Living and doing business with climate change – Manila Bulletin
An abstract concept is what most of us think of climate change, interesting only to scientists and divorced from the daily concerns of people making a living, companies looking at bottom lines, government officials planning for the next election. A webinar recently organized by the Institute of Corporate Directors for GT Capital Holdings made it clear that climate change affects companies, countries, all of us, and our children.
It has been constantly getting hotter. With rising temperatures, the icecaps of Greenland and Antarctica have been melting, as have the glaciers of the Himalayas, the Alps, and everywhere else. Melt water reach the seas causing ocean levels to rise. Rising temperatures also warm the seas, making typhoons and cyclones stronger and more frequent and taking different paths. They also cause coral reefs, nursery of larger fish, to die. On land, higher temperatures mean less rain, wildfires, drought, and expanding deserts.
In the Philippines, typhoons have been getting stronger and are passing southern Philippines more often. Parts of Metro Manila are doubly affected. Ground water is pumped up either secretly or with official blessings to supplement what Angat Dam and Laguna de Bay supply, causing land to sink. With rising sea levels and land subsidence, Malabon and Navotas suffer constant flooding and some busy streets become impassable with every heavy rain. These are not aberrations that will cease, but are effects of global warming that can only get worse.
Typhoons cause immediate loss of life, crops, private property, infrastructure. Repair and rehabilitation as well as measures taken to reduce the impact of future typhoons eat into resources otherwise available for more productive uses. In constantly flooded areas, flood control measures are taken, streets are raised, homeowners rebuild their homes or move elsewhere, all at a cost. With more and stronger typhoons in coming years, both damage and repair cost will necessarily rise too. The worst case scenario could be the abandonment of the area and the transfer of entire communities to higher locations.
Not only populated areas but also agricultural lands will be affected as global warming continues, affecting food supply. Because Thailand, Vietnam and our suppliers of rice, sugar, etc. are also affected by climate change, we could have full-blown food crises.
The principal causes of global warming are: (a) carbon emissions caused mainly by burning fossil fuel, namely oil and coal, and (b) loss of forests, mangroves, and other organisms that absorb the damaging emissions, known as “sinks.” Slowing global warming depends on how speedily emissions are reduced and absorbed.
The risks of global warming and its potentially grave impact on the Philippines had been recognized. Congress passed R.A. No. 9728 (Climate Change Act of 2009) creating a Climate Change Commission headed by the President and an advisory council of 23 members, including department secretaries and representatives from local government units, private business, academe, and other key sectors. The Commission was mandated to formulate a National Climate Change Action Plan and given the powers to see to its implementation. A recent press release reports on a commission meeting with transport groups to get their cooperation.
Under the auspices of the United Nations, the Paris Agreement (or Paris Climate Accords) was adopted in 2016 under which governments agree to take measures that will keep global temperature below 2.0 degrees Celsius or preferably below 1.5 degrees Celsius beyond its pre-industrial level and to cut carbon emissions by 50 percent by 2030. The Philippines signed the agreement in 2016 and ratified it the following year. The Philippine commitment is to reduce emissions by 70 percent by 2030.
The expert speakers at the ICD-GT Capital Holdings Webinar touched upon business and climate change. Climate change is upon us for sure. Its severity and timing depend upon the success of measures taken all over the world to reduce carbon emissions, increase carbon sinks, mitigate the impact of climate change on the population, and to finance the measures needed to achieve the above.
Obvious measures for reducing emissions, include reduction of oil usage for transportation, power generation, and household needs; shift to alternative energy sources (solar, wind, hydroelectric, geothermal). Increasing carbon sinks call for reforestation, preservation and expansion of mangrove areas. Measures to mitigate the impact of climate change on people include changes in zoning, building and land reclamation laws, and regulations, flood control, relocation. It’s a no-brainer that money should not be spent by government, companies, or individuals on projects likely to be affected by rising sea levels, land subsidence, water and power shortages, typhoons, and projects that use oil, coal, and other emission-causing processes.
Long-term planning is needed one can only hope that national and local leadership think beyond the six and three years of their terms of office. Expenses for reforestation are immediate while the results are in the far future. Deforestation benefits are immediate. Deep wells yield immediate water; dams take longer.
The ICD-GT Capital webinar concluded with the message that business opportunities exist in the direst of conditions. Companies make daily decisions on products, target customers and suppliers, production processes, location and relocation, raw material sources. Bank decisions on loan applications result in eventual income or loss writeoffs. Companies that recognize and act upon opportunities possible and avoid the risks inherent in climate change will succeed; those who proceed as if nothing will be different may regret their complacency.
Notes: (a) Expert speakers presented by the Institute of Corporate Directors were Carlo Jose Gatmaitan of the Ateneo Graduate School of Business, John Pulhin of U.P. Los Banos, Kelvin Lee of the Securities and Exchange Commission, Olivier Trecco of S&P Global Sustainable, and Colin Hubo of the University of Asia and the Pacific; and (b) Arthur Ty chairs GT Capital Holdings and its sister companies, including Metrobank and AXA Life and Charter Ping An Insurance Companies.
Comments are cordially invited, addressed to [email protected].
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