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Adapting my business - Cómo evaluar la información climática en una empresa - Bernd Eggen
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Adapting my business - Cómo evaluar la información climática en una empresa - Bernd Eggen


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Bernd Eggen. Formerly senior climate change consultant, UK Met Office ofreció esta ponencia dentro del evento "Adapting my business" organizado por Factor CO2 y celebrado el 7 de junio en Casa …

Bernd Eggen. Formerly senior climate change consultant, UK Met Office ofreció esta ponencia dentro del evento "Adapting my business" organizado por Factor CO2 y celebrado el 7 de junio en Casa América, Madrid

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  • 1. How to evaluate climateinformation in a company Bernd R Eggen, PhD Climate Science Advisor
  • 2. Contents• Introduction• Concepts• Case Studies – Energy – Banking – Insurance – Transport• Conclusions07/Jun/2012 Adapting my business 2
  • 3. IntroductionIEA, May 2012: Global carbon-dioxide emissionsincrease by 1.0 Gt in 2011 to record high (31.6 Gt).“The new data provide further evidence that thedoor to a 2°C trajectory is about to close”IEA Chief Economist Fatih BirolClimate Change Adaptation ≈ Climate Risk Management07/Jun/2012 Adapting my business 3
  • 4. Introduction• 1997 – 2006 Schlumberger, including Carbon Capture and Storage• 2007 – 2009 UK Met Office Hadley Centre• 2009 – 2010 Halcrow (Engineering Consultancy)• 2010 – present BRE Climate Consulting Ltd• 2011 – present UK Health Protection Agency07/Jun/2012 Adapting my business 4
  • 5. Climate Observations - Temperature• Widespread warming has been observed over Spain since 1960 with greater increases in summer than winter.• Fewer cool nights and more warm nights, and fewer cool days and more warm days.• There has been a general increase in summer temperatures averaged over the country as a result of human influence on climate, making the occurrence of warm summer temperatures more frequent and cold summer temperatures less frequent. 07/Jun/2012 Adapting my business 5
  • 6. Climate Observations - Rain• There has been a reduction in the amount of annual rainfall in the Iberian Peninsula since 1960 with the largest reduction in the northwest and the lowest reduction in the east.• Spain is affected by precipitation extremes (i.e. droughts, hail storms, flooding).07/Jun/2012 Adapting my business 6
  • 7. Decadal Trends: Temperature & Rainfall Met Office Crown copyright07/Jun/2012 Adapting my business 7
  • 8. Influence of Anthropogenic Forcings Met Office Crown copyright07/Jun/2012 Adapting my business 8
  • 9. Climate Change Projections• For the A1B emissions scenario, increases in temperature of up to around 4°C by end of 21st century are projected over Spain, with the highest agreement between models towards the south of the country.• Projected decreases in rainfall over Spain could be >20% in the southwest of the country, and between 10% and 20% over other parts.07/Jun/2012 Adapting my business 9
  • 10. Impacts of Climate Change• Increases in water stress.• Uncertainty whether extreme short-term precipitation and associated pluvial flooding may either increase or decrease.• No firm conclusions with regards to changes in fluvial flood hazard, likely risk to decrease.• Sea level rise (SLR) impacts in coastal areas could be large in the absence of adaptation.07/Jun/2012 Adapting my business 10
  • 11. Emerging Issues• Hurricanes / Tropical Cyclones (Vince 2005, Gordon 2006, Helene 2006, Grace 2009, Otto 2010, Katia 2011).• “Medicanes” (tropical-like storms over the Mediterranean Sea), e.g. Tropical Storm 01M, 2011.07/Jun/2012 Adapting my business 11
  • 12. Concepts• Climate change (CC) manifests itself through changes in frequency of extreme weather events, new weather events (in historic sense) as well as in shifting averages (e.g. sea level).• CC projections have a degree of quantitative (i.e. meteorological parameters), temporal & spatial uncertainty.• In the short term climate variability is more important than climate change.07/Jun/2012 Adapting my business 12
