Valentino PianaIstanbul, 26th February 2010
Adaptation StrategiesAdaptation Strategiesto Minimize Climate Risksto Minimize Climate Risks
inin CompaniesCompanies
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Contents
2. The pervasive impact of climate change on physical assets,ecosystems, infrastructure, people and business
3. Long‐run certainty and short‐run risk: the costs of inaction
4. Other stressors on the assets put at risk by climate change
7. Conclusions
1. A simple scheme of climate change
5. Adaptation strategies for businesses
5.2. Sector‐specific challenges and options
5.4. Global business and the international diffusion of climate‐related innovations
5.3. Local adaptation plans: the role of business
5.5. Financial and business models for adaptation
5.1. Exclusive or inclusive adaptation?
6. Turkey’s National Adaptation Strategy
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1. A simple scheme of climate change
Density/Value
Our adaption from Isoard,Grothmann and Zebisch, 2008.
Additional stressors
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2. The pervasive impact of climate change on physical assets,ecosystems, infrastructure, people, and business
exacerbatesexacerbatesexisting problemsexisting problems
generates generates entirely new onesentirely new ones
Climate change
WaterCoastal line
Rivers, reservoirs and sweetwatersEnergy
Ecosystems and ecosystem servicesInfrastructure
Scarsity, degradation, disruption, costsfor the following assets:
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2. The pervasive impact of climate change on physical assets,ecosystems, infrastructure, people, and business
exacerbatesexacerbatesexisting problemsexisting problems
generates generates entirely new onesentirely new ones
Climate change
Seasonal diseases and illnesses
Vector‐borne diseases (e.g. dengue, malaria,..)
Consumer stress and budget diversion
Work absentees and lower productivity
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2. The pervasive impact of climate change on physical assets,ecosystems, infrastructure, people, and business
exacerbatesexacerbatesexisting problemsexisting problems
generates generates entirely new onesentirely new ones
Climate change
Input degradation and costs (water, energy, landscape,…)
Business premises at risk of extreme events, sea‐level rise, etc.
Conflict in use of scarse resources
Production processes negatively influenced by weather
Loss in competitiveness for certain products
Logistic disruptions
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3. Long‐run certainty and short‐run risk: the costs of inaction (1)
0
40
80
120
160
180
240
280
2007 08 09 10 11 12 13 14 15 16
Climate change damage
Qua
litative scale
The science of climate is the same as the physics that
keep your plane flying and your mobile phone calling
the world.
The science of climate is the same as the physics that
keep your plane flying and your mobile phone calling
the world.
The rise of temperature in agreenhouse is a confirmed result of an experiment youcan replicate. By adding CO2it becomes even warmer.
The science of climate is the same as the physics that
keep your plane flying and your mobile phone calling
the world.
The rise of temperature in agreenhouse is a confirmed result of an experiment youcan replicate. By adding CO2it becomes even warmer.
Extreme weather events will increase in frequence and impact, albeit will remain unpredictable in exact
timing.
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3. Long‐run certainty and short‐run risk: the costs of inaction (2)
The time window of
opportunity to sell adaptation solutions will
be short.
0
40
80
120
160
180
240
280
2007 08 09 10 11 12 13 14 15 16
Climate change damage
Qua
litat
ive
scal
e
Clients not awareClients not awareand not willing to payand not willing to pay
Too Too late late ‐‐limits to adaptationlimits to adaptation
Window ofWindow ofopportunityopportunity
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0
40
80
120
160
180
240
280
2007 08 09 10 11 12 13 14 15 16
Climate change damage
Qua
litat
ive
scal
e
3. Long‐run certainty and short‐run risk: the costs of inaction (3)
To widen the window,it is necessary
to raise awareness in
advanceand to push for
strong mitigation actions
Clients awareClients awareAdaptationAdaptation in in
reasonable rangesreasonable rangesof costs andof costs andeffectivenesseffectivenessthanks to thanks to mitigationmitigation
Window ofWindow ofopportunityopportunity
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4. Other stressors on the assets put at risk by climate change
Climate change damage
Inadequate pipelines
Conflict for usefor agriculture,energy, population
Adaptationby protecting key assets
cannot distiguish the stressors
nor differentiate between
anthropogenic climate change
and climate in general.…
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5. Adaptation strategies for businesses
Vision, new processes, new products
Push to market, push to policymakers
Restructuring the supply chain / value chain
1
2
3
4 Upgrade skill and core competences4
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5.1. Exclusive or inclusive adaptation?
