Call of Nature - Climate Change

Sherwood Roland, while accepting the nobel prize for the chemistry that led to ozone depletion, had said “What is the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?”

Climate change has finally got the eyes and ears of the nations. They got together in Paris and decided on a ‘plan’. James Hansen, the father of climate change awareness, claims Paris agreement is a 'fraud' saying there is "no action, just promises”. Skeptics call it the Al-Gore method of profiteering. They also believe that climate models are too naïve and have limited predictability.  

 Like it or not, climate change has arrived. Climate change has become the next ‘in’ thing. As individuals and enterprises, we will be party to the impact, direct or indirect of this policy making on climate change. Will our sacrifice or contribution benefit the generations, time will only tell.

Demystifying climate change

Scientists believe that greater amounts of carbon dioxide in the atmosphere, and hotter temperatures on Earth, will significantly change the climate across the whole planet. This climate change is already beginning to happen in parts of the world. If you live in a chilly place like Alaska or Greenland, you might think a bit of global warming sounds like a great idea. But climate change doesn't necessarily mean things will get hotter. Some places will be hotter some of the time, but most places will simply see more erratic and extreme weather. That could mean heavier rainfall on occasions, more snow in some places, longer periods of drought, more storms and hurricanes, and more frequent heat waves.

Putting numbers to climate change

The first decade of the 21st century saw 3,496 natural disasters from floods, storms, droughts and heat waves. That was nearly five times as many disasters as the 743 catastrophes reported during the 1970s. About half of the $2390.7bn cost of disasters over the last 40 years was due to storms with hurricane Katrina and super storm Sandy, both in the US, accounting for $196.9bn of those damages. Albeit, there is arguable evidence to connect the increase of natural disasters to climate change, more proof needs to be tabled. It is also quite easy to argue against, because, it is not clear if the economic damage increases are due to climate change or just the fact that there is more stuff to be damaged now than in the past.

Climate juggernaut - A trillion a year and counting

Climate Change Business Journal estimates the Climate Change Industry is a $1.5 Trillion dollar escapade, which means four billion dollars a day is spent on our quest to change the climate. That includes everything from carbon markets to carbon consulting, carbon sequestration, renewables, biofuels, green buildings and insipid cars. For comparison global retail sales online are worth around $1.5 trillion. The $1.5 trillion global ‘climate change industry’ grew at between 17 and 24 percent annually from 2005-2008, slowing to between 4 and 6 percent following the recession with the exception of 2011’s inexplicable 15 percent growth, according to Climate Change Business Journal.

Policy and Opportunity 

There will be lot of policy directed towards climate in the coming years. It can be likened to the interest in a new toy. Policy makers can consider a range of potential instruments for promoting reductions in emissions of greenhouse gases. Alternatives include emissions taxes, abatement subsidies, emissions quotas, tradable emissions allowances, and performance standards. Policymakers also can choose whether to apply a given instrument to emissions directly (as with an emissions trading program) or instead to pollution-related goods or services (as with a fuel tax or technology subsidy).  

The world's richest 10% are responsible for half of all carbon emissions. The Paris summit wanted the rich countries to shell out USD 100 billion annually, to be given to developing countries to fix their problem. The funds, banks and institutional investors, who will align to these policies to look secular, will ensure a barrage of money into these initiatives. Large pension funds like the California Teachers fund has already expressed their dislike for fossil fuel related investments. 

The question that, if these initiatives will eventually better our World, is as unpredictable as nature itself. But, if you re-position yourself into something related to climate, then your chances of being in the midst of activity (and perhaps money too) are certainly high.