Climate Scenarios

What is a climate scenario?

AlphaGeo utilizes the most up-to-date predictive modeling set forth by the Intergovernmental Panel on Climate Change.

AlphaGeo reduces the complexity of interpreting and responding to climate volatility by generating meaningful data useful for location analysis and investment strategy. We begin by gathering raw, unstructured climate, socio-economic, and market data from an array of public and private sources. This data is meticulously engineered and refined into curated features that offer distilled insights into the impact of climate change.

Sets of related features are then consolidated into thematic indicators for calculation and analysis. These thematic indicators are bucketed into two main categories: Risk and Resilience. Risk Indicators assess the potential damage from physical climate hazards for any global coordinate based on historical data and future projections under multiple climate change scenarios (SSP2-4.5, SSP3-7.0, SSP5-8.5). Resilience Indicators assess a location’s readiness to absorb shocks as measured through a holistic range of attributes that are historically correlated to market performance.

Within Portfolio Analytics, the user has the ability to toggle between the three aforementioned climate change scenarios, each of which depicts a different socioeconomic "pathway," i.e., development across the 21st century.

SSP 2-4.5 - AlphaGeo's Low Emission Scenario

• update to scenario RCP4.5

• predicts radiative forcing of 4.5 W/m² by the year 2100

• CO2 emissions hover around current levels before beginning to decline by mid-century. Socio-economic factors follow their historical trends, with no significant change. Progress toward sustainability is slow, with disparate development and income growth. Under this scenario, temperatures rise by 2.7°C by the end of the century. Challenges for adaptation: high Challenges for mitigation: high

SSP 3-7.0 - AlpahGeo's Medium Emission Scenario

• updated scenario that closes gap between RCP6.0 and RCP8.5

• predicts radiative forcing of 7 W/m² by the year 2100

• Greenhouse gas emissions and temperatures keep regularly increasing, with CO2 emissions almost doubling from current levels by 2100. By the end of the century, average temperatures have risen by 3.6°C. Challenges for adaptation: high Challenges for mitigation: low

SSP 5-8.5 - AlphaGeo's High Emission Scenario

• updated scenario RCP8.5

• predicts radiative forcing of 8.5 W/m² by the year 2100

• Despite the world economy experiencing rapid growth, it is propelled by fossil fuel exploitation and very energy-intensive lifestyles. By 2100, the average temperature of the planet will have risen by 4.4°C. Challenges for adaptation: low Challenges for mitigation: high

Note: Both SSPs and RCPs have numbers associated with them (e.g., RCP 4.5 or SSP5-8.5). The numbers represent the expected change in radiative forcing to the end of 2100.

Note: AlphaGeo updated its scenarios from RCP to SSP as of November 2023 in accordance with most recent CMIP6 models. If you wish to learn more about the older framework, please contact Support.