Isolation, closing borders, protection of key assetsOnly the rich and highly profitable human activities protectedNegative externalities on the rest of population and natural ecosystemsConflict
Isolation, closing borders, protection of key assetsOnly the rich and highly profitable human activities protectedNegative externalities on the rest of population and natural ecosystemsConflict
Co‐planningSolidarity networkInsurance schemesConditional emergency planand fast broad mobilizationReciprocal guaranteesNobody left behindNational and internationalcohesion
Co‐planningSolidarity networkInsurance schemesConditional emergency planand fast broad mobilizationReciprocal guaranteesNobody left behindNational and internationalcohesion
Adaptation strategy based on separation
and exclusiveness
Adaptation strategy based on solidarity
and risk sharing
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5.2. Sector‐specific challenges and options
AgricultureFishery ForestryEnergy generation and distributionBuildingHVACR‐ Heating, Ventilation,Air Conditioning and RefrigerationCity managementTourism
Industry/manufacturingFood processingWater provision
TelecommunicationsPublic sectorHealthcareInsurance
RetailTransport infrastructure
Logistics/distribution
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5.2. Sector‐specific challenges and options
Agriculture and livestock
Soil degradation, erosion, landslidesPests, crop predators and diseasesWater stress and local droughtsGMOs and water‐resistant cropsFood vs. non‐food productionsOrganic agricultureCommunity rehabilitation of degradated land
Soil degradation, erosion, landslidesPests, crop predators and diseasesWater stress and local droughtsGMOs and water‐resistant cropsFood vs. non‐food productionsOrganic agricultureCommunity rehabilitation of degradated land
Fishery
Overall reduction in fish catchUnsustainable fisheryRisk of extintion of local speciesChanges in temperature and acidificationReef corals extintionEcosystem irreversible damageAquacultureLocal sustainable fishing
Overall reduction in fish catchUnsustainable fisheryRisk of extintion of local speciesChanges in temperature and acidificationReef corals extintionEcosystem irreversible damageAquacultureLocal sustainable fishing
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5.2. Sector‐specific challenges and options
ForestryShift in species over latitudes and mountain heightsAcid rains destroying forestsOriginal forest vs. plantationSustainable forest managementIndigenous knowledge‐led forestryNon‐wood income generation activities
Shift in species over latitudes and mountain heightsAcid rains destroying forestsOriginal forest vs. plantationSustainable forest managementIndigenous knowledge‐led forestryNon‐wood income generation activities
Energy generation and distribution
Shifts in energy demandChanges in temperatures and operational conditions Increased competition with other sectors for waterThreats to coastal plantsParadigm shift towards renewablesBusiness models for mini‐grids (e.g. solar+low‐energywater desalinization, etc.)
Shifts in energy demandChanges in temperatures and operational conditions Increased competition with other sectors for waterThreats to coastal plantsParadigm shift towards renewablesBusiness models for mini‐grids (e.g. solar+low‐energywater desalinization, etc.)
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5.2. Sector‐specific challenges and options
Building
Shelter function under stressDifficulties in maintaining proper micro‐climatic conditions and comfort levelsEnergy‐intensity under regulatory, economical and societal pressureIntegration buildings‐surroundings‐natureTop‐quality buildings as eco‐buildingsLocally appropriate materialsReduced water consumptionSeparation grey, black and white watersLocal recycling
Shelter function under stressDifficulties in maintaining proper micro‐climatic conditions and comfort levelsEnergy‐intensity under regulatory, economical and societal pressureIntegration buildings‐surroundings‐natureTop‐quality buildings as eco‐buildingsLocally appropriate materialsReduced water consumptionSeparation grey, black and white watersLocal recycling
HVAC
Low energy solutionsHeat pumpsMono‐ or multi‐renewable local sourcesNatural or forced ventilation
Low energy solutionsHeat pumpsMono‐ or multi‐renewable local sourcesNatural or forced ventilation
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5.2. Sector‐specific challenges and options
City management
Compound effect of athmospheric pollution from industry and cars, temperature and humidity oncomfort, asthma, and other stressors Green urban areasUrban unconventional greening (e.g. vertical or roof greening)Waste managementBiogasLocally viable alternative mobility systems
Compound effect of athmospheric pollution from industry and cars, temperature and humidity oncomfort, asthma, and other stressors Green urban areasUrban unconventional greening (e.g. vertical or roof greening)Waste managementBiogasLocally viable alternative mobility systems
Tourism
Entire localities under threat (sea‐level, lack of snow,etc.) and loosing attractivenessExtreme negative events Reduced resilienceArtificial snow and other artificial ways to recreate the tourist experienceSustainable tourism
Entire localities under threat (sea‐level, lack of snow,etc.) and loosing attractivenessExtreme negative events Reduced resilienceArtificial snow and other artificial ways to recreate the tourist experienceSustainable tourism
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5.2. Sector‐specific challenges and options
Industry/manufacturing
Temporary or definitive lack or degradation of inputsHigher costs for water and energyDisruption in operationsRisk to production facilities located near the sea and inflood‐prone areasReduced consumer willingness to purchase
Temporary or definitive lack or degradation of inputsHigher costs for water and energyDisruption in operationsRisk to production facilities located near the sea and inflood‐prone areasReduced consumer willingness to purchase
Foodprocessing
Difficulties with inputsWeather‐dependent productionsDifficulties in exports and importsSanitary provisionsHealth of employees
