Drought. Floods. Violent conflict. The destruction of homes. Crop failure. The number of golfers soaring as heatwaves increase. These aren’t predictions; they’re already happening, according to the Intergovernmental Panel on Climate Change (IPCC)’s latest report, a two-volume tome on the impacts of climate change put together by 309 authors and citing over 12,000 publications, which was published on Monday.
It’s not like we haven’t heard it all before (except the golfers thing. The report actually does mention that) – but what’s interesting is the opportunities all this presents to businesses. Think of it like this: the businesses that really understand the challenges they face will be the ones winning in tomorrow’s marketplace.
And right now, the challenges are many and varied, particularly considering the fact that globally, we’re still pumping greenhouse gases into the atmosphere at a rate even worse than the IPCC’s imagined ‘worst-case-scenario’. Which means that even its most apocalyptic predictions may be milder than what ends up happening: picture coastal cities being wiped off the map, food production grinding to a halt, tropical diseases breaking out further north. Pessimistic stuff.
For businesses, this is a huge opportunity: think about the effects recent storms and floods had on industry in the UK. Flooded farms spelled mayhem for food production; powerlines came down, leaving 500,000 homes without electricity. Transport was disrupted, homes were flooded, small businesses were wiped out entirely. Channel 4 had a documentary bonanza, interviewing stranded airline passengers and disgruntled, damp-looking people under droopy Christmas decorations. Anyone who comes up with ways to prevent those things (particularly the documentaries) stands to do very well over the next few decades.
Running a business is all about understanding and managing risk. The risks we now face include unpredictable shifts in weather patterns that could ruin businesses. This is not a vision of a far-distant future – these are problems we’re seeing now and will see more of even over the next decade. As this rather neat diagram from the IPCC report shows, the big risks to the UK will affect our ‘livelihoods, health, and/or economics’. No biggie, then…
So what are the opportunities? The report focuses on adaptation – making sure we are prepared to deal with the changes that face us. For agriculture, this might mean trialing more weather-resistant crops; for urban planners, investing in flood defences; for banks, choosing assets with climate change in mind.
Indeed, entire new markets will open up. This could be anything from consultancy on climate-related risk to taking on weather-resilient infrastructure projects. New avenues will open up for weather forecasting and insurance – which are areas where the UK already has an edge over the competition.
Obviously, the future isn’t bright for everyone. Without sounding too much like that guy from off of The Day After Tomorrow, the worse the changes become, the more casualties there will be. As the IPCC’s more dramatic predictions start to come true, adaptation could become impossible for a lot of businesses.
The good news is that many markets are already on their way. The International Energy Agency reckons energy from some renewables is about to become cheaper than fossil fuels. Which is good: fossil fuels are about to get even more expensive.
While oil won’t run out completely in the next few decades, it’s becoming harder and more expensive to reach. This problem will only get worse – eventually we will have to rely on the elaborate, energy-intensive extraction of tar sands and oil shales to fill the gap.
As renewables become cheaper and policy stricter, investments in green transport and clean energy are starting to look more attractive. Investors who take the initiative and shift towards low-carbon technologies can and will lead a huge move towards the use of more efficient, cheaper and cleaner energy in industry.
But of course, it’s not just renewable companies and investors who can benefit from this. In a statement on Thursday, Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), urged the oil and gas industry to ‘become the leaders that take us to the new, sustainable energy mix’. One of the examples she discussed were the possibilities available for carbon capture and storage – methods used to make the burning of fossil fuels cleaner.
What the IPCC offered us on Monday was a set of clear, dry, scientific facts about what we’re likely to face in the coming years. It’s now in the hands of governments and industry to start making some serious decisions about what they’re going to do with this information. The lesson? Those who take this report seriously and act on it are going to be the winners.
- Sophie Haslett is a climate scientist based at the University of East Anglia. Follow her on Twitter here