Political turmoil has come to the heart of the global movement to try to stop climate change — and for once, it has nothing to do with U.S. President Donald Trump.
Just weeks ago, the location of this year’s international climate conference, COP25, was switched from Chile to Spain after an outbreak of violent demonstrations in the South American country’s capital.
While some say the last-minute swap of Madrid for Santiago has already disrupted this week’s conference, another point of contention at the meeting will be the growing faction looking to increase the profile of adaptation as an essential goal of global climate efforts.
“At the international level, there is a very strong pushback against speaking about adaptation at all,” said Jo-Ellen Parry, an adaptation specialist at the International Institute for Sustainable Development.
Also referred to as resilience or resiliency planning, it is not difficult to see why some worry that adaptation merely offers an excuse to delay solving the real problem.
Instead, critics say, mitigation must be the priority for the limited amounts of climate change cash available: we must attempt to slow and stop the release of fossil carbon stored underground over billions of years, now being poured back into the atmosphere.
But Parry and others in the resiliency camp say that not only is adaptation economically essential, but by focusing attention on the huge cost of dealing with climate change as it already exists, the urgency of battling its causes becomes glaringly evident.
“The climate change adaptation issue is one that hasn’t yet been given a lot of attention in comparison to mitigation,” said Parry, speaking from her office in Winnipeg last week. “Even if we were to end all greenhouse gas emissions today, there will still be climatic change in the future — that is a given. So in some ways, we have no choice but to adapt.”
One of the reasons adaptation has made it onto the agenda, she said, is that many poorer and more isolated areas of the world that produce little carbon, including the Canadian Arctic, will be among the worst affected.
And the expected economic costs to agriculture, forestry, infrastructure and on coastal communities, when disrupted weather patterns lead to unexpected floods and drought, leaves governments no choice but to spend billions of dollars on adaptation.
Fifty Shades of Green
With the racy title of his latest paper published in the December issue of an International Monetary Fund publication on the economics of climate, Bank of England governor and Canadian Mark Carney lays out his case for adaptation.
But in Fifty Shades of Green, Carney — who was named to a new role as the UN’s special envoy on climate action and climate finance over the weekend — talks about adaptation and resilience from a financial perspective.
Carney refers to what he calls “the tragedy of the horizon,” where “the catastrophic effects of climate change will be felt well beyond the traditional horizons of most actors — imposing a cost on future generations that the current generation has little direct incentive to fix.”
But one of the tools for bringing those future costs into the present is the process of financial adaptation, says Gordon Beal, a climate resiliency specialist at the Chartered Professional Accountants of Canada. It’s an area where accountants, lawyers and other financial professionals are now developing a growing expertise.
And it means business success will depend on learning to operate under a very different regime, he says.
“If businesses and the organizations that operate in our economy are going to be competitive, they need to be thinking about how they’re going to shift the way they operate — adapt, effectively, to these changes,” said Beal.
While some critics have objected to kinds of adaptation that involve giving subsidies to fossil fuel producers to keep them operating in the face of market pressures, Beal points out that financial adaptation often leads, sometimes indirectly, to mitigation.
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In a business sense, adaptation is by no means just patching over the existing damaging effects of a changing climate. Instead, it can involve things like looking ahead to the expected business impacts of shifting costs or new regulations caused by both political and economic pressures, to prevent further climate damage.
And a company that does not take into account an effect that could be reasonably foreseen might well be held legally responsible for failing in their fiduciary duty, if they don’t do the necessary work to prepare.
Beal and Carney both point to the G20’s Task Force on Climate-related Financial Disclosures, established to remind companies to reveal to stakeholders the ways in which climate effects will alter their current and future value.
Deciphering the various business implications is complex, leading to a boost in business for specialized consultancies, such as Mantle and ESG Global.
While the crisis on the horizon may mean the short-term effect on share prices is negligible, for those who must plan for the long term — around pension funds, insurance and even people saving for their own retirement decades from now — understanding climate effects on an investment is of fundamental interest.
That means that rather than being an optional exercise, examining the effects of climate change on a business and its future — and how to adapt — is on its way to becoming compulsory, standard practice.
“It’s no longer a nice thing to do,” said Beal. “It is an essential thing to do.”
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