DuPont, Zurich Chase $135 Billion Climate Market as Warming Forces Change - Bloomberg

DuPont Co.'s drought-tolerant corn is one of the seeds that's designed to thrive where water is scarce. Photographer: Larry W. Smith/Bloomberg

A cow stands in a dried-up pond in Isabela province in the Philippines. Richer countries are negotiating a fund to help poorer nations cope with the changing climate conditions predicted by climate scientists. Photographer: Nana Buxani/Bloomberg

Seed maker DuPont Co., wind-turbine manufacturer General Electric Co. and insurer Zurich Financial Services AG are devising products to help the world adapt to climate change, a potential $135 billion-a-year market by 2030.

The companies are driven in part by the failure of international efforts to cut the greenhouse gases that scientists say contribute to global warming. Discussions last year in Copenhagen yielded little progress, and officials leading more than 190 countries in talks that begin today in Cancun, Mexico, say they don’t expect to achieve a binding agreement on measures to slow the growth of emissions.

Damages from climate-related disasters are mounting. Insured losses from storms and floods have risen more than fivefold to $27 billion annually in the past four decades, Swiss Reinsurance Co. said in a September report. By 2030, the world may need to spend $135 billion a year on flood protection, buildings that can withstand hurricanes and drought-resistant crops, Swiss Re said, citing United Nations data.

“Climate change presents a direct threat to our business,” Jim Hanna, director of environmental impact for Seattle-based Starbucks Corp., the world’s largest coffee chain, said in an interview. “We are already hearing some anecdotal evidence that shifting weather patterns and increased erosion and pest infestation are starting to impact coffee crops.”

Adaptation strategies, such as rewarding farmers for taking extra steps to prevent erosion on vulnerable land, will help Starbucks prepare, Hanna said.

Richer, Poorer Nations

Relatively rich nations such as the U.S. are devoting more attention and resources to adaptation and are negotiating a fund to help poorer countries cope with the higher sea levels, droughts, heat waves, more severe storms and erratic weather predicted by climate scientists.

“Sooner or later all businesses will have to climate-proof their operations,” Christiana Figueres, the UN’s climate chief, said in a September speech in New York. “Adaptation will be imperative if businesses want to avoid climate-change impacts that could drive them out of business.”

Crops better able to resist drought can help DuPont expand its $8.2 billion agriculture business, according to Jim Borel, vice president in charge of seed operations for the Wilmington, Delaware-based company, the world’s second-biggest seed maker behind Monsanto Co.

Farmers’ Productivity

“Real business opportunity comes from using science to help improve productivity for farmers, and they will have to do that to deal with climate change over the next few decades,” Borel said in an interview.

Zurich is offering policies letting businesses and homeowners replace storm-damaged property with structures better able to withstand extreme weather, said Lindene Patton, chief climate-protection officer for the Zurich-based insurer.

“There is more social demand on our customers and other stakeholders in the sense that when governments are not acting, people fill gaps with whatever tools are available,” Patton said.

The Cancun climate talks through Dec. 10, led by Figueres, will seek incremental steps after last year’s failure at meetings in Copenhagen to agree on a new binding international accord to cut heat-trapping greenhouse-gas pollution.

Even if nations were to implement ambitious emissions cuts now, some climate-change effects are unavoidable because of carbon dioxide already in the atmosphere, the Arlington, Virginia-based Pew Center on Global Climate Change said in an August report.

Effects Locked In

“There are climate impacts locked into the system because of the inertia of the atmosphere,” said Andrew Voysey, secretary of ClimateWise, an association of insurers based at the University of Cambridge in the U.K. that works to reduce the damage from climate change. “The increased focus on adaptation is certainly welcome, but we have to be quite conscious of the limits of what we can adapt out of.”

Lack of progress toward global cuts in carbon emissions means higher adaptation costs in the future, said Joel Smith, a principal at Boulder, Colorado-based Stratus Consulting Inc. and a lead author on U.N climate-change reports.

“The less we do to mitigate the more we’re going to have to deal with the consequences,” Smith said in an interview.

Nations have been slow to live up to commitments to help developing nations, said Frances Beinecke, president of the Natural Resources Defense Council, a New York-based environmental group.

“We have put some money on the table,” Beinecke said in an interview. “Not nearly enough. There’s going to be more and more conversations about adaption and the need to take it seriously.”

‘People Are Hurting’

Making the argument to spend millions of dollars today to deal with effects that may not be seen for decades is difficult, said Ruben Kraiem, a partner with the law firm Covington & Burling LLP in New York and an adviser to the Coalition for Rainforest Nations, a New York-based group that works to preserve tropical forests.