Difficulties with inputsWeather‐dependent productionsDifficulties in exports and importsSanitary provisionsHealth of employees
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5.2. Sector‐specific challenges and options
Water provision
Reduced average rainfallShifting and unpredictable rainfall patternsDifferent locations for heavy rainsEmpty damsFurther stresses on river‐related ecosystemsAcidification of rainsLow‐energy treatement of waterPrices and availability of waterConflicts for waterRain harversting and treatments
Reduced average rainfallShifting and unpredictable rainfall patternsDifferent locations for heavy rainsEmpty damsFurther stresses on river‐related ecosystemsAcidification of rainsLow‐energy treatement of waterPrices and availability of waterConflicts for waterRain harversting and treatments
Telecommunica‐tions
Disruptions in infrastructuresEarly warning systemsAwareness raising systemsSmart grid
Disruptions in infrastructuresEarly warning systemsAwareness raising systemsSmart grid
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5.2. Sector‐specific challenges and options
Insurance
Higher insurance payouts resultingfrom damage to infrastructure byextreme weather eventsGreater uncertainty of risk assessmentsRe‐insurance at higher ratesFinancial stress
Higher insurance payouts resultingfrom damage to infrastructure byextreme weather eventsGreater uncertainty of risk assessmentsRe‐insurance at higher ratesFinancial stress
RetailDisruption in supply chains and transport infrastructureChanging consumption patternsLocations at risks
Disruption in supply chains and transport infrastructureChanging consumption patternsLocations at risks
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5.2. Sector‐specific challenges and options
Public sectorHigher expectations in the population for protectionNew regulationsPlanning skillsImplicit insurance Financial stressDifficulties in mediation of conflicts
Higher expectations in the population for protectionNew regulationsPlanning skillsImplicit insurance Financial stressDifficulties in mediation of conflicts
Healthcare
Shift in spatial and temporal distribution of diseasesHeat wave deaths in cities and other areasChange in distribution of vectors of infectionsWider range of stress‐related illnessesCarrying capacity of hospitals in case of extreme weather events
Shift in spatial and temporal distribution of diseasesHeat wave deaths in cities and other areasChange in distribution of vectors of infectionsWider range of stress‐related illnessesCarrying capacity of hospitals in case of extreme weather events
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5.2. Sector‐specific challenges and options
Insurance
Higher insurance payouts resultingfrom damage to infrastructure by extreme weather eventsGreater uncertainty of risk assessmentsRe‐insurance at higher ratesFinancial stress
Higher insurance payouts resultingfrom damage to infrastructure by extreme weather eventsGreater uncertainty of risk assessmentsRe‐insurance at higher ratesFinancial stress
RetailDisruption in supply chains and transport infrastructureChanging consumption patternsLocations at risks
Disruption in supply chains and transport infrastructureChanging consumption patternsLocations at risks
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5.2. Sector‐specific challenges and options
Transportinfrastructure
Roads and railways localised near the sea or in flood‐prone areasTemporary or definitive damage and disruptionIsolation of villages and other locationsBridges under threat of stronger winds and waves
Roads and railways localised near the sea or in flood‐prone areasTemporary or definitive damage and disruptionIsolation of villages and other locationsBridges under threat of stronger winds and waves
Logistics/distribution
Disruption of ground and marine transportation systems as a result of severe weather patternsInundation of transport routes
Disruption of ground and marine transportation systems as a result of severe weather patternsInundation of transport routes
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5.3. Local adaptation plans: the process
Area andits
surroundings
Area andits
surroundings
List ofexisting problems
List ofexisting problems
Exacerbation of existing problems
Exacerbation of existing problems
Interrogationof climatemodels
Interrogationof climatemodels
Brain‐stormingon totally
newproblems
Brain‐stormingon totally
newproblems
Shift fromother areasShift fromother areas
Implementation
TimingResponsibilities
Risks maps,adaptation options
Risks maps,adaptation options
Local Adaptation
Plan
Cost analysis,businessmodels,criteria
forchoices
Cost analysis,businessmodels,criteria
forchoices
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5.3. Local adaptation plans: the role of business
Area andits
surroundings
Area andits
surroundings
List ofexisting problems
List ofexisting problems
Exacerbation of existing problems
Exacerbation of existing problems
Interrogationof climatemodels
Interrogationof climatemodels
Brain‐stormingon totally
newproblems
Brain‐stormingon totally
newproblems
Shift fromother areasShift fromother areas
Risks maps,adaptation options
Risks maps,adaptation options
Local Adaptation
PlanImplementa
tion
Cost analysis,businessmodels,criteria
forchoices
Cost analysis,businessmodels,criteria
forchoices
TimingResponsibilitiesYour
organization
Skills accumulationSkills accumulationParticipation to auditsParticipation to auditsSupport to adaptation Support to adaptation
option evaluationoption evaluationTechnical support Technical support
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5.4. Global business and the international diffusion of climate‐related innovations
Diffusion based on product life cycleDiffusion based on product life cycle
Diffusion based on emerging countries’ bootstrapDiffusion based on emerging countries’ bootstrap
Option 1 Option 2
Globalization, the UNFCCC process, including the Bali Action Plan, the Copenhagen Accord (art. 11) all indicate that the international dimension of technology development and deployment has a crucial role for both mitigation and adaptation.
