Self Destruction by Climate Change?
First published 13th January 2020 as part of Forecast2020
by Osama Zahid
Global | Understanding Your World
There are environmental changes taking place all around us and the devastating effects have shown themselves frequently in 2019. As it stands, the occurrences of extreme weather conditions have been rising, the global temperature is increasing at a faster rate than compared with previous years and natural resources are being exhausted at an alarming rate. Climate Change risk is of key importance to business leaders, not just physically in their operating environments but also in the form of economic threats related to climate change transition and the change in global resources usage.
Should we be concerned about the Climate Emergency?
The Climate Emergency is an enigma that is not merely limited to a specific individual or community. Rather, the effects of Climate Change can adversely affect livelihoods on a global scale. The seriousness of this issue extends globally leading to global crises in the form of political unrest, immigration related regional discrepancies, and the collapse of the international community altogether.
Climate Change, in its truest sense, is simply a term that indicates the results of problematic human activities. It indicates the geopolitical risks associated to government policies and lack of implementation that can trigger a state of chaos.
We need to reduce our emissions 45% by 2030 if we want to keep global warming to no more than 1.5 degrees Celsius. There is very little chance of that happening.
Essentially, Climate Change points towards those particular government and private institutions that are using illegal, irresponsible and superficial means of generating economic growth. These methods are primarily what is causing environmental decay, thus, paving the way for destruction.
According to the World Economic Forum, “In East Asia and the Pacific, environmental risks are the leading concerns for doing business, with “natural catastrophes” and “extreme weather events” ranking first and fifth respectively. On a country basis, “natural catastrophes” were ranked first in Japan and New Zealand, while in Indonesia and the Philippines they ranked third. These results are hardly surprising, given that the broader Asia Pacific region witnessed 50% of the world’s natural disasters in 2018.”
The current situation
The world is already witnessing unusual occurrences of climate emergencies more frequently than ever. In current times, it can be said that we, as a global community, are standing at the brink of chaos. With forests being cut down and ice caps melting, we could very well witness severe environmental changes in the upcoming decade. All of these alterations are a direct consequence of human activities that are taking place with governments not being able or more appropriately, unwilling to impose and implement strict environmental laws.
One such example is the current bushfires in Australia that have reportedly killed up to 10 civilians so far. Tens of thousands of local residents and tourists have been urged to evacuate the areas surrounding the bushfires. Bushfires, over the years, have acted as a major catalyst which, in-turn, has contributed towards the process of global warming. The effects have recently been felt by Australia as the country suffers from scorching temperatures, unusual storms, and a thick layer of smog that has covered the city of Sydney demonstrating that the effects of climate change aren’t isolated to the bush or to rural area but have the potential to change life in capital cities as well.
It’s an irony not lost on many that the carbon-intensive economy of Australia contributes to the global warming that is impacting the country in the form of drought, bush fires and damage to the Great Barrier Reef.
Somalia is another example of a country which suffered due to the effects of climate change. The infamous drought of 2011 caused water in Somalia to become extremely scarce. During that time, the militant group ‘al Shabaab’ illegally occupied different sources of water across the country. This inevitably led to an all-out military battle between the Somalian military forces and members of al Shabaab. The society altogether fell into a complete state of anarchy where thousands and thousands of innocent people were killed.
Global warming is another by-product of Climate Change. It mainly relates to rise of the overall global temperature. This, in itself, poses a major threat in terms of melting ice caps and glaciers. As human activities continue to fuel greenhouse gases onto the atmosphere, the ocean levels continue to absorb the heat. Infecting the natural atmosphere with harmful gases has also led to unpredictable rainfall patterns. These two aspects, when combined together, raises the risk of floods in many countries. The increased risk of flood is a clear sign as to how the destruction of society is becoming inevitable if severe and urgent measures are not taken.
Climate Change for Business and Government
All governments rely on materials extraction and the natural assets of their country. Unfortunately whether it’s coal or minerals or oil, there are always environmental consequences when these materials are taken. With recent occurrences of extreme weather conditions and unpredictable rainfall patterns around the world, it is very likely that governments will be forced to suffer from major revenue losses, thereby giving rise to inflation on a global level. In turn, Inflation could potentially lead to an increase of national crime rates which ultimately impacts the social fabric of the country. In addition to this, there will be added stress on resources that play critical roles in the security and stability of nation states such as water supplies, food, transportation, and energy materials.
Multinational businesses are not spared in this equation either. The success of businesses globally are often tied to the economic stability and security of the nations in which they operate. With governments having to suffer from the effects of Climate Change, businesses may be forced to shut down their operations or alter their operating models. This could, in-turn, create an imbalance between the supply and demand rates. Additionally, the success of business also relies upon consumer incomes. Considering the damages that will be caused through the impacts of Climate Change, consumers will exponentially focus on survival and core expenditure (food, shelter, medial expenses) from the risks associated to extreme conditions and shy away from more subjective expenditure.
Youth to the rescue
Despite the ongoing times of uncertainty, one element of hope lies within the spirit of the younger generation. Recently, the issue of Climate Change has been front and centre in the public discourse thanks to thousands of young environmental activists. The movements and protests carried out by these activists have forced climate change into the public discourse and in turn, people are talking about this unprecedented crisis. Greta Thunberg is a key example of an enthusiastic young individual who is attempting to make a difference. Thunberg’s efforts have been applauded by world leaders all over as she continues on her journey to raise awareness regarding the effects of Climate Change and the importance of maintaining a sustainable environment.
The youth are energised and engaged by this issue. They understand that they’ll need to rectify an issue not of their own making and ultimately, they show no sign of giving up. Promise is showing given the tens of millions of youth who’ve mobilised in protest and activism in the past year alone — more than what previous have done in generations in decades.
Our Take
Ultimately, some of the biggest business disruptions we’ll see in the coming months and years will be due to the environment and climate change. as well as how these risks intersect with geopolitical ones. Instead of focusing on denial or avoidance, we can embrace this as an opportunity and reduce our global dependence on fossil fuels.
For governments, while most international conflicts often appear complex, they’re nearly always aligned or revolving around natural resources. Food security, water scarcity and increases in food and material costs can and do destabilise countries. This is often a pre-cursor crisis to other dangers such as mass migration, civil unrest or terrorism.
The saving grace of climate change is that unlike many other business risks, it can be predicted with almost 100% certainty. The variables we are currently seeing in business and government is people’s willingness and timeliness in response and whether people are taking this threat seriously. 2020 will be the year this is tested.
The obligations to follow environmental standards and are likely legal ones in many jurisdictions but even if not, they’re ethical and moral ones everywhere. Reputational risk is at an all time high and even if you don’t believe environmental issues are ones for you, you could be wrong and if your client base disagrees, you may well lose business.
We’re following the Climate Crisis in all its’ forms at ComplexGlobal to keep abreast of local analysis and what this means for our clients, their countries and their operations. For more insight and analysis on this topic as well as a global understanding of the issues that affect you, explore our wide range of analysis, intelligence and commentary at www.complexglobal.co
