BUSINESS ON A WARMER PLANET

[Anonymous]

Business On A Warmer Planet
Rising
temperatures and later winters are already costing millions. How some
companies are adapting to the new realityThe normal bitter cold of
Canada’s frozen north is tough on man and machine, but it’s a boon for
Diavik Diamond Mines Inc. Temperatures of -40F make it possible to
build a winter “ice highway” over frozen rivers, lakes, and tundra.
That’s how the company usually hauls the thousands of tons of
equipment, fuel, and supplies it needs for its mining operation 200
miles northeast of Yellowknife. “We freeze our butts off, but we use
the climate to good effect,” says Diavik’s Tom Hoefer.Not anymore.
Winter temperatures this year were far above normal, so the road shut
down early. Plus, the ice never got thick enough to support the weight
of big trucks. Diavik was faced with a choice: Slow operations, or haul
everything up by air. Because of the mine’s value — it produces more
than 8 million carats a year — top executives opted for the expensive
airlift. Diavik had to find a Russian helicopter, one of the world’s
largest, to haul up a 500-ton hydraulic evacuator. Even then, workers
had to cut their giant shovel into pieces for transport and weld it
back together at the mine. Meanwhile, a Russian airplane has been
flying around the clock, bringing hundreds of tons of clay needed for a
protective dike, as well as other equipment. Diavik is spending
millions of extra dollars “all because of the short ice road season,”
says President Mark Anderson. “I think a lot of people are becoming
more convinced that climate change is real” and that we must adapt to
it.

“INEVITABLE”
Diavik’s
predicament is just one example of a new inflection point in the story
of global warming. Until now, the central quarrel has been over whether
— and how best — to reduce the emissions of carbon dioxide and other
gases that are responsible for climate change. Now it is clear to many
that any curbs will be too little and too late to prevent significant
warming. “No matter what we do now in terms of mitigation, changes in
climate are inevitable,” says Ivo Menzinger, head of sustainability and
emerging risk management at insurance giant Swiss Re.That means that
companies, governments, and ordinary people may have to make expensive
adjustments to cope with the predicted physical effects of climate
change, which include rising sea levels, shifting agricultural cycles,
and more severe storms. Adapt or Bust, warns the title of a new report
from Lloyd’s. “It will be huge. There will be so much we will have to
adapt to,” says Kristie L. Ebi, a scientist at consultant Exponent
Inc.Change has begun. Rising temperatures are melting ice roads,
forcing villages in Alaska to move, shortening growing seasons in
Africa, and causing oil companies to change the way they drill in the
Gulf of Mexico. “This is not [just] an issue our kids will have to deal
with. It’s happening now,” says Allan Carroll, an insect ecologist at
the Pacific Forestry Center in Victoria, B.C.Several years ago, Carroll
predicted that warmer temperatures could flip an ecological switch,
causing the loss of valuable forests of lodgepole pine to the mountain
pine beetle. Normally, the pests are held in check because newly
hatched bugs are killed by cold starting in late fall. That forces the
tiny beetles into a two-year life cycle and keeps them from attacking
trees at their most vulnerable time, in late summer. But when Carroll
charted rising temperatures in British Columbia, he realized that
early, killing cold was a thing of the past. That, he worried, would
enable the beetle to switch to a one-year life cycle and spread like
wildfire.His predictions came true. “This is one time when I’m unhappy
to be right,” Carroll says. Years of fire suppression have created
prime beetle habitat, large stands of same-age lodgepole pines. That
has made it easier for the beetle, which has now wiped out 22 million
acres of forest — an area the size of Maine — in British Columbia.
Within six years, scientists expect, it will have killed 80% of the
mature lodgepoles in the province and could be rampaging across Canada
and the U.S. “No natural forces can stop the beetle until it kills all
of its natural habitat,” warns Hamish Kimmins, professor of forest
ecology at the University of British Columbia. Right now, loggers and
sawmills are running flat out to process the dead trees. But the boom
won’t last. “Ecologically it’s not a disaster because the lodgepole
pine will regenerate,” says Kimmins. “But it’s a social disaster
because so many communities are dependent on logging and pines.”The
scientists who study the pine beetle say it presents a cautionary tale.
Other nasty surprises are expected to arise from the delicate dance of
nature and climate, affecting both public health and the economics of
entire regions. In China, for instance, the line below which there are
no hard freezes has moved northward. Since freezing temperatures kill
the snail that spreads the parasitic disease schistosomiasis, this
change is putting 20.7 million additional people at risk for the
illness. Field studies show that the snail can survive in the new
areas, says Guojing Yang, an infectious disease expert at Jiangsu
Institute of Parasitic Diseases in China. Meanwhile, in Alaska, a rise
of 9F in the temperature of the Yukon River since 1985 has been linked
to the spread of a salmon parasite. By the time the fish make it
upriver, they’re too diseased to be sold. That’s wiping out upstream
fisheries and contributing to an overall decline in commercial fishing,
explains Richard M. Kocan, professor of fishery sciences at the
University of Washington.Sub-Saharan Africa is also confronting new
burdens because of climate change. “Over the last several decades,
temperatures are up two degrees in Mali, and the rainy season has
decreased by more than a month,” says Exponent’s Ebi. That means the
growing season is too short for standard rice. Researchers are
developing a faster-maturing variety, but that’s only a partial
solution, health experts caution, since the dry season’s potato crop is
starting to fail as a result of increased heat. The economic system of
the whole country could collapse, says Ebi. “In the village I’m working
with, the elders know they are on the edge.”So are the residents of the
village of Shismaref on the west coast of Alaska. With melting
permafrost and the disappearance of sea ice that once protected the
town from pounding waves, “Shismaref is literally being battered to the
point of falling into the sea,” explained Sheila Watt-Cloutier, chair
of the Inuit Circumpolar Conference, in recent Senate testimony. The
townspeople have voted to move the entire village, which will cost more
than $100 million.Adapting to a warming earth is an urgent issue in the
Arctic, where a four- degree jump in average temperature over the last
30 years is an example of “climate change on steroids,” says Joel
Smith, a vice-president at Stratus Consulting. The state of Alaska is
setting up a blue-ribbon commission to identify risks and strategies
for adaptation, but businesses are already adjusting. The allowable
period for traveling on the tundra has shrunk from 220 days in 1970 to
about 100 days, changing the way companies explore for oil and gas.
Cruise lines are are trying to cope with shrinking glaciers and
vanishing sea ice. While the government is thinking about policies to
reduce climate change, “business is focusing on adaptation,” says
Robert Page, vice-president for sustainable development at Canadian
power giant TransAlta Corp. (TAC ) in Calgary. “How do we adapt to a
future of melting permafrost, less water, and more extreme weather?”

