Downward counterfactual search for cascading losses

Loss exceedance curves have fat tails arising from cascading losses.  Even though such losses are rare, insight can be gained by considering alternative downward counterfactual realizations of historical events.  The use of downward counterfactuals provides a methodology for constructing climate change storylines (e.g. Climate Risk Management, 2021).

The downward counterfactual search for cascading losses can identify potential tipping points for disasters.  Such tipping points can arise from the perturbation of a historical system state through additional climate forcing, combined with human factors, such as human error, negligence or malicious action.   

Examples are given of how lessons learned from historical compound events, e.g. wind and heatwave, might have averted disaster.  The Californian utility, Pacific Gas & Electric (PG&E), narrowly missed liability for the 2017 Tubbs Fire in Northern California.  Increased inspection of their electricity power lines would have mitigated the risk of liability from future wildfires.  The following year, the Camp fire occurred, the deadliest and most destructive in Californian history.  PG&E were indicted for repeatedly ignoring warnings about its aging power lines and faulty maintenance, and in early 2019, PG&E were forced to file for Chapter 11 bankruptcy.

On 9 September 2023, Storm Daniel transitioned into a Mediterranean tropical cyclone, and made landfall near Benghazi in Libya, the following day.  The intense rainfall caused the collapse of the two Wadi Derna dams on 11 September, and the devastation of Derna.  Counterfactual analysis would have given prior warning. A Libyan hydrologist had pointed out in 2022 that the 1959 storm would have caused the failure of the dams, had they existed then.

Exploration of downward counterfactuals would augment societal resilience against climate extremes and compound events.