“When people are hurting as many people are, it’s extremely difficult to make that case,” Kraiem said. “How much does it make sense to pay for a more robust piece of infrastructure today to protect against potential damage in 30 or 40 years?”

President Barack Obama failed to win passage in Congress this year of legislation to cap carbon emissions linked to global warming. Prospects for action will grow slimmer next year when Republicans take control of the House of Representatives and expand their minority in the Senate. Dozens of Republican lawmakers elected this month have expressed skepticism about global warming or action to curb it.

‘Inevitable Effects’

Obama’s task force on climate-change adaptation is urging government agencies to prepare for the “inevitable effects” of global warming.

“We’re not looking at climate-change impacts that are far in the future,” Shere Abbott, associate director of environment for the White House Office of Science and Technology Policy, said in an interview. “We’re already seeing impacts today.”

The U.S. Gulf Coast alone may face $350 billion in damages by 2030 as powerful storms fueled by climate change ravage the region, according to a study released last month that was commissioned by Entergy Corp. of New Orleans, an energy company that operates nuclear-power plants.

Texas Instruments, Siemens

Texas Instruments Inc., the second-largest U.S. chipmaker behind Intel Corp., and Siemens AG, Europe’s largest engineering company, are among companies that say increased demand for energy-efficient appliances and other business opportunities may counter risks to business from climate change such as higher energy costs, according to a report released last month by the Carbon Disclosure Project, which is backed by 534 institutional investors with more than $64 trillion in assets under management.

GE of Fairfield, Connecticut, which has pushed for mandatory carbon limits in the U.S. and worldwide, is working on a project with Goldman Sachs Group Inc. to map water-related risks for investors. GE, the world’s second-biggest wind-turbine maker behind Vestas Wind Systems A/S, also views the database as a tool to help the company identify areas worldwide where a shifting climate is causing water scarcity, said Jeff Fulgham, sustainability chief for GE Water.

“We want to make sure we are on the ground in those high- stress areas,” Fulgham said in an interview. Revenue from GE’s business recycling water for use in power plants, agriculture and manufacturing is expected to grow at least 10 percent a year through at least 2016, he said.

Levi Strauss Cotton

While some businesses seek profit in adapting to climate change, others are preparing for the liabilities.

Levi Strauss & Co. says it’s worried higher temperatures and sea levels worldwide will cause diminishing supplies and soaring costs for the cotton used in its jeans.

The apparel-maker is mapping out its operations and supply chain to see where water scarcity may cause damage now and later, said Anna Walker, the San Francisco-based company’s senior manager of government affairs and public policy.

Negotiators pledged in Copenhagen to keep the global temperature rise since industrialization to 2 degrees Celsius (3.6 degrees Fahrenheit), part of a political pact nations settled upon after failing to reach a deal on curbing emissions. Average surface temperatures have risen by about 0.74 degrees Celsius during the 20th century, according to the UN.

Munich Re, the biggest reinsurer, and Swiss Re, the second- largest, back the 2-degree cap and say exceeding it would result in an explosion of risk.

“Adaptation needs more attention,” said Andrew Steer, the World Bank’s climate-change chief who became the first to hold the post in July. “I’m not saying adaptation is better than mitigation. It’s not. But unfortunately it’s unlikely we will be able to prevent temperatures from rising less than 2 degrees.”

To contact the reporters on this story: Kim Chipman in Washington at kchipman@bloomberg.net; Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at LLiebert@bloomberg.net.

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Dot Earth: Scientists Join Forces in a Hostile Climate - New York Times

They’re not going to take it.

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In the face of probes by a state attorney general, hints of hostile congressional hearings and assaults from critics in the blogosphere, hundreds of members of the American Geophysical Union are forming a rapid-response team aiming to challenge disinformation and misinformation deployed in the policy wars over global warming. The news was first reported by Neela Banerjee of the Los Angeles Times (a former colleague).

I sent a query about the plan to some of the scientists involved in the effort. The first response is from Michael Oppenheimer, a professor of earth science and international affairs at Princeton University and former chief scientist for the Environmental Defense Fund. Oppenheimer stressed that the “rapid response” effort will be focused on science, not on policy options (a wise delineation):

What’s true is that A.G.U. asked members who among them would volunteer for various outreach activities. This would be about science, of course. Whether it’s 700, I do not know. I only know that I volunteered, and by the way, am on the outreach committee for A.G.U. right now.

There’s plenty of worry about Issa, Barton, Inhofe, et al, but it may be that with the legislation dead for now, these fellows will turn their efforts elsewhere. But it doesn’t hurt to be ready and, in any event, the scientific ideas need to be explained and defended.

