27 April, 2011

Climate change as a permanent driver of economy and society

Sergio Abranches

Looking at the sequence of extreme weather events from 2005 to the beginning of 2011 it seems clear that any trend analysis or future scenario has to look at climate change as a central driver.A few years ago a friend of mine, an economist who runs a successful consultancy business, asked for a meeting to discuss my view on climate change. He was intrigued by the fact that, knowing my work as a political risk analyst, I have started to write extensively about climate change. Especially my journalistic commentaries have centered, for several years now, on climate change and related issues.

I argued that looking at long range scenarios to assess forthcoming risks I realized that climate change had become a unremovable driver. In the 1980’s, one could still find 30-50 year scenarios that looked at climate change as a variable. At least one scenario would not feature climate change, and this absence would be one of the factors that would distinguish it from the other scenarios. From the 1990’s onwards one could not find any credible long-run scenario that did not take climate change into account. In other words no story about the next three or four decades would be credible if it did not include climate change. Scenarios can vary widely when other factors are examined. Climate change has to be in all, and can only credibly vary regarding its intensity, and the different solutions envisaged.

He told me that he was beginning to see it, when analyzing long-term agricultural trends.

Yesterday he coined a catch-phrase for one of his analysis looking at supply, demand and price trends: “extreme weather used to be a random factor, and has now become a permanent one because of climate change”. Maybe it has never been a totally random factor. But it is clear that it has been a permanent feature over the last few years.

I’ve looked at extreme weather events from 2005 to the beginning of this year, and was able to make an extensive list covering these seven years. For all of them I could list heavy storms; floods and landslides; anomalously cold or hot winters; heat and cold waves; severe droughts. Anomalies could be found in all years, and all around the world. A good aggregation from 2005 to 2009 here. For 2010, an year of extremes, two good sources are here and here. Another good source, from the insurance industry here. This year began with some deadly weather events in Sri Lanka, Australia, and Brazil.

This sequence of extreme events over seven straight years has had a disruptive effect on agricultural supplies. Demand continued to grow, but crop failures due to the weather has reduced global supplies. Prices have increased feeding a weather-related food price inflation. It seems sensible to admit that weather extremes have become a driver no mid to long-term agricultural scenario can disregard. it also means that agribusiness will have to invest in adaptation. Some migration of agricultural production from risky to safer areas is becoming likely. Obviously the reach of the climate driver goes far beyond agriculture. Loss of lives, infrastructure and property was widespread. Extreme weather raises the risk of disasters everywhere, and adaptation has become a general need. The insurance industry has introduced the climate driver in its calculus long ago. Cities are already preparing themselves for present and future events resulting of changing climate patterns.

No risk or trend analysis will make sense if it doesn’t take climate change as a permanent and ubiquitous driver.

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