Climate Protection Costs Now a Factor in Long Term Planning

Climate Protection Costs Now a Factor in Long Term Planning

Everyone’s been talking about the climate, or at least the weather, recently. Indeed, whereas one weather event does not indicate a great deal (as the chaotic nature of the weather defeats most predictions) public opinion about climate change appears to be shifting in support of preventative measures. So big business is starting to take note and factor in climate protection costs in their long term planning.

The recent polar vortex in North America, unseasonal warmth in Europe, and extreme heat in Australia have people looking at weather patterns with renewed interest, and what they see is a global pattern of extreme behavior. These events were all statistical outliers, which could be dismissed as normal variation. However, when you are faced with what looks like a new form of “El Niño” that passes over the Arctic, rather than the Atlantic Ocean, it begs a question whether there will be large-scale repeats of these “statistical outliers”.

melting ice
Melting ice

The underlying logic of climate change, that the atmosphere stores energy, and when there’s proportionally more carbon dioxide in it, it stores more, is more widely accepted than ever. Also with the opening of the Northwest Passage through Canada and around Alaska, the basic logic that ice melts when it gets warm is undeniable. However, the pattern of freezing and thawing in the Arctic is not fully understood, and solid predictions remain unattainable.

Now all of this is being watched by big business, and they are starting to plan for climate change, and the inevitable government legislation to combat its effects.

4% GDP

A recent United Nations (UN) report expected that 4 percent of global gross domestic product (GDP) would be being spent on climate change costs by 2030. Which demands governments factor it long term planning.  The majority of world leaders are now in agreement with the principle that global temperatures should not be allowed to climb by more than two degrees, which is predicted to mean a 40-70% reduction in the emission of heat-trapping gases by 2050, in comparison to 2010 levels. When human population growth is factored in between 2010 and 2050, these numbers start to look massively challenging. Some experts think that these levels of reduction are technically attainable, but that this would involve massive investment in new cleaner technologies, hence the estimate of 4 percent of global GDP. This spending will mean costs for some businesses, and profits for others, as governments look for solid companies with a strong track record to implement changes, rather than the hodge-podge of small start-ups with big ideas that currently exist.

Given the significance of this, a group of Democratic senators may have been right to complain to Fox News, CBS News, ABC News, and MSNBC, that climate change only had 27 minutes of coverage on Sunday shows in 2013. As these shows attempt to be responsive to both the public and advertisers, it might be interesting to know what drove the limited coverage, public denial and disapproval, or corporate interests.

Parts Per Million

The UN report is based on models that principally examine the amount of carbon dioxide in the atmosphere in parts per million (PPM). The magic number is 480 ppm, this is the “you shall not pass” line. Although some believe that a rise to 530 ppm and subsequent drop to around 480 ppm is far more likely. The problem with knowing exactly what will happen is that the amount of carbon dioxide in the atmosphere is determined in part by emissions, and in part by the natural absorption of carbon, via the global carbon cycle. In other words, trees and plants use carbon to grow.

measuring concept
BIOMASS mission measuring concept

One of the uncertainties in modeling the carbon cycle globally is knowing how much biomass is actually present on Earth. Satellites that take optical images are typically used for estimates of biomass, where certain types of forests are assigned a density per unit area, and then pixels are counted to generate an estimate via a calculation (area in pixels x density per unit area). However, this technique is not considered particularly accurate, and so a much more direct system of measurement has been proposed by the European Space Agency (ESA).

This proposal is for a radar based satellite, that can not only detect where biomass is on the surface of the Earth, but by careful analysis of the returned signal, can also give a strong indication of the density of that vegetation. Unfortunately it may be five years or more before BIOMASS mission is actually operational.

The long-term planning around climate change is starting to increase, and the costs are starting to add up as a major factor.

By Andrew Willig

Sources:

Bloomberg
MSNBC
ESA