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Wednesday, June 25, 2014

Climate risks are business risks

The US economy could face significant, widespread damage from climate disruption unless businesses and policymakers take immediate action to reduce climate risk, according to a new report.

Risky Business: The Economic Risks of Climate Change in the United States explores in detail the sobering "likely impacts" of business as usual and a failure to combat history's largest uncontrolled chemistry experiment - the carbonization of our atmosphere: 
  • Large-scale (hundreds of billions in US$) losses of coastal property and infrastructure
  • Extreme heat across the nation—especially in the Southwest, Southeast, and Upper Midwest—that threatens labor productivity, human health, and energy systems 
  • Shifting agricultural patterns and crop yields, with likely gains for Northern farmers offset by losses in the Midwest and South, with risks for individual farming communities most vulnerable to projected climatic changes.
The report finds that if we stay on the current emissions path, climate risks will multiply and accumulate. It recommends that:
  • Business must change everyday business practices to become more resilient.
  • Investors must incorporate risk assessment into capital expenditures and balance sheets, and the companies they invest in must be required to disclose the climate-related financial risks they face.
  • The public sector must institute policies to mitigate and adapt to climate change. 
Climate risks are business risks.  Will this report - and the leadership of former US Treasury secretaries in preparing it - propel action?

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