Editorial

Article Type: Editorial From: International Journal of Climate Change Strategies and Management, Volume 5, Issue 4

Welcome to another issue of IJCCSM, which contains a very interesting set of papers tackling matters related to climate change management. On this editorial, I would like to comment on the report “Climate Change, Energy & Businesses to 2040”. This report presents the results of a quantitative approach to assess financial impacts of climate change and rising energy cost on different business sectors under three different policy scenarios:

1. BAU (“business as usual”).

2. Marshall: a scenario assuming concentrate government efforts to transform the energy infrastructure.

3. TINA (“there is no alternative”), a scenario that assumes government action is directed by pure free market thinking based on economic theories, as currently applied with the financial crisis in Europe. Climate change is leading to increased frequency of extreme weather events.

Some highlights of the findings include: the combined cost of physical impacts of climate change, business disruption, and rising energy prices complete changes the cost structure of certain industries. For some sectors, additional cost in 2040 amount to nearly 100 percent of current cost. On the other hand, new opportunities arising from climate change and scarcity of fossil resources is still grossly underestimated. The report also shows that a business-as-usual approach (the BAU scenario) to energy-climate change challenges will be far more expensive than a Marshall approach.

The report is based on the analysis on currently available facts and forecasts:

* The scarcity of fossil energy sources and the decline of easily accessible and exploitable oil fields implies the end of a century of cheap oil. The lack of investment, increasing demand from emerging economies, and commodity speculation suggests that cost of fossil energy resources will further increase in the near future.

* There is no reason – neither technical nor financial – why the world economy should not be powered by renewable energy technologies and sources by 2040. However, a comprehensive energy infrastructure transformation would require political consensus within, and in between countries.

* The complete absence of vision and leadership amongst politicians around the globe means that there will be no national or international framework to adequately tackle energy infrastructure transformation and climate change.

In other words: businesses will need to develop their own strategy to deal with the increasing impacts of climate change (mainly the increase of frequency and ferocity of extreme weather events) and rising energy costs. The full report can be seen at: http://www.solability.com/pdfs/Climate%20Energy%20and%20Business.pdf

Enjoy your reading!

Walter Leal Filho