Climate risk as climate quakes

<p>2012 Trexler_Changing Nature of Business Climate Risk

Stresses are building in the climate system, stresses that current

climate science suggest will inevitably will be relieved through

physical or policy ‘climate quakes’, much as earthquakes

relieve tectonic stresses. Climate quakes have the potential to

dramatically affect long-term business supply chains, operations,

infrastructure, and even employee health and productivity. Based

on the science as we understand it today, we have to accept that

if we don’t relieve the climate stress represented by rising GHG

concentrations in the atmosphere, major climate quakes are as

inevitable as major earthquakes.

Like the constant earth tremors around the world, climaterelated

stress is already showing up around the world as ‘climate

tremors’, from melting glaciers to shifting species distributions

and pine beetle outbreaks. Some climate tremors are less easy to

spot than others, as natural variability in the climate system can

obscure them. But scientists tell us that more destructive climate

quakes are on the way in the form of changing water regimes,

more severe extreme events, and damaging ocean acidification,

among many others.

We are also seeing climate ‘policy tremors’, such as renewable

portfolio standards and CAFE standards – small manifestations of

climate-directed policy actions. As climate change manifests itself

in increasingly obvious ways, climate policy tremors will evolve

into climate policy quakes, resulting in greater disruptions and

increased business risk. Dramatic emissions reduction mandates,

or significant price on carbon, are two potential policy quakes.

Like earthquakes, it’s hard to predict precisely when we’ll see

major climate quakes occur, even if we can confidently anticipate

them. It could be next year, or it could be 20 years from now.

But like earthquake preparedness, the lack of certainty should

not stop us from taking steps to improve the resiliency of societal

and business systems, particularly given the likely correlation

between the severity of future climate quakes and businessdisruptive

policy quakes that will follow as after-shocks. This is the

almost inevitable outcome of our reactive rather than pro-active

political process.</p>