The talk in the investment world is the impact of the Australian floods on coal markets. Supposedly once-in-a-century rains have inundated Australia's open pit mines, turning them into lakes that can be seen from space. Investors are now scooping up stocks in coal producers operating in Canada and other regions not affected by Australia's tumultuous climate.
I mention this because I am currently teaching an MBA course on sustainability at INCAE, Latin America's leading business school, and as I was preparing for class I ran into something interesting. In a 2008 Pew Center for Global Climate Change report entitled "Adapting to Climate Change: A Business Approach" there is a table on the potential effects of climate change on business sectors. There is a single line in the "mining" sector risks section that reads:
"Extreme weather events increase physical risk to business operations, for example due to flooding."
I don't know how many Australian mining executives read this report, but I suspect many are resurrecting it. Often it takes a crisis like these floods to get executive attention on sustainability issues, but business leaders with foresight have an opportunity to learn from the misfortunes of others.
Since the beginning of the commercial revolution in the 14th century, executives have built or lead their businesses in what scientists call the Holocene climatic epoch, a geologic time period that began at the end of the last ice age around 12,000 years ago. The Holocene has been good to humankind. It coincides with the rise of agriculture and civilization, through the industrial revolution to the information age today. But by most accounts it has come to an end.
Our opportunity to extend the Holocene probably ended when the Reagan Administration symbolically pulled the solar panels off the White House in 1986. I am not being political here and I am emphatically not blaming the Reagan Administration for climate change. My academic work on carbon lock-in shows how past energy and societal development have locked us into fossil fuels, as the ineffectual Clinton and Obama Administrations discovered. But extending the Holocene depended on taking actions to reduce our emissions of greenhouse gases decades in advance, in order to keep the carbon dioxide levels in the neighborhood of 350 parts per million. We are, as of today, at 388 ppm and rising at about 2 ppm per year.
The results of the recent climate negotiations in Copenhagen and Cancun give no sign that policymakers are going to take real mitigative action anytime soon, so executives need to ask what a post-Holocene climate means for their businesses. Some companies have already discovered the answer.
The beverage industry, for example, recognized their business is dependent on continuing supplies of fresh water. Extreme weather events, physical disruption to infrastructure or prolonged droughts all threaten unwanted supply disruptions. So companies like Coca-Cola, Heineken and Unilever are integrating water and climate variables into their strategic planning. Anheuser-Busch-InBev has completed comprehensive assessments of their climate risks and has funded research into steps that will allow them to adapt and insulate the business from climate disruptions.
Other sectors planning for business in a post-Holocene world include insurance, winter resorts, agriculture, utilities and oil & gas. Part of the preparation is traditional risk analysis to identify and mitigate hazards. But the other side is seeking business opportunities. Imagine the ignominy of the British producing better Champagne than the French. But climate change has already set that in motion, and British growers are gaining the advantage because of it.
So what steps can business leaders take to prepare? The first step is to build awareness in the organization about climate change and adaptation. Given the state of the political debate around climate, this can be the hardest step. But there are plenty of real life "as we speak" examples of industries being impacted by changes that can illustrate the risks to colleagues. The next step is to seek out the work scientists and governments have done on trying to predict what changes are likely. This understanding feeds into a comprehensive risk and opportunities assessment that can be used to create a list of potential actions and options. Doing this alone will put your company ahead of most. If your organization is convinced that the risk and opportunities are material, then strategic planning is the next step forward.
Many business people, when they see events like the floods in Australia, will ask, "Do we know it's caused by climate change?" Unfortunately, the best answer scientists can give is, "Well no, but there is a statistically significant probability that this event falls within our predictions." That's not very persuasive to people used to driving decisions with concrete investment ROIs .
For a long time it hasn't been persuasive to Australian governments either, who vociferously fought action on climate change. But that has changed. The Aussi government recently launched a $12.9 billion program to girder the country's water supplies against climate change and is requiring ongoing climate adaptation reviews every five years. As one government report puts it, "Already Australia faces a stark fact -- the opportunity to avoid climate change altogether has passed." The same is true for your business. So what will it look like in a post-Holocene world?
Cross posted at Forbes.com
Follow Gregory Unruh on Twitter: www.twitter.com/gregoryunruh
The problems of this new Epoch will only likely grown worse in coming years. Mitigation seems for now a ways off. The longer we wait to mitigate C02- the more adaptation will be needed- and with growing costs.
It involves the little recognized threat of solar flares and can attract wide support once understood.
See Green Light, and other articles at: www.aesopinstitute.org for an outline of the potential problem and a few surprising ways it might be addressed.
We are at the edge of both a climate disaster and a new age of low-cost, decentralized energy.
If we are quick enough to accelerate radically new science and technology, there may still time to avoid the worst.
The most important technology is out-of-the-box and needs independent laboratory validation before it will gain acceptance by most scientists.
But, there is a possibility that revolutionary, cost-competitive, products that provide electricity will enter the market in 2011.
Ironically, a truly adequate initiative to maximize the probability of that prospect could provide large numbers of jobs and help revive the economy.
The difficult is sometimes done immediately. The seemingly impossible may surprise many skeptics and take just a little longer.
Work emerging from laboratories all over the planet suggests that will prove accurate.
Cost-competitive alternatives will be the most realistic way to end the need for carbon fuels.
We can see that they do!
With a determined effort, future cars can become power plants when parked, selling electricity to pay for themselves.
These new possibilities may begin to stabilize and might possibly reverse the carbon count!
Bad logic right there. The fact that it "falls within your predictions" doesn't prove much one way or the other. Winter snow in Canada also "falls within your predictions", as does the sun rising in the east.
Time after time, the public has been harangued by climate change “experts” predicting all form of devastation due to anthropogenic global warming. The Greenland and Antarctic glaciers will melt, as will the sea ice covering the Arctic Ocean. Temperatures will rise by 2-6°C, perhaps more in higher latitudes. Weather patterns will shift, there will be droughts and torrential monsoon rains, cyclones will increase in intensity—where will it all end? Here's a thought, we might find the world a nicer place after a bit of global warming. In fact, given the general cooling trend seen over the Holocene (the period since the last glacial period ended around 14,000 years ago) and the Cenozoic (the time since the dinosaurs died, around 65 million years ago) human CO2 may be, in some small way, the only thing delaying another devastating ice age.
http://theresilientearth.com/?q=content/case-doing-nothing-about-global-warming
Your timing might be a bit off. Could you clarify?