Wednesday, February 26, 2014

Who Will Pay for Climate Change Consequences?

A number of initiatives, including the United Nations International Strategy for Disaster Recovery and the University of Notre Dame Global Adaptation Index, have been developing models to assess climate risk at various scales.

The Organization for Economic Co-operation and Development has been trying to put numbers on the cost of adaptation. The journal Nature Climate Change recently published a paper entitled “Future Flood Losses in Major Coastal Cities” full of some very sobering numbers. The World Economic Forum Global Agenda Council on Climate Change has developed recommendations on financing mechanisms for adaptation. These are just some of the initiatives underway to price the risks of climate-driven weather variations.

It is likely, however, that the extraordinarily complicated questions of what is at risk, what should be done about it and how much should be spent will be easier to address than the political question, who should pay and what’s their share. This is a question our clients, public and private, grapple with all the time as they consider their own risk attenuation. All but the most optimistic agree that substantial new revenue from existing sources dedicated to climate adaptation will not be forthcoming. There is hope that financial markets can develop instruments for investors that produce positive returns for adaptation investments. Without new funding sources, the best we can do is incorporate adaptation benefits into existing spending. But, how much do we spend on probabilities and what is the opportunity cost for that spend compared to existing needs? This is a very contentious political question. In politics, do we see the future considered as a constituent of decisions about the future? Sustainability demands the answer should be yes. For many, quite reasonably given the inability to know the future, the answer is largely no. But, there are future-minded companies out there that have risen above the political hubbub and recognized that protecting their assets from an uncertain, unknowable future is simply good business sense. I reached out to a few of my colleagues to get their thoughts and received some excellent examples of companies and organizations that have redefined this question in terms of sound business strategy.

The best mitigation and adaptation strategies are not stand-alone investments but part of a broader consideration of cumulative benefits.

The City of Blackpool in the UK reaped great benefits from its investment in a new seawall. It took advantage of the opportunity to reconnect the town to its famous beach; provide a better pedestrian experience; and create spaces for events, retail and community interaction. The improved community experience quickly translates into increased commercial success for neighboring businesses. Private and public sectors both win, even if the sea level doesn’t rise.

A similar story is true of the South Bay wetlands restoration in San Francisco Bay. The wetlands regeneration created significant water quality and habitat improvements that the South Bay public welcomed and was willing to invest in because the whole community loves to fish. While the public doesn’t really care about protecting itself from a fabled sea level rise and possible flooding, the wetlands generation will significantly mitigate damage in the event that this occurs.

The successful implementation of both these examples lies in their ability to articulate both public and commercial benefits that extend far beyond the simple cost/infrastructure equation.

The other compelling argument is business continuity. The study by Nature Climate Change estimates that the cost of flooding in the world’s 136 largest coastal cities could be as much as $52 billion a year over the next few decades (an increase of $46 billion a year from 2005 figures). Staggeringly, three US cities — Miami, New York City and New Orleans — could, between the three of them, be responsible for 31 percent of this total annual cost. These three cities stand out as having the most to lose given the contrast between their high wealth and the insignificant level of investment in flood protection.

Just looking at recent experience, the globe is littered with examples of catastrophic business losses in the aftermath of natural disasters. One thousand factories closed in Thailand after flooding. The Great East Japan Earthquake of March 11, 2011, had a serious negative impact on the Japanese economy — not only substantially reducing production in the regions directly affected, but also disrupting supply chains throughout Japan. This summer, the extensive flooding in Eastern Europe cost an estimated $18 billion in economic losses.

But it’s not all doom and gloom. My colleague Dale Sands’ response to my query was much more inspiring. He cited the example of a forward-thinking New Zealand utility enterprise that had reaped great benefit from placing adaptation considerations at the center of its business decisions.

Recognizing that earthquakes are a common occurrence in that part of the world, this company spent $6 million preparing for earthquakes. After the great earthquake of 2010, the utility realized an estimated savings of $60 million because the investments they had made in hardening their infrastructure ensured continuity of service in the wake of the disaster.

Not only did the utility company protect its own assets and revenue stream but its ability to continue functioning in adverse circumstances avoided the additional trauma the citizens of Christchurch would have experienced had they lost power, and also spurred the ability of the regional economy to recover more quickly. The brand equity such outstanding service in adverse conditions must have generated is surely a less tangible but equally important consideration for the future health of the company.

