by Mike Foley
Climate change predictions have taken on an increasingly important role in national and international decision making given that the current economic and social course would lead to catastrophic warming. Given that many sectors of society contribute to climate change and the whole world will experience its impacts, such predictions must consider the domains of both physical laws and human interactions. Addressing #health, #wealth, and #earth in the shadow of climate change is a daunting task, and responses to climate change effects and predictions have ranged from aggressive mitigation to proactive or reactive adaptation.
Many businesses will be severely affected by climate change. Some, like the food or travel industry, will likely be able to adjust accordingly. Other industries, such as energy production, will be completely transformed by the need to prevent or contend with climate change. One example of this is the coal industry. Coal played a large role in powering the rise of the United States and has been an important source of energy throughout the world for centuries. However, this power has come with significant health risks and effects on global climate. According to Bloomberg and Pope in Climate of Hope, by 2011 coal was prematurely killing over 13,000 people a year and causing an additional 20,000 heart attacks and 217,000 asthma attacks annually in the US alone. This resulted in health care costs exceeding $100 billion per year. In addition to the effects on health, it also has been the largest environment and climate polluter in the United States. Due to these effects and cheaper, renewable alternatives coming online, market forces are driving the entire industry out of business.
In order to avoid getting caught in similar fates, major companies are increasingly turning to internal innovation or external investment in clean, efficient, and optimized energy and manufacturing processes. There are two factors that go into making these decisions: the chance of an event occuring and the economic impact if it does. With regards to the first point, most executives already realize the risks that climate change could present to their business. In her interview with Alyssa Goodman, though, she notes that predictions about such dire consequences can be difficult to act upon, and people tend to underestimate the probability that something bad will happen to them. Conversely, though, Dan Kammen notes that experts making predictions were often overconfident in the accuracy of their model, meaning that effects to businesses may be more or less serious than climate change predictions currently show.
So what is an executive to do? To help them see through the fog, Henderson has executives write down the probabilities of certain events occurring that could have a major effect on their business in a decision matrix. By visualizing such probabilities, it becomes easier to decide whether or not to allocate resources to invest in preventative measures.
On the economic side, businesses have invested most of their efforts in marketable endeavors. In other words, many businesses only invest in clean energy and efficient optimizations if they believe that it will make them more attractive to consumers. If not, they are much less likely to invest in innovations to counter climate change, instead relying on other companies and governments to develop the technologies that will enable effective mitigation/adaptation. Such a strategy is known as the “free rider problem”, and it severely complicates economic predictions.
For local entities, like cities, threatened by climate change, efforts to reduce emissions and boost efficiency have been much more vigorous. This is partially because cities are constrained geographically. For example, if the sea level rises above the level possible to keep out of New York City, trying to protect the city will require enormous expense. Consequently, it is in the interest of the city to invest in both mitigation and adaptation efforts to secure its future. This has led to the creation of C-40 cities, a coalition of cities around the world dedicated to reducing emissions and increasing efficiency over the coming years. In the words of Bloomberg and Pope in Climate of Hope, “Cities, not rural areas, are the nexus of the new economy -- and cities, as we have shown, also have enormous incentives to take action on climate change.”
Some argue that there will be some technological “silver bullet” that solves the issues raised by climate change predictions. Gina McCarthy and Dan Kammen disagree, though. They believe that only through measured, incremental improvements will it be possible to avert the worst effects of climate change. To spur these on, they believe that it is crucial to communicate the science better to enable adaptive policy making. In other words, McCarthy in particular argues that scientists ought to focus on how the average person will be affected by predicted effects of climate change, rather than focusing on the details of the model or talking about the plight of polar bears. Then by uniting climate change models with human behavior, more accurate predictions can be made that will yield more actionable results.