Climate Change For CEOS

By Robert Dickinson

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With all of the controversy about climate change, how do I know it’s real?
Even though there is still debate in the political arena, there is overwhelming consensus in the scientific community that climate change is real. This consensus is based on multiple bodies of scientific evidence that have been exhaustively reviewed in a series of assessments conducted by both national and international bodies, including the leading U.S. scientific societies. Many signs of climate change are already clearly evident, including a significant increase in average global temperature, rapidly declining summer sea ice in theArctic, more frequent and severe weather disasters, earlier springs and later winters, the poleward migration of many species and coral bleaching due to warmer ocean temperatures.

Even if average temperatures do rise by a few degrees, why is that such a big concern?
While much of the discussion you hear about climate change focuses on averages, it’s the extremes that represent the greatest threats. For example, the increase in the average temperature during the summer isn’t as important as the number, duration and peak temperatures of heat waves. Likewise, the change in annual rainfall doesn’t matter as much as the number of droughts and storms that generate intense rainfall. The other important point is that the frequency of extremes is increasing much more rapidly than the averages. As a result, what might seem like a relatively modest rise in average temperature can drive a substantial increase in extreme weather events. The data show that extreme weather events have been becoming more frequent in recent decades, a trend that was underscored by the record number of weather disasters in the U.S. in 2011 and 2012.

How will climate change impact my organization?
Virtually every business and public agency will be affected by climate change. The more obvious impacts will be due to the direct effects of climate change such as higher temperatures, rising sea level and the weather extremes discussed above. More subtle impacts will be the result of how people, governments and the economy react to the direct effects. Many of the impacts will represent growing risks but there will also be emerging opportunities as well.

The following are some examples of how climate change will make itself felt:

  • Demand for air conditioning equipment will grow, and with it, peak demand for electricity.
  • Cities located in low lying coastal regions will face with a growing risk of flooding due to storm surge, intense rain and sea level rise, and flood insurance will become increasingly expensive.
  • Many locations in the middle of the U.S. will become less attractive places for employees to live due to more frequent and hotter heat waves, especially in the southern and southwestern states.
  • Airline traffic is likely to be adversely affected by rising energy costs and an increasing focus on sustainability while suppliers of conferencing products and services will benefit from the same trends.
  • Water agencies in the western states will have to cope with increasingly more frequent droughts.
  • Companies with factories or suppliers located in Asia will face a growing risk of supply disruptions due to flooding and storm damage.

 These are just a few of the ways in which climate change will have an impact. Every organization is different so you need to evaluate your own situation to understand the implications of climate change for your business or mission. Armed with that information you can then decide how best to increase your resilience to the risks and capitalize on the opportunities.

It’s also important to recognize that, due to the chaotic nature of the climate system, reliable predictions of exactly what will happen and when it will happen are impossible. As a result, it’s necessary to approach planning for climate change from a risk management perspective.

Is all of this likely to happen within the next ten years?
Some effects of climate change, such as the rapid decline in Arctic summer sea ice, are happening now.There is already a growing business in Arctic eco-tourism as a result and major energy companies are planning to exploit previously unreachable oil and gas fields in the Arctic, while others are concerned about growing threats to Arctic ecosystems.

Extreme weather events represent a significant threat today and will become a greater one in the future.Many companies have already experienced just how large an impact extreme weather event can have on their businesses as a result of the 2011 flooding in Thailand while corn and beef prices have been significantly affected by the lengthy droughts in Texas and the Midwest. Cities in the Northeast are still recovering from Superstorm Sandy and pondering how to better prepared for the next one.

Others, such as sea level rise, may take decades before becoming serious threats in many locations. This doesn’t mean they’re not important, just that we have more time to decide how best to deal with them.

How do we know that extreme weather events such as the floods in Thailand and the drought in Texas are related to climate change?
While it’s impossible to say that any given event is due to climate change, what can be said with confidence is that climate change is increasing both the likelihood of these events and their severity. A key driver is higher rates of evaporation due to higher ocean temperatures combined with the ability of warmer air to hold much more moisture. All of that moisture has to come down somewhere. In addition, higher temperatures provide more energy to power stronger and more intense storms. The climate models not only predict more total precipitation, although in some regions there will be less, but also much more intense precipitation. Intense summer monsoon rains led to the devastating flooding in Thailand and intense rain from Hurricane Irene, by then a tropical storm, caused major destruction in the Northeast.

Are the sustainability measures my organization is implementing helping?
Sustainability initiatives are definitely important. They reduce the rate of CO2 emissions while also providing cost savings and an enhanced public image for the organizations that undertake them. So far, however, they are not enough to arrest climate change, let alone reverse it. That will require aggressive action on a much broader scale, which doesn’t appear to be likely anytime soon. Given that reality, and the fact that considerable warming is already “baked in” to the climate system, you need to prepare for the very real impact climate change will have on your organization, and do so sooner rather than later.

How can Argos Analytics help me evaluate the climate related threats and opportunities for my organization?
Because the response of the climate system is inherently uncertain and because changes in the climate will also lead to changes in the global economy, the actions of national governments, and the behavior and attitudes of people, it’s impossible to provide accurate predictions of the effects of climate change. Argos Analytics provides tools and analysis that equip you to manage climate uncertainty. We can help you analyze the ways in which your organization is sensitive to climate change and identify emerging opportunities as well as growing risks. We have also developed the TRACE™ system, which estimates the likelihood that climate extremes relevant to you will occur within your planning horizon in the locations where you operate.