  • 13. Concepts / Questions• Given the current uncertainties in climate projections, how can companies plan adaptive measures ? Reduce risk of mal-adaptation ?• How can a company evaluate key current and future vulnerabilities in their assets, operations, supply and distribution chains ?• Are there opportunities from climate change adaptation for your company ?07/Jun/2012 Adapting my business 13
  • 14. Concepts• Some companies may have a quantitative understanding how CC issues affect them, or only a qualitative idea of their vulnerabilities; some organisations may think CC is not an issue.• Insights into Climate Change Adaptation by UK Companies (CDP, Mar 2012) finds: 80% of FTSE 100 companies identify substantive risks to their business as a result of climate change.07/Jun/2012 Adapting my business 14
  • 15. Insights into CCA by UK Companies• The quantification of the financial implications of risks and costs of adaptation by corporations appears to be quite poor, with many risks unquantified. As a result there is a potential that these risks will not be incorporated properly into corporate strategies.• Less than half of FTSE 100 companies incorporate climate adaptation into their business strategies. Among those that do, the main focus is on assets, followed by logistics and finance. 07/Jun/2012 Adapting my business 15
  • 16. Framework - Types of Adaptation• Planned adaptation - the result of a deliberate policy decision, based on an awareness that conditions have changed or are about to change, and that action is required to maintain, or achieve, a desired state.• Reactive adaptation - adaptation that takes place in response to the consequences of a particular event.• Anticipatory adaptation - takes place before impacts of climate change are observed.• Spontaneous (or autonomous) adaptation - not a conscious response to climatic stimuli, but triggered by ecological changes in natural systems, and by market or welfare changes in human systems 07/Jun/2012 Adapting my business 16
  • 17. Types of Climate Risk Management• Scoping studies, then in-depth assessments;• Due diligence analysis;• Technical support for company reports;• Climate change advisory.• “Poor risk assessment leads to risks not being properly incorporated into strategic decision- making.” (from CDP report)07/Jun/2012 Adapting my business 17
  • 18. Adaptation StrategiesAdaptation strategies Description Examples of adaptive actionsPreventing losses Take action to reduce the exposure to Building sea walls, flood barriers climate impactsTolerating losses Accept losses where it is not possible or Accept reduced crop yield cost-effective to avoid themSpreading or Distribute the burden of impacts over a Insurance of assets larger region or population beyond thosesharing losses directly affected by the climate eventChanging use or Switch of activity or resource use to one New business opportunities better suited to the changed climate (e.g. tourism, agriculture,activity insurance)Changing location Migrate to an area which is more suitable Assets moved away from areas at under the changed climate risk of floodingRestoration Restore assets to their original condition Re-building or replacement of following damage or modification due to damaged assets climate 07/Jun/2012 Adapting my business 18
  • 19. Relevant steps for climate change adaptation07/Jun/2012 Adapting my business 19
  • 20. Project Design & ResilienceOpportunities for Projects Extreme Event Effect on Infrastructure / ProjectsFlood defences Sea level rise Inundation, loss of airdraft (e.g. bridges / cranes)Coastal areas, ports Tropical storms (e.g. Flood and wind damage, operational hurricanes) downtimeDrainage and sewers Flooding Flood damage, operational downtimeWater storage, reservoirs Drought -> water scarcity Operational downtime, subsidenceBuilding design Heat Waves Damage to materials, operational downtimeInfrastructure in Arctic regions Permafrost thaw SubsidenceTransport infrastructure [many of the above] [many of the above]Transport planning [many of the above] Shift in transportation patterns (e.g. tourism)Economic modelling [many of the above] [many of the above]Environmental modelling [many of the above, and [many of the above, and more] more] 07/Jun/2012 Adapting my business 20
  • 21. Case Study: Energy Phase 2• EP2 followed scoping study (with 3 energy companies), this was industry-funded, involving 11 UK energy companies, focusing on the priorities identified by the earlier study.• How climate change will affect energy generation; distribution and transmission, and demand. Study identified areas where further research is required. 07/Jun/2012 Adapting my business 21
