All posts tagged UK

Farmers in Crisis

tractor

It is a perilous time to be a farmer. Across the world, 2015 broke records for unseasonal, unprecedented, and unexpected weather. The combination of El Niño and climate change produced conditions with devastating effects for the agriculture sector around the globe. This article examines the impacts of unseasonal weather on farmers around the world, in losses to yield quality and quantity but also in economic, physical and psychological effects for farmers coping with the “new normal” in weather. It considers regional differences in farmers’ susceptibility to unseasonal weather, and presents the implications of the lack of resiliency of the major crop producers for the future of food security, and by extension, political stability. Finally, it looks at how the international community is addressing this situation, concluding with practical and achievable means for farmers and cooperatives to start to build resiliency to climate change today.

Farmers around the world experience significant losses from extreme weather

It is the prize that the world did not want to see given. Nonetheless, 2015 proved to have no limit to its unseasonal and unprecedented weather. Based largely on a combination of a strong El Nino and human-induced global warming, global average surface temperatures exceeded all previous on record to reach the symbolic and significant milestone of 1°C above the pre-industrial era.

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Storm in a teacup

flood UK dec. 2015

It’s being called the “great flood of 2015”, as Britain has been pummelled by seven storms this winter, including Abigail, Barney, Clodagh, Desmond, Eva and Frank. Further, emergency services and volunteers have been working around the clock to deal with the immense damage caused by the opening of a barrier on the River Foss on Boxing Day for a four-day period, flooding a large swath of York, in a controversial attempt to stop the flood spread caused by the downpour. In total, more than 180 flood warning and flood alerts are now in place across the UK and 27 “danger to live” warnings are in effect across central and norther England and Wales.[1]www.mirror.co.uk/news/uk-news/uk-weather-nasa-satellite-image-7085048

Along with the floodgates, many questions have been raised as a result of the catastrophic financial consequences of the storms of this winter regarding the state of preparedness of the UK’s public and private sector in responding to climate change today. They concern not just how the flood defences are inadequate to handle the “new normal” of more severe and frequent extreme weather events facing the UK, but how risk management solutions such as flood insurance are failing the public as the full extent of the total uninsurable losses, and the slowness in