Presenting the case study at the UN Global Platform in May 2013, Roger Sutton, then CEO of the utility and now Chief Executive of Canterbury Earthquake Recovery Authority stated, “…despite the high cost in damages of the 2010 New Zealand earthquakes, the Christchurch economy had never stopped functioning, which was a testament to investments in disaster resilience.”

Our challenge as creators of the built environment is to help our clients recognize that disaster preparation is not an incremental investment but a fundamental element of the core investment strategy. We know that a unit of planning will reduce response actions by four to seven units of expenditure. We also know that the frequency of natural disasters is increasing, and that the majority of the losses are uninsured. Some companies will not put an emphasis on business continuity planning while others will. Some companies will survive and flourish while others will not. Healthy companies cannot thrive in stricken cities any more than a city can flourish without a robust economy. More


Wednesday, February 19, 2014

Is Lovelock a Seer and World Catastrophe Inevitable

James Lovelock is now 94 years old and has been making predictions about climate change since the 1960s, most of which, alarmingly, have come true – he thinks we have twenty years before “global warming will hit the fan.”

James Lovelock

What’s his best advice? “Enjoy life while you can.” Not the most reassuring of verdicts for parents and grandparents concerned about the future generations, never mind their own brief strut and fret about the stage.

So is Lovelock to be taken seriously, or is he just another doomsday prophet? Let’s take a look at his track record.

Lovelock has been, above all, resolutely independent and is most often given the epithet of “maverick.” Freedom to explore his own ideas has been his guiding principle. He invented the instrument that could detect chlorofluorocarbons (CFCs) which led to the detection of the hole in the ozone layer. He worked at NASA on the earliest explorations of Mars. He also claims he invented the microwave oven.

Most famously, he came up with the Gaia Hypothesis. Once widely ridiculed by fellow scientists, this now is the theory at the base of all climate science. It is now broadly accepted that our planet is a self-regulating system, as he proposed therein. Gaia proposes that all the living and non-living components on the earth are integrated to form a single and self-regulating organism. It automatically controls itself and maintains its own survival.

Controversially, he has always championed nuclear power, a position that used to earn him scorn, but has swung around to be increasingly re-championed. He sees nuclear energy as the only possible alternative to the use of fossil fuels. Maintaining that he is a Green and an Environmentalist, he qualifies the belief in nuclear power by explaining that our forebears only evolved in the first place on a rock which was fallout from a nuclear explosion.

He predicted that extreme weather will become the norm. He said that by 2040 London would be underwater and parts of Europe would look like the Sahara.

Lovelock also says it is too late now to halt the decline. Recycle all we like; never ask for a plastic bag, invest in wind farms, plant more trees, consume ethically, don’t fly; take the train. None of it will make one iota of difference. One of his most terrifying assertions is that we should have acted back in 1967. Anything we’re doing now, is almost “certainly a waste of time and energy.” Its all re-arranging those proverbial deck chairs on the Titanic.

His especial contempt is for renewable energy. Cover the entire country with windmills if you must, he postulates, they will never provide enough energy. He lives in the south of England. The source of the irreversible slide into catastrophe, according to Lovelock, is human’s capacity to stick their heads in the sand. They want to go on as they are. “They want business as usual.”

Of course it is nothing but “business as usual” in England this winter as large parts of the country lie submerged, and many homes and businesses face ruinous consequences. The problem that was “up ahead” is here, and now. The dead cannot even be buried as the graveyards are too awash.

51 percent of Brits in a poll conducted by the Sunday Times blame global warming for the UK floods and the leader of the opposition has said that climate change is now an issue of national security.

That current problem aside, mass migration, famine and epidemics are the forecast for the future. This is where Lovelock sees a role for nuclear power. Technology, he thinks, is the only salvation, and this probably will include synthesized foodstuffs. He also supports fracking, yet another issue that puts him at loggerheads with the green movement. He only sees it as a pragmatic measure, to buy some more time.

Oddly enough, Lovelock remains an optimist, and describes himself as “cheerful.” Those who have met him say he is wonderful company, full of zeal and love of life. In one interview he compared the state of things now with the world in 1938 on the brink of the Second World War. He remarked that the war was somehow liberating, as, once it got going, people “loved the things they could do,”it gave them a sense of purpose. He believes we are in a similar state today. Knowing something terrible is on the horizon, and having it actually happen, are two differing conditions, and people are better prepared to get on with it when they have to.

