Climate change adaptation – start by looking for no-regret options

-CSR-Asia editorial by Helen Roeth

For a long time experts have been cautious in linking natural catastrophes and climate change. In a statement published late last year, Munich Re provides more clarity on the connection between the increasing number of natural catastrophes and climate change. Munich Re’s comprehensive database of natural catastrophes clearly indicates

“[…] a marked increase in the number of weather-related events. For instance, globally, loss-related floods have more than tripled since 1980, and windstorm natural catastrophes more than doubled, with particularly heavy losses from Atlantic hurricanes. This rise cannot be explained without global warming. Worldwide, 2010 has been the warmest year since records began over 130 years ago.”

This supports the argument that we will see more frequent and more intense extreme weather events from climate change, such as floods, droughts, and storms. It also clearly stresses the need for pro-active adaptation. Pro-active adaptation refers to anticipatory strategies that help build capacity to deal with the future impacts of climate change. These strategies acknowledge that certain impacts of climate change are inevitable due to historic greenhouse gas emissions.

The impacts of climate change in the region go beyond extreme weather events. Inevitably society and business in the Asia-Pacific region will see greater water scarcity, changing seasonal precipitation patterns, and warmer temperatures.

Scientific consensus on climate change impacts in the region is growing and leaving business with little excuse for inaction. However, many businesses may feel that the financial implications of climate change impacts are difficult to assess and that the related business risks are beyond the time horizons they usually work with. Yet, even these businesses will find a short- to medium-term benefit in building adaptive capacities. These would be no-regret adaptive measures that help build resilience to effects of current climate variability and to future impacts of climate change.

Climate variability refers to fluctuations in the climate system that can be observed in the short- to medium-term and that occur over smaller specific geographical regions. This includes currently observed extreme weather events such as cyclones, floods, droughts, and other hazards caused by weather phenomena. Notwithstanding climate change, businesses in the Asia-Pacific region are highly exposed to a diverse set of natural hazards; which include the afore-mentioned hydro-meteorological hazards, as well as geo-physical hazards such as volcanic eruptions, earthquakes and related tsunamis. Every year recurring hazards in the region bring about major disruptions in supply chains, and cause significant damages to business operations and assets. These include, for example typhoons in the Philippines; flooding in the region’s coastal mega-deltas such as in Jakarta, Indonesia; and droughts in Southwest China. There is great value in assessing business vulnerability towards natural hazards, extreme weather events, and in building capacity to manage related business risks through business continuity planning. In the short- to mid-term investments in business continuity will reduce the costs of business disruptions and damages. At the same time they represent a crucial first step in understanding long-term adaptation needs.

No-regret investments can also involve adaptive measures that have an immediate co-benefit such as reduced resources or energy consumption and releated cost reductions. For example, increasing efficiency of water consuming operations will reduce risks from future water scarcity while contribute to reducing operational costs in the short- to mid-term.

Under a broader understanding, “no-regret” adaptation includes measures that yield benefits regardless of future trends in greenhouse gas emissions and climate scenarios. These are in particular ecosystem-based adaptation measures that bring about synergies between climate change mitigation, adaptation, and the protection of crucial ecosystem services. Investing in the conservation or sustainable management of forests, for example, helps mitigate climate change as trees take-in and store carbon and act as so-called carbon-sinks. At the same time they help reduce the impacts of extreme weather events such as floods and landslides by regulating run-off. Mangroves, in particular, are crucial natural buffers against storms and can be a more cost effective means of coastal protection than engineering structures.

As the scientific evidence of climate change mounts, businesses are well advised to start assessing their vulnerability. Many of the no-regret investments made today will not only improve resilience in the long-term but help reduce costs in the short- to mid-term. This is of particular importance to businesses in the emerging markets in the Asia-Pacific region, which are prone to a diverse set of natural hazards, and where governments lack the capacity to make the necessary investments in disaster preparedness and risk reduction.

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