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Why businesses need to avoid climate's 'inevitable surprise'

<p>It&#39;s time for business to commit to urgent and ambitious action to avoid the impacts of dangerous climate change.</p>

This article originally appeared at BSR, where it is the first in a series on a new initiative called "Business in a Climate-Constrained World."

In June 1962, the New Yorker began serializing Rachel Carson's "Silent Spring." The book derived its power from its fictional "fable for tomorrow," which described a storybook town's descent from natural harmony to a "spring without voices" as ecosystems and biodiversity collapsed due to environmental pollution.

Fifty years later, another powerful piece in a different New York magazine described Lower Manhattan as "dark, silent and underwater." Bloomberg Businessweek's cover story last year, "It's Global Warming, Stupid," offered a modern "fable for tomorrow," but this time, the culprit was dangerous climate change, prompted by the rapid accumulation of greenhouse gases in the atmosphere.

As we mark the one-year anniversary of Hurricane Sandy this week, it is time for business to commit to urgent and ambitious action to avoid the impacts of dangerous climate change and manage the climate impacts that we cannot avoid. This includes minimizing risks to business and threats to sustainability, building resilience to the climate impacts that are guaranteed to happen, and opening new opportunities by investing in a low-carbon future. The strengths and innovations of the private sector can lead the way.

What we must avoid: 2 degrees Celsius

The recently published Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report warning is unequivocal: "Since the 1950s, many of the observed changes are unprecedented over decades to millennia." These changes include warming of the atmosphere and ocean, rising sea levels, growing intensity and frequency of extreme-weather events and increasing concentrations of greenhouse gases to levels unprecedented in the last 800,000 years.

The IPCC's latest report provides the most detailed, authoritative assessment of climate change science to date. Its release coincides with a growth of economic analysis on the costs of climate change and calls for renewed political action to reduce greenhouse gas emissions. All of this work points to the same conclusion: We are currently on a path to a global mean temperature rise in the range of 1.5 degrees Celsius to 4.5 degrees C by the end of the century, and to avoid dangerous climate change, we must hold this temperature rise to a limit of 2 degrees C above pre-industrial levels.

The case for avoiding a breach of 2 degrees C is simple: The risks to business, communities and the environment will be significant and interrelated, and while scientific consensus has presented a dire picture if no action is taken, business has a unique opportunity for leadership if we all work toward the same goal.

The most critical social impacts [PDF] of surpassing this threshold relate to the availability of food and water, as well as adverse health effects, involuntary displacement and increased incidence of violent conflict -- all of which will disproportionately affect the world's poor. According to the U.N., if the temperature rises beyond 2 degrees C, 600 million people will face acute malnutrition by the 2080s [PDF]. Drought, cyclones, floods and sea-level rise will reduce arable land, destroy farming infrastructure, increase soil and water salinity and ultimately diminish agricultural yields.

The ecological impacts are also substantial. Approximately 20 to 30 percent of plant and animal species are likely to be at an increased risk of extinction. This could mean the destruction of entire ecosystems, which are not only important in their own right but also provide essential services to communities and business: Everything from medicines and clothing to irrigation and crop pollination relies on our complex ecosystems.

All of these social and environmental impacts will have an enormous effect on business. According to the World Economic Forum [PDF], Hurricane Sandy cost more than $70 billion in damages in New York and New Jersey alone. And according to a report by Mercer [PDF], the cumulative, global cost of climate-change-related impacts on the environment, health and food security will reach between $2 trillion and $4 trillion by 2030. In addition to the economic costs, there are obvious implications for business related to the reputational and legal risks that will be associated with new societal expectations and regulatory requirements.

A way forward for business

In 2007, the U.N. issued a report that called for us to confront climate change by avoiding the unmanageable while managing the unavoidable. That means balancing our work by aggressively reducing greenhouse gas emissions while simultaneously building resilience to the changes that are inevitable. Fortunately, business is well-positioned to put us on a path that reduces risks, helps individuals and communities adapt to climate change, and drives prosperity for all -- including shareholders.

As part of a new BSR initiative, "Business in a Climate-Constrained World," we will work with business to develop those strengths into real strategies. We will do this through a new framework modeled on the "stabilization wedges" originally developed by Princeton professors Robert Socolow and Stephen Pacala in 2004.

The Princeton model advocates 15 economywide emissions-related steps, or "wedges," that when taken together represent a giant leap toward stabilizing the climate. Socolow and Pacala describe actions on energy efficiency and conservation, shifting toward renewable energies and altering land-use patterns. BSR will translate these actions -- crafted with the public sector in mind -- into opportunities for the private sector by defining activities for eight industries vital in addressing climate change.

While our framework is still in development, we already know that some wedges will be common across all industries. These include actions to reduce emissions in the supply chain, changing the use and mix of energy that fuels industry and transportation, and shifting corporate finance toward low-carbon goods, services and technologies through procurement and investments.

Additionally, we will work with companies to define unique wedges that present the biggest areas of progress for their industry. For example, wedges in the agricultural sector might involve minimizing food waste and improving water management, while the information and communications technology sector might focus on reducing emissions from data centers, end-user devices and telecommunication networks.

Like Socolow and Pacala's wedges, BSR's approach will provide a menu of options that are significant but also feasible in terms of existing technologies, conceivable financial boundaries and the timeline necessary to avoid dangerous climate change. Our approach also will mean we don't need to wait for a climate silver bullet. Every company can take actions right now to make real progress.

Moving beyond an 'inevitable surprise'

Climate change is what futurist Peter Schwartz would call an "inevitable surprise" [PDF]. We know it is happening, that it is accelerating and that it is caused by human activity. We accurately can call it "inevitable" because our unprecedented level of scientific understanding allows us to predict both its likelihood and its potential impact. It will remain a "surprise" until we fully integrate the spectrum of risks and resilience into core business strategies.

At BSR, we remain hopeful, which is why we are rededicating ourselves to working with business and other sectors to make progress on climate change. Achieving this goal is a common responsibility and must include bold action by all -- especially the private sector.

We are committed to working with business to inspire new forms of leadership, build coalitions of change, and equip companies with the tools to avoid a global temperature rise above 2 degrees C and solutions that help us thrive in a low-carbon world. The pathway is possible, and it is time for us to take those steps.

Stormy skyline image by pisaphotography via Shutterstock.

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