Businesses urged to prepare for catastrophic climate impacts

A major report on business and climate change impacts has warned companies to begin thinking through how to protect their operations in a much warmer planet, because the chances of restricting the global rise in temperatures to within 2°C degree recedes.

In its 2012 Low Carbon Economy Index, the world’s largest professional services consultancy PwC makes a series of recommendations that include advice to sectors dependent on food, water, energy or ecosystem services to check their supply chain reliability. It also warned companies in the more carbon-intensive sectors to expect more stringent regulation and, possibly, stranded assets.

PwC publicised these findings while warning the world that it has failed disastrously to cut carbon emissions to restrict temperature rises.

It says last year’s improvement was 0.7% and that the annual decarbonisation rate has averaged only 0.8% since 2000. The consultancy says the CO2 reduction needed to hit a 2°C warming target is now 5.1% every year until 2050.

The report calculates that the planet must improve its decarbonisation sixfold to have just a 50% chance of avoiding a 2°C temperature rise. But the company says it regards even the 2°C target as a conservative measure in the fight to minimise climate change. PwC partner Leo Johnson said: “Businesses, governments and communities ... need to plan for a warming world – not just 2°C, but 4°C or even 6°C.”

PwC sustainability and climate change director Jonathan Grant says he is advising consumer goods clients to review the longer-term security and sourcing of their supplies and to determine policies for potential supply disruption by extreme weather.

More fundamental steps recommended include rapid renewable energy uptake, the slashing of fossil fuel use or huge deployment of carbon capture and storage, as well as reduced industrial emissions and an end to deforestation.

And the consultancy warns against reliance on gas, claiming that while the US shale gas boom has helped restrict emissions, the resulting low gas prices may blunt incentives for lower-carbon nuclear power and renewable energy.

Meanwhile, quoting from the book Six Degrees: Our future on a hotter planet, by Mark Lynas, the report predicts excessive heat and drought will make much of southern Europe, north Africa and the Middle East uninhabitable if warming increases by 4°C or 5°C.

If warming reaches 6°C, average global temperatures will be the highest for 50 million years and swollen seas will engulf many coastal cities. At 6°C-plus warming, 90% of species could disappear.

Another report, from the US National Centre for Atmospheric Research, highlights the recent unstable climate – the superstorm Sandy that devastated swathes of the US, drought in the US grain-growing areas, the Indian monsoon, and one of the worst UK droughts on record, followed by the wettest spring recorded, damaging crops and raising food prices.

The centre then observes that global warming this year shrank Arctic ice to its lowest measured volume and that the surface ice melting was more widespread across Greenland than ever before. It says experts have predicted the Arctic seas could be ice-free in winter within ten years.  

PwC’s decarbonisation league is headed by the UK, Germany and France, which reduced carbon intensity by more than 6% in 2010-11. Australia, whose carbon intensity grew by 6.7% last year, takes bottom place. In China and India, the past decade’s carbon intensity improvement appears to have stalled, but Indonesia’s reduction was 5.2% last year despite strong economic growth.