Innovation economics suggests two alternative pattern of international diffusion.
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5.4. Global business and the international diffusion of climate‐related innovations (Option 1)
Pioneers
Focus 4Commercialprototype
4Many versions(product innovation and imitation)
4Dominant design
4Cost‐oriented processinnovation
4Simplification
Early diffusion
Take‐off Maturity Decline
Core competence
4Formal andinformal R&D
4Creative imitation4Distribution
4Marketing 4Cheap labour4Economies of
scale
4Fully amortized capital
Typicalfeatures ofcountry
4High‐tech4Top
university
4Wide middle‐class4High education
widespread
4Core country
4Emerging country4Previous localizations
Sales
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5.4. Global business and the international diffusion of climate‐related innovations (Option 1)
Domestic production
Domestic market
Domestic production
Domestic market
Domestic production
Domestic market + Exports
Domestic production
Domestic market + Exports
Domestic and
FDI production
Worldwide market
Domestic and
FDI production
Worldwide market
Totally internatio‐nalizedbusiness
Totally internatio‐nalizedbusiness
Transplantedsupplier
Localsupplier
Globalsupplier
Localsub‐contractor
Importer
A firmperspective
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5.4. Global business and the international diffusion of climate‐related innovations (Option 2)
Large and amortizedInvested capital Small, to be repaid
Old industrialized country
Newly industrialized country
Stable or decliningFuture demand Strong growth potential
Defensive, pessimistMental framework Challenger, optimist
Vested interestsPolitical system Freedom at the frontier
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5.4. Global business and the international diffusion of climate‐related innovations (Option 2)
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5.5. Financial and business models for adaptation
Clients aware and willing to pay
Public mandate
Public support and asset swaps
1
2
3
4 Ad‐hoc taxation on polluters (domestically and internationally)4
4International funds ‐ the experience of NAPAs
and the Adaptation Fund5
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6. Turkey’s National Adaptation Strategy
In December 2009, Turkey has drafted the National Climate Change Strategy, soon to be followed by more detailed Action Plans.
In terms of adaptation, a selection of lines of activities is the following:
Short run (2010) 4Agricultural Drough Action Plan4Improving water quality4Livestock and crop sector
capacity to combat diseasesand pests
4Public health
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6. Turkey’s National Adaptation Strategy
In terms of adaptation, a selection of lines of activities is the following:
4Watershed Master Plans development4River Basin Management Plans4New agricultural practices4Vulnerable ecosystems, urban biotopes, bio‐diversity4Minimize impact, including through early warning systems, for floods, avalanches,landslides4Financial assistance4Risk management and risk maps
Medium term(2010‐2012)
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6. Turkey’s National Adaptation Strategy
4Watershed Master Plans finalized4River Basin Management Plans4Studies on volume‐based water pricing4Food production and processing export and imports 4Multi‐optional insurance systems4Public access to risk maps4Environmental impact assessment processes linked with legal regulation and plans4Use of architecture and construction materials appropriate for local climate 4Rainwater accumulation, utilization, recycling4Waste water efficiency for urban green areas
Long term(2012‐2020)
In terms of adaptation, a selection of lines of activities is the following:
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7. Conclusions
Climate change is devastating the future scenarios of development. Mitigation is an immediate priority and
a good investment for survival.
Adaptation will have an exponential growth, quickly passing from marginality to relevance
to dominance, until limits to adaptation are reached and the environment is so
degradated that we would need a Planet B.
But...
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7. Conclusions
Since
Business has a crucial role in bringing timely and adequate technical and economic expertise to adaptationand mitigation planning and implementation before it is too late.
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References
Isoard, S., Grothmann, T., and Zebisch, M. (2008). Climate Change Impacts, Vulnerability and Adaptation: Theory and Concepts. Paper presented at the Workshop ‘Climate Change Impacts and Adaptation in the European Alps: Focus Water’, UBA Vienna
T.R. Ministry of Environment and Forestry ‐ National Climate Change Strategy
World Business Council for Sustainable Development
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