As 2015 wound to a close, it was assigned to the record books as the world’s warmest year. Of course, global warming is widely considered to be at play, but meteorologists are particularly interested in the strength of this year’s El Niño, which has exacerbated droughts in some areas, increased floods in others, and led to an unusually mild winter in North America and Europe. The effects of this unusually warm winter on the world economy are representative of the diverse financial consequences of El Niño and of climate variability generally, with weather being blamed for increased production costs, reduced revenues, and reduced GDPs. The question for each of these companies is whether they were prepared for El Niño and integrated weather risk management into their development strategies.
Exploring the El Niño phenomenon
El Niño is well known as a cyclical phenomenon that occurs about once or twice per decade that sees the warm waters of the central Pacific expand eastwards towards North and South America. During the summer period, it increases the risk of decreased rainfall in the Eastern Pacific (India, Indonesia and in the northern part of Australia), and conversely, it rains more in the southern United States and on the west coast of South America. In winter, when El Niño peaks, temperatures are abnormally high in North America and Europe, and there is more intense storm activity in the Gulf of Mexico. It is also accompanied by intense rains. El Niño leads to a significant increase in the number, duration and intensity of weather anomalies around the world.
DOI: 10.15200/winn.145225.55676 provided by The Winnower, a DIY scholarly publishing platform
Where government have failed and the private sector remains oblivious, new voices propose innovative solutions ahead of Cop21
Is your company prepared for the consequences of climate change in 2100? Even in 2050? Of course not. Annual reports and five-year planning cycles do not contemplate such timelines, any more than the profit-rewarding bonus system of the c-suite does. However, the private sector continues to be inundated with reports and studies providing projections for events that may affect enterprises in this distant future, themselves based on current projections of macro-trends. These terrifying but irrelevant (and unreliable) statistics are of little use to the current planning cycles of the average business, yet the public sector is providing them in the hopes that the private sector will be motivated to step in and take the lead in responding to climate change, making the practical and timely changes that cumbersome and intractable bureaucracies have not been able to do. We now have the tragedy of the commons meets the tragedy of the timelines.
However, where governments and international bodies have missed the mark, and the private sector remains struggling to understand its role, a dark horse has emerged in the climate change crisis. Weather risk management specialists reveal the relevant data, the financial consequences and the risk management solutions that could finally successfully join the public and private sector together in the fight against climate change and make an international agreement within our grasp. The only question now is, is it too late for Cop21?
DOI: 10.15200/winn.144361.10683 provided by The Winnower, a DIY scholarly publishing platform