Climate Change and Big Business: Bridging the Gap
Personally, I’m fascinated by the effect of climate change on various U.S. industries. Many are big, powerful, and now vulnerable. Some of these sectors rely on weather patterns. After suffering through droughts, flooding, and superstorms such as Hurricane Sandy; big business sectors, I believe, are starting to see the need to engage more fully in the climate change discussion. I would like to discuss three industries today and why I think they should be more actively engaged in finding solutions to climate change.
I work in insurance, and I know firsthand that climate change is a direct threat to our industry. We deal with risk on a daily basis, and one of the largest risks insurers have to consider is severe weather. Hurricane Sandy and Irene caused nearly $100 billion worth of damage, and about a third of that was paid out by insurers. Insurance companies exist to protect people and businesses and they are fully prepared when severe weather strikes a community. However, more frequent, stronger storms and unpredictable weather aren’t good for business.
In June 2013, an insurance research group called the Geneva Association release a report called “Warming of the Oceans and Implications for the (Re)insurance Industry.” The report explained that rising ocean temperatures are shifting climate patterns. The report also called for a “paradigm shift” in the way the insurance industry calculate risk.
Traditionally, insurers have predicted the future by studying the past, but due to climate change the past can no longer reliably predict the future. Consider 2013, which many models predicted would be a record year for strong hurricanes: At peak season, we’ve seen very little activity. This is obviously a good thing, but with predictions being so out of whack, it says to me that insurers need updated risk models.
Many insurance providers have embraced the topic of climate change. With updated risk models, they can work closely with regulators to set more accurate price signals to balance both risk and consumer needs. Insurance companies can also help communities plan better for climate change and encourage more durable, sustainable homes and buildings.
The relationship between climate change and agriculture is a bit more complicated. The glaring reason for this is that the agriculture industry directly contributes to the problem of climate change by producing tons of carbon emissions. Globally, the agriculture industry accounts for roughly one-third of our greenhouse gas emissions, according to a report released in 2012 by the Consultative Group on International Agricultural Research. But while contributing largely to the problem, the agricultural industry relies heavily on weather patterns for growing crops. Droughts, floods and other severe weather can cripple farms leading to lost profit, food shortages and potentially famine.
In the US, agriculture produces roughly $300 billion a year in commodities and livestock, according to the U.S. Department of Agriculture. In a 2013 report, the USDA says that “predicted higher incidence of extreme weather events will have an increasing influence on agricultural productivity.” The agricultural industry clearly isn’t blind to the effects of climate change on its business. Companies have started developing adaption measures such as heat stress resistance in crops and animals and diversifying crop rotations. While I agree that adaption is necessary for production, it’s not an excuse to ignore the reality. Leaders in the agriculture industry need to take accountability and start developing measures to not just minimize effects on productivity but to minimize climate change overall.
In 2012, flights worldwide produced 689 million tons of carbon dioxide, according to Air Transport Action Group. It’s no secret that air travel isn’t the greenest activity, and this industry is a large contributor to climate change. However, with a greater risk of unpredictable and severe weather, air travel will undoubtedly be affected by it.
According to a report published in the journal Nature Climate Change, if climate change continues to progress, turbulence during transatlantic flights will occur with greater frequency and intensity by 2050.
Turbulence isn’t just an annoyance. Currently, it causes about $150 million a year in damage to planes and other expenses, according to Paul Williams, one of the report’s authors. If the frequency and severity of turbulence increases, it will cost even more. Severe weather will create delays, longer travel times, pricier tickets, and more passenger injuries. White-knuckle passengers may simply decide to stop flying.
Like the automobile industry, aviation recently has been more concerned with the topic of climate change. The Federal Aviation Administration (FAA) has its NextGen program which aims to reduce inefficiencies in air travel. However, with the number of global flights growing, it’s counteracting any moves toward energy efficiency. NextGen is a sign of hope but airline companies and airplane manufacturers need to get really serious about climate change solutions before the weather and climate create big problems.
These are only three industries, and there are many more that need to contribute to the discussions on climate change. I believe these industries need to support legislation to curb climate change and be more transparent with the problems they face. Only when big business recognizes the serious implications of climate change will we really begin solving the problem.
Christopher Beck is an environmental impact consultant for UNITS. He graduated with a degree from the University of South Carolina, and is now trying to make the world a cleaner, better place.
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