Sustainability and Climate Risk (SCR) — Question 33

A large insurance company in South America expands use of climate scenario analysis. The company used RCPs in previous scenario analyses but now hires an actuary with climate expertise to incorporate SSPs in this process.
How can the actuary advise the insurance company use SSPs going forward?

Answer options

• A. Demonstrate how SSP and RCP trajectories typically show contradictory emissions trend trajectories.
• B. Combine SSPs with different RCPs to assess climate policy options.
• C. Eventually replace SSPs with RCPs by integrating underlying data assumptions.
• D. Use SSPs to provide alternative emissions pathways to RCPs.

Correct answer: B

Explanation

The correct answer is B because combining SSPs with different RCPs allows for a comprehensive assessment of various climate policy scenarios and their potential impacts. Option A is incorrect as it suggests a contradiction rather than a complementary approach. Option C is not valid since it implies that SSPs should be replaced, which undermines their role. Option D, while partially correct, does not highlight the value of combining SSPs and RCPs for policy evaluation.