He says there have been seven disasters since humans evolved and the one that is about to happen, as before, will “separate the wheat from the chaff” but out of that, a person may emerge who “really does understand” and can “Live with it properly.” This is the bedrock of his optimism. At one of these catastrophic and violent junctures only 2,000 individuals were left. Evidently, they adapted and survived.

Quite recently, he did admit he had gone too far with his scare-mongering ideas and perhaps had “extrapolated too far.” This was when he wrote that only a few breeding pairs of humans would survive, and live a hunter-gatherer type existence in the Arctic. Billions of others would have been wiped out. At that point, the data did not correlate with his previous predictions, and there had been a slight slowing down in the temperature rise. He did admit he had made a mistake but insisted that it was only a deference. He gave these comments in an interview on MSNBC, adding Al Gore’s book An Inconvenient Truth had made the same mistake.

Lovelock has never fit the mould, and is an autodidact, he learned his science from library books. His parents were not well-off enough for him to go to university and so he got a job as a lab assistant. He believes if he had a conventional scientific education he would have been corralled into a speciality. He did eventually get to Manchester University, but he could only afford two out of the three years course in chemistry. Instead, he has remained a generalist, unique in these times. He does not believe he would ever have had the epiphany which led to the Gaia theory if he had been funneled into a narrow field of discipline.

That is not to say the Gaia theory was not rigorously tested. He tested it his own way, by creating a computer model of a planet he called Daisyworld,which could become self-regulating through natural selection. It was a simple model, and it irritated scientists at the time, but it has remained unfalsified. It was his close friend and neighbour, William Golding, author of Lord of the Flies, who came up with the name of Gaia. She was the earth goddess in Greek mythology.

Perhaps it is this mythical, rather romantic, name that has led to some becoming almost Gaia worshippers. To Lovelock, Gaia is science not religion and he refuses to have “faith” in it. He prefers to keep it at “trust.” The most difficult aspect of the Gaia theory is that it is not invested in the future success of the human race. Gaia seeks only to renew itself.

Humans and all their plans are irrelevant to the rebalancing of the system if they get in the way. Writer John Gray, who interviewed Lovelock in 2013, goes to far as to conclude that “finally dislodging the human animal from primacy in the world” could be seen as “completing Darwin’s work.” More

James Lovelock is best known as the father of Gaia theory; the idea that all parts of our planet form a complex interacting system, like a single organism. His new book depicts Gaia in trouble. In this interview Lovelock sounds a final warning for planet earth and enthuses about his upcoming space trip.


Monday, February 17, 2014

Providing science to European climate policymakers

IIASA models provided quantitative input to the recent proposal of the European Commission on climate and energy goals for 2030.

On 22 January, 2014, the European Commission agreed on a proposal for new climate and energy targets for 2030, including a reduction of EU greenhouse gas emissions by 40% below the 1990 level. Negotiations leading to the compromise were informed by an extensive impact assessment, for which IIASA researchers contributed data and model results to help policymakers understand future emissions, as well as the potential benefits and costs of various climate policies.

Estimating future emissions

IIASA’s Mitigation of Greenhouse Gases Program estimated mitigation potentials and costs of non-carbon dioxide (non-CO2) greenhouse gas emissions for all EU member states. Non-CO2 greenhouse gases account for about 20% of total greenhouse gas emissions in the EU. Current policies, which address waste, fluorinated gases, and air conditioning systems, are expected to reduce these emissions by 20% in 2030 compared to 2005. Using IIASA’s GAINS model, the researchers showed that at a carbon price of €45 per ton of CO2, further measures could reduce non-CO2 emissions by about 40%. A higher carbon price would lead to emission cuts of more than 50%.

IIASA’s assessment also highlighted the importance of the co-benefits of addressing both air pollution and climate change simultaneously, showing that cuts in particulate matter concentrations compared to present policies would reduce health damage from air pollution in 2030 by around €5 to 11 billion and air pollution control costs by more than €2 billion. For more information see MAG News: EU climate and energy strategy.

Changing land-use

Researchers in IIASA’s Ecosystems Services and Management Program meanwhile contributed research to the process, showing that changes in land use from agriculture and forestry could mean that European carbon sinks could decline by 12% by 2030. The researchers estimated greenhouse gas emissions from land-use, land use change and forestry using IIASA’s GLOBIOM and Global Forest Models. European lands currently take up more carbon as they emit, making them a net carbon sink. But by 2030, carbon sequestration is expected to decline as the agriculture and forestry sector develop. For more information, see the EUCLIMIT Project Web page.

More information

Report: EU Trends to 2050 Update (PDF).