SEE NO EVIL
The
key, say Page and others, is recognizing that the future will not be
like the past. Hurricanes Katrina and Rita, for example, “toppled what
companies perceived as a worst-case scenario,” says Cindy Gordon,
refining-issues manager at the American Petroleum Institute. Drilling
rigs were destroyed by the storms, so the API has issued tougher
standards, such as anchoring platforms more securely and requiring a
certain height above the water. In San Francisco, planners are
exploring beefing up the storm sewer system to deal with heavier rains.
And the European Environment Agency warns of coming droughts and water
shortages. In the past year, attention to the problem of adaptation
“has taken a quantum leap,” says consultant Smith, who has helped
identify issues for cities like Denver and Aspen, Colo.Some climate
skeptics argue that the future is too uncertain to know what steps to
take. One federal government official says his Bush Administration
overseers won’t allow any talk about climate “change.” Instead, he can
attribute unusual weather patterns only to “natural climate
variability.” True, uncertainty is a given. Forecasters can’t tell if
this year will bring more Katrinas or more heat waves like the 2003
blast in Europe that left thousands dead and nuclear power plants
threatened with shutdowns for lack of cooling water. But when it comes
to the big picture, the proverbial canary in the coal mine “is dead,”
says Peter H. Gleick, president of Pacific Institute for Studies in
Development, Environment & Security in Oakland, Calif. “You can
look at any event in isolation and question it.” But examined together,
the only conclusion is that “we are faced with unavoidable,
irreversible impacts,” he says.For most companies, the issue is hardly
on the radar screen. Forty surveyed by Andrew J. Hoffman, professor of
sustainable enterprise at the University of Michigan, say they are
primarily concerned about meeting possible greenhouse gas emissions
curbs, not adjusting to climate change. But they and others are
beginning to grasp the probability of nasty weather surprises. That in
itself is “a positive development,” says Burr Stewart, strategic
planning manager for the Port of Seattle. Creating more capable
emergency management plans, as Seattle is doing, “is another form of
adaptation,” he says.Some environmentalists worry about talk of
adaptation. If people believe they can cope with climate change, why
bother to take action to reduce carbon emissions? The answer, given new
science suggesting more rapid climate change than expected, is that
preventive steps would make the task easier. “This is just the
beginning,” warns Peter Höppe, head of Geo Risks Research at Munich Re.
“As climate change is accelerating, we will have to adapt to many more
extreme events.”

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July 17, 2006 at 10:56 AM