Risky Business report shows need to act on climate change

You expect a business leader to keep a close eye on the bottom line and to act when a threat is clear. As C2ES and others have noted, it is increasingly clear to many business leaders that climate change is a here-and-now threat that we all — businesses, government and individuals — must address.

Today’s “Risky Business” report lays out in stark numerical terms the likely economic impact of climate change on U.S. businesses and the U.S. economy. The initiative – co-chaired by former New York City Mayor Michael Bloomberg, former Treasury Secretary Henry Paulson, and former hedge fund manager Tom Steyer – brings high-profile attention to this issue in the hopes that highlighting the risks and potential costs will help spur action to manage the impacts and curb climate-altering emissions.

The report’s outline of the many costs of climate impacts is likely an underestimate. For example, the impacts of diminishing groundwater are difficult to calculate and are not included.

Like the recently released National Climate Assessment, “Risky Business” highlights climate risks and impacts at the regional level. Economy-wide analyses can mask more extreme regional implications. Companies and communities need to know the risks they face in their area, and how those risks will change over time. This report helps answer those questions.

As we outlined a year ago in our report, “Weathering the Storm: Building Business Resilience to Climate Change,” businesses are increasingly recognizing that climate impacts are imposing real costs in the form of damaged facilities, interrupted power and water supplies, higher insurance costs, and disrupted supply and distribution chains. While we found that 90 percent of S&P Global 100 Index companies identify extreme weather and climate change as current or future business risks, we also found they had difficulty assessing and quantifying these risks and determining how to prioritize them. It’s critical to make the risks and the costs clear.

This report comes on the heels of EPA’s proposed new regulation for controlling carbon emissions from existing power plants, the single-largest source. Over the next few months, we are likely to see many analyses that try to assess the cost of complying with these regulations. Risky Business helps frame the rest of the story – the cost of not acting.

Climate change is already contributing to more frequent and intense heat waves, higher sea levels, and more severe droughts, wildfires and downpours. As Risky Business points out, these impacts will likely grow in significance and cost.

A prudent approach is two-pronged: building resilience to the impacts we cannot avoid while taking action to limit future impacts by curbing greenhouse gases. Focusing on both resilience and mitigation is essential because lower emissions give our efforts to build resilience a better chance of success.

Waiting to act is the most expensive choice we can make.