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77 There are various alternative approaches that airports could consider to assess resil- ience to climate risks, but they all come with some important caveats. [Czajkowski (2016) outlines a few different risk modeling methods and describes some concerns with each method, finding that overall impacts are often still difficult to estimate and are poorly understood within the field of risk management.] One particularly important issue relates to indirect costs, which are often much more difficult to assess than the costs of physical damage, making overall risk evaluation a complex task involving substantial uncertainty (Litterman 2011). There have been multiple studies on how behavioral heuristics can affect the way airport planners evaluate the risk to their airports from climate events. Most common of these behav- ioral heuristics are the availability heuristic, in which planners overestimate the likelihood of events that have taken place recently, and myopic planning, in which planners only pay attention to those risks that seem likely to happen in the near future. Other heuristics that may negatively influence understandings of risk are the way a risk is described (we evaluate more accurately when we understand a risk better), confirmation bias (stronger tendency to believe or work with facts that fit preexisting beliefs), and belief persistence (the difficulty involved in changing oneâs mind) (Czajkowski 2016; Morrow 2009). As previously mentioned, many of the impacts of climate events are unknown, and often the same event can lead to a variety of different impacts depending on time and location. The wide variety of effects of a given climate event and the unknown future effects of climate change are two main causes of uncertainty within climate risk modeling. Heathrow Airport developed and applied a comprehensive methodology to assess climate risks for specific airport assets (Heathrow Airport 2011b). This study considered assets owned by Heathrow Airport Limited and involved a comprehensive risk assessment of climate-related risks to the direct and indirect operations of Heathrow. The approach incor- porated climate modeling, a literature review, and consultation with internal and external partners. The International Civil Aviation Organization (ICAO) issued a report on climate risk that contained descriptions of climate change adaptation and resilience for both the aviation industry generally and for airports specifically (ICAO 2016). As part of the report, Norwayâs civil aviation authority described a systematic risk assessment, of all of its airports, that included connected navigation systems and surface access to the airports. A simplified version of the Heathrow methodology was used as a starting point (ICAO 2016). A number of analysts have emphasized that risk analysis can and should be applied to more than just traditional physical infrastructure investments. For example, it has been suggested that A P P E N D I X B Other Climate Risk Evaluation Approaches
78 Climate Resilience and BenefitâCost Analysis: A Handbook for Airports society should invest in several different types of capital aside from physical infrastructure in order to become resilient, including financial capital (diversified income, secure wealth), human capital (workforce skills), social capital (effective governance), and natural capital (resilient land and water resources) (Michel-Kerjan 2015). A paper from the Wharton School at the University of Pennsylvania recommends that for each of these types of capital, a firm or government should evaluate the âfour Rsâ: robustness, redundancy, resourcefulness, and rapidity (Wharton Risk Management and Decision Processes Center 2015).