manage both as they complete their risk and response assessments.