Nine Reasons Why Business Must Care about Climate Change

By Le Pla, Ruth | New Zealand Management, April 2006 | Go to article overview

Nine Reasons Why Business Must Care about Climate Change


Le Pla, Ruth, New Zealand Management


In a joined-up world the plight of the polar bear is everybody s problem. If melting ice caps seem like a million miles away from the daily challenges of manufacturing in Otara or milking in the Manawatu, think again. The case for New Zealand businesses to start heeding climate change issues is hotting up.

The regulatory void created by the Government's controversial pullback late last year from plans to introduce a carbon tax raises the spectre of stranded corporate assets in a directionless and confusing policy vacuum.

Many local businesses are waking up to the notion that climate change matters to them: that it will impact the place that hurts most, the bottom line; and that they, and not solely Government, must take ownership of the issue.

What may be labelled as risk management by some is a glint in the eye for others attuned to specific business possibilities. Arguments for sitting up and taking notice can be roughly divided into four strands: direct impacts on our physical environment; external forces such as regulatory pressures; prodding from other stakeholders such as insurers, investors or customers; and win-win "no regrets" benefits and future opportunities.

We've boiled it all down into nine main reasons why New Zealand businesses must care about climate change. Even those ones that couldn't give a stuff about polar bears.

1 EXTREME EFFECTS

Nothing will make climate change seem more real to the business bottom line than what's about to happen to our agricultural sector. Some see signs that it already is. Andy Reisinger paints a mixed picture for our agricultural future. Warmer temperatures, at least initially, could be a blessing for South Island farmers, who will bask in longer times to grow their crops and reap the associated rewards. The downside is that expected changes in rainfall patterns could lead to a more soggy west coast and more arid eastern parts. The risk of drought in regions like Canterbury, Marlborough and Hawkes Bay is very likely to increase.

Reisinger, who is in the process of shifting from his role with the Ministry for the Environment to take up a position with the Intergovernmental Panel on Climate Change, says such predictions are not new. What is now known is the extent to which such events will ripple throughout the New Zealand economy. Last year, the Ministry for the Environment and the Ministry of Agriculture and Forestry pooled their resources and asked NIWA to dig into what the impact could be.

"Depending on which emission scenario is assumed for the world," says Reisinger, "New Zealand's drought risk could increase by a factor of four in some of those eastern regions. That means that a drought that now only happens every 20 years--at a very rough measure--could occur every five years or even more regularly."

The knock-on effect on our economy could prove hard to handle. It usually takes a drought-stricken region some time to bounce back economically. More frequent dry periods may knock the stuffing out of some less robust areas.

There are a host of other climate change issues. Could hotter weather, for example, mean we are better suited to growing more subtropical, low-value grasses and would they supplant our current high production pasture?

Many climate change issues may not appear to translate directly into core business decisions, Reisinger acknowledges, but they can often affect how business operates. "Once you head into resource constraints, say, as changing rainfall patterns create competition for water between rural users, rural lifestyle blocks and urban users, you create a new dimension of societal issues that need to be discussed."

And whenever such long ranging discussions exist, smart businesses come out on top and the slow ones risk getting caught by the inevitable uncertainty.

2 CARBON COUNTS

We're entering the age of the carbon economy. …

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