On the Inherent Ambiguity of Extreme Event Costs Attributed to Climate Change

Abstract

The excess costs of an extreme weather and climate event exacerbated by climate change are inherently ambiguous, even under perfect knowledge of climate and society, because these costs can be attributed by considering whether the event might not have happened (frequency change) or whether it might have been weaker (intensity change). Despite this inherent ambiguity, these approaches can be related by embedding each within a theoretical framework of an event arrival process, whence each approach provides a different estimator for a common quantity: excess costs per time, as needed for determining loss and damage. Each approach can consistently estimate the true excess cost rates, but only subject to restrictive conditions on their methods (some common examples of which are found to be inconsistent) and on climate and society (for which some conditions have never been evaluated). Seemingly minor technical choices can have major effects on the interpretation of attributable costs, with broad implications for their intended uses in litigation, reparations, adaptation, and planning.