&#8220;Ready-Set-Go!&#8221; optimisation: Towards an ecosystem of cross-timescale financial services to transfer climate risk&#160;
Authors: Muñoz Ángel G. , Saklani Sheetal , González Romero Carmen , Soret Albert 
Published: July 2024

The joint effects of natural climate variability and anthropogenic climate change pose unprecedented impacts to contemporary society. Adequate management of present and future climate risk not only enables society to decrease climate impacts, but also to take advantage of climate-related opportunities that can appear in the future.&#160;One way to understand the risk is in terms of both the related climate hazards and society&#8217;s vulnerability to such hazards.&#160; Although there are multiple tools and services dealing with monitoring and forecasting of such hazards, even if those services were perfectly successful at identifying and forecasting the hazard occurrence and characteristics, the large vulnerability exhibited by society gets translated in most cases into a non-negligible climate risk.Since vulnerability is a function of exposure, sensitivity and adaptive capacity, controlling these components is key to decrease climate risk. A concrete way to increase adaptive capacity, and hence decrease vulnerability, is by co-developing a set of complementary services &#8211;an ecosystem of services&#8211; that are fit for the purpose, and tailored to the concrete decision-makers&#8217; demand. As such, these services should comprehensively consider hazards and vulnerabilities at multiple timescales, rather than focusing on one particular timescale (e.g. the next rainfall season, or the next few years).At the Barcelona Supercomputing Centre, the Earth System Services group is working on the co-development of an ecosystem of financial services to increase adaptive capacity and thus transfer climate risk, across timescales. The approach can be defined as an optimised &#8220;Ready-Set-Go&#8221; approach (Goddard et al., 2014), in which optimisation occurs using Dynamic Causal Network Theory, enabling the identification of the most efficient network configurations to efficiently communicate and use climate information produced by the different actors in the ecosystem.As part of this ecosystem of services, BSC is co-developing decision-maker-centred valuation approaches in which, for example, the quality and value of climate services is defined based on a combination of quantitative metrics to address multiple service attributes desired by the users of the services.&#160;&#160;The complementary financial tools part of the financial services ecosystems co-designed with decision makers at BSC involve instruments such as index-based (or parametric) insurance (IbI) and forecast-based action (FbA) -including forecast-based finance (FbF)-, with the particularity that the services&#8217; triggers and thresholds are dynamically defined across-timescales, in contrast with the traditional approach that focuses on more static or stationary definitions related to the immediate timescale of interest.&#160;Some of these services are being implemented right now in Horizon Europe projects such as Adaptation-oriented Seamless Predictions of European ClimaTe (ASPECT) and Piloting Innovative Insurance Solutions for Adaptation (PIISA), and in Blending knowledge from climate predictiOns and pRojEctions to mAke the Spanish energy sector more resilient to climate variability and climate change (BOREAS).