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.