How Much Does Climate Change Cost Companies?
A study to calculate the economic risk US industries face from climate change is being funded by New York City mayor Michael Bloomberg, billionaire Tom Steyer and George W. Bush-era Treasury secretary Henry Paulson, Bloomberg Markets Magazine reports.
The three men will also co-chair the study, which will look at the price tag of increased storms, droughts, floods and extreme heat.
It’s an attempt to persuade investors, policy makers and the public that the costs of curbing carbon emissions now are far less than the long-term costs of doing nothing to prevent climate change, the magazine reports.
Steyer founded Farallon Capital Management, a San Francisco hedge-fund firm with about $20 billion in assets, according to the article. Robert Rubin, who served as Treasury secretary from 1995 to 1999, and former Secretary of State George Shultz will serve as study advisers.
Climate and sustainability initiatives have been top priorities for Bloomberg, whose state suffered the costliest hurricane damage in its history.
In June, Bloomberg unveiled a $20 billion, 438-page storm protection plan spurred by Hurricane Sandy (pictured). The money, for projects including power grid improvements, building renovations and shore defenses, is already 75 percent approved. And the cost of not taking action would be far greater, Bloomberg argued at the time.
During his 12-year tenure as major, the city cut its greenhouse gas emissions by more than 15 percent, or 11 million metric tons, from 2005 levels.
Bloomberg created a number of green initiatives while in office, including legislation that requires commercial establishments to keep their doors closed when operating air-conditioning systems and a campaign to replace all of the city’s 300,000 streetlamps with LEDs. Bloomberg also has encouraged the adoption of solar generation by creating Solar Empowerment Zones within the city.
In his final year in office, Bloomberg has proposed a citywide ban on plastic-foam food packaging from stores and restaurants and is pushing a bill that would ban food waste from hotels, hospitals, universities and other large-scale producers, requiring them to compost, turn food waste into energy or otherwise recycle it.
The Steyer-Paulson-Bloomberg climate study announcement echoes US firms’ statements that climate change is affecting businesses’ bottom lines and their strategies.
VF Corporation — one of the world’s largest single purchasers of cotton, whose brands include Lee, Wrangler and The North Face — says much of the world’s cotton comes from areas that are expected to be impacted most by water scarcity and extreme weather, such as the Western US, China, Pakistan and India. The IPCC report published Sept. 27 makes firms’ risks associated with climate change even more clear, says Letitia Webster, VF’s director of global corporate sustainability.
If US businesses act now to reduce GHG emissions by an average of 3 percent annually, they can save up to $190 billion in 2020 alone, or $780 billion over 10 years, according to a report published in June by World Wildlife Fund and CDP.
Photo Credit: Hurricane Sandy in Brooklyn, NY, via Shutterstock
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