Editing IPCC:AR6/WGIII/Chapter-4 (section)

==== 4.4.3.3 New Information Becomes Available ====

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The science on climate change, its impacts and the opportunities to mitigate is continuously being updated. Even though decisions are no longer made ‘in a sea of uncertainty’ ( [[#Lave--1991|Lave 1991]] ), we know that new information will come over time, that may have significant bearing on the design and objectives of policies to shift development pathways and accelerate mitigation. New information may come from climate sciences (e.g., updated GWP values or available carbon budgets) ( [[#Quéré--2018|Quéré et al. 2018]] ), impact sciences (e.g., re-evaluation of climate impacts associated with given emission pathways) ( [[#Ricke--2018|Ricke et al. 2018]] ) or mitigation sciences (e.g., on availability of given technologies) ( [[#Lenzi--2018|Lenzi et al. 2018]] ; [[#Giannousakis--2020|Giannousakis et al. 2020]] ).

At the same time, economic and social systems are characterised by high degree of inertia, via long-lived capital stock or urban forms ( [[#Lecocq--2014|Lecocq and Shalizi 2014]] ), or more broadly mutually reinforcing physical, economic, and social constraints ( [[#Seto--2016|Seto et al. 2016]] ) that may lead to carbon lock-ins ( [[#Erickson--2015|Erickson et al. 2015]] ). Risks associated with long-lasting fossil-fuel power plants have been the object of particular attention. For example, [[#Pfeiffer--2018|Pfeiffer et al. (2018)]] estimate that even if the current pipeline of power plants was cancelled, about 20% of the existing capacity might be stranded to remain compatible with 1.5°C or 2°C pathways – implying that additional capital accumulation would lead to higher sunk costs associated with stranded assets (Ansar et al. 2013; [[#Johnson--2015|Johnson et al. 2015]] ; [[#Kriegler--2018|Kriegler et al. 2018]] ; [[#Luderer--2018b|Luderer et al. 2018b]] ).

In the presence of uncertainty and inertia (or irreversibilities), hedging strategies may be considered, that include selection of risk-hedging strategies and processes to adjust decisions as new information becomes available. The notion of hedging against risks is also prominent in the adaptation literature, as exemplified by the terminology of ‘climate resilient development’ ( [[#Fankhauser--2016|Fankhauser and McDermott 2016]] ) (AR6 WGII, Chapter18). There is also a growing literature on hedging strategies for individual actors (e.g., firms or investors) in the face of the uncertainties associated with mitigation (e.g., policy uncertainty or the associated carbon price uncertainty; e.g., Andersson et al. 2016 or [[#Morris--2018|Morris et al. 2018]] ). On the other hand, there is often limited discussion of uncertainty and of its implication for hedging strategies in the accelerated mitigation pathway literature. Exceptions include ( [[#Capros--2019|Capros et al. 2019]] ), who elicit ‘no-regret’ and ‘disruptive’ mitigation options for the EU through a detailed sensitivity analysis, and ( [[#Watson--2015|Watson et al. 2015]] ) who discuss flexible strategies for the UK energy sector transition in the face of multiple uncertainties.

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