In my view, lots of people, particularly the philanthropic community, erred seriously in deciding that the scientific case was firm enough in the public’s and leaders’ minds so that they didn’t need to worry about it. The fact is the science is organic, and so is its opposition. It’s always a weak underbelly because the average person or political leader or business leader doesn’t have a firm grasp on it (in the case of the first category, why should they?) and the science is always evolving, so it’s always easy to generate confusion (see Merchants of Doubt). It will happen again. So what’s needed now is a serious effort to understand how expert information is taken up by the public (and key opinion leaders) and how to best inform them. The professional societies, the National Academies, the [nonprofit groups], the philanthropy community, and individual natural and social scientists all need to do more. Regardless of the particulars of the ultimate policy response, clearer, more reliable, trusted sources of organized information is needed.

I’m on the board of Climate Central, one such effort. We need many in different niches.

In recent weeks I’d been in touch with two of the organizers, John Abraham of St. Thomas University, and Scott Mandia of Stonybrook University, as they pondered various responses to the rightward shift in politics and the intensifying challenges to the vast body of science pointing to a human-heated planet.

Both have already jumped to the public debate, so they know what they’re facing.

Abraham is perhaps best known for posting a long rebuttal to the arguments of Christopher Monckton, a flamboyant critic of climate alarm whose pedigree, style and assertions would make him a great character for a climate-focused variant of the film “Thank You for Smoking.”

Here’s Mandia’s explanation for his activism:

The science of climate change and even the scientists themselves are under attack from a well-orchestrated and well-oiled misinformation campaign.  The best defense against this anti-science offensive is to make sure that the correct message reaches a wide audience.  Chris Mooney & Sheril Kirshenbaum in their book Unscientific America: How Scientific Illiteracy Threatens our Future explain that scientists have failed to get their message across for a variety of reasons but mostly because we are not engaging the public on their turf.  After reading that book, I became a climate change evangelist with my Global Warming: Man or Myth? Website, this blog, and more recently a Facebook Fan Group called Global Warming Fact of the Day.  I have two small children and I do not like the future that I see for them or for their children in a human-driven warmer world. [Read the rest.]

In an appearance last week at Purdue University I was on a panel with Roger Pielke, Jr., of the University of Colorado and Judith Curry of the Georgia Institute of Technology exploring the heated state of the debate over climate science and policy. Three questions were posed, one being: “Moving forward, is there a better role for climate scientists in political and policy debates, and if so, what would it look like?”

My answer was that it’s important first to specify the question at hand. There’s a big difference, for instance, between, “Are humans warming the world?” and “How fast should emissions of greenhouse gases be cut?” One is science, the other (because of the word “should”) is policy.

Scientists are wise to explain and defend their science, and if this effort by the geophysical union focuses on that, so much the better. The group has made other moves in this direction, including the creation of a blog network, the AGU Blogosphere.

They can feel free to get into the policy debate, as well, but there it’s vital (to my mind as a 25-year observer of fights over climate policy) to distinguish when one’s wearing the scientist hat and the citizen hat (as parent, homeowner, taxpayer).

This came up when I taught a graduate seminar at Bard College on communication and environmental policy in 2007, the year the Intergovernmental Panel on Climate Change rolled out its fourth report.

I divided the class into two groups. One had to defend the presentation style of Susan Solomon, the co-leader of the climate panel’s science report team. Solomon rebuffed reporters trying to get her to interpret the findings and said her job was to lay out the science, not discuss how to respond. The other group defended James Hansen, the NASA climatologist who has become a passionate advocate for a quick end to coal combustion.

When not playing their roles, the students nearly unanimously supported Hansen, but after the debate, in which the pitfalls of both advocacy and silence were revealed, they ended up split and somewhat confused.

They should have been. As I said at Purdue, there’s no simple answer for a scientist — particularly a young one — when his or her work becomes deeply consequential.

Richard Somerville, a climate scientist at the University of California, San Diego, provided his explanation for his advocacy here. Jim Hansen did so recently, as well. But they’re both near the end of long successful careers.

If a scientist wants to join the policy fray and retain credibility, a vital step is to distinguish between assertions supported by data and those framed by personal values.

Nobody explained this better than Stephen H. Schneider of Stanford University, who passed away this year after decades of work on climate science, communication and policy.

In a 2006 e-mail message, part of a trove I call my personal “Schneidergate” files, this is how Schneider made the point:

To be risk averse is good policy in my VALUE SYSTEM — and we always must admit that how to take risks — with climate damages or costs of mitigation/adaptation — is not science but world views and risk aversion philosophy.

There’ll be more from my Schneider files on uncertainty and climate down the line.

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