  • 22. Case Study: Energy Phase 2• Improve demand forecasting and planning up to 10 years ahead.• Underground cables require “de- rating” because of higher soil temperature.• Efficiency of CCGT lowered with higher air temperature.• Urban heat island effect can exacerbate warming trends.07/Jun/2012 Adapting my business 22
  • 23. Case Study: Energy Phase 2Climate Change AdaptationPlanning Guide for EP2.This schematic gives users aguide to when the energyindustry should plan andadapt to climate change,based on the results of EP2.07/Jun/2012 Adapting my business 23
  • 24. Case Study: Barclays• Storm Shelter: Managing Climate Risks in Africa (commissioned by Barclays Bank).• Comprehensive overview of the economic impacts of climate variability & change in Africa (current and future climate risks).• Infrastructure adaptation opportunities.• The specific challenges for businesses in managing the impact of climate change.07/Jun/2012 Adapting my business 24
  • 25. Case Study: ABI• “The Financial Risks of Climate Change” used current climate and insurance catastrophe models to examine the financial implications of predicted global temperature rises of 2, 4 and 6 °C on the insured cost of flood and windstorm damage in the UK.07/Jun/2012 Adapting my business 25
  • 26. Case Study: ABI• Assuming a global temperature rise of 4°C: Inland flood component of insurance premiums could increase by around 21% across UK and insured flood losses in UK could rise by 14% to £633 million.• The average annual insured wind losses in the UK could rise by 25% to £827 million assuming a 1.45° southward shift in storm track across the UK. The insured wind-related loss from winter season windstorms in the UK occurring on average once every 100 years could rise by 14% to £7.3 billion.07/Jun/2012 Adapting my business 26
  • 27. Case Study: Transport Sector• Eurocontrol “Challenges of growth”.• Addresses potential economic and operational impacts of climate change on aviation.07/Jun/2012 Adapting my business 27
  • 28. Case Study: EurocontrolApart from physicalparameters (right),the study also looked at:• The effect of CC on public attitudes to air travel;• CC impacts on the air transport industry;• The impact of CC on aviation markets. 07/Jun/2012 Adapting my business 28
  • 29. Conclusions I• Climate change beyond 2°C temperature rise by end of 21st century becoming more likely, as mitigation efforts so far not effective.• Many companies have started to include climate change adaptation issues in their climate change risk strategy, especially where governments have provided policy support.• Utility companies have in general investigated risks more quantitatively than others.07/Jun/2012 Adapting my business 29
  • 30. Conclusions II• Important to investigate knock-on effects from climate impacts onto infrastructure, supply & distribution chains etc.; “360° view” required.• Be mindful of extreme events (“climate shocks”), not just slowly moving averages.• There are opportunities from climate risk management, not just threats.• Effective climate risk management makes a company more resilient & competitive. 07/Jun/2012 Adapting my business 30
  • 31. 07/Jun/2012 Adapting my business 31
  • 32. Further Reading I Climate change adaptation for UK businesses (MOHC & CBI) Climate change and underground cable performance (EP2) The Financial Risks of Climate Change (MOHC & ABI) Storm shelter: Managing climate risks in Africa (MOHC / Barclays)07/Jun/2012 Adapting my business 32
  • 33. Further Reading II Climate Change Adaptation & Resilience Study (Halcrow & WMCCAP) Adapting to Climate Change (Halcrow / Welsh Water) Spain – Climate: observations, projections and impacts (MOHC)07/Jun/2012 Adapting my business 33
  • 34. Further Reading III• Adapting to climate change in the infrastructure sectors (PWC, Nov 2010) URL infrastructure-pwc-full.pdf• Insights into Climate Change Adaptation by UK Companies (CDP, Mar 2012) URL cdp-adaptation-report.pdf07/Jun/2012 Adapting my business 34
  • 35. Some Key Terms Adaptation Reporting Power = ARP (Defra = Department for Environment, Food and Rural Affairs) UK Climate Change Risk Assessment = CCRA (Defra) National Adaptation Programme = NAP (Defra)07/Jun/2012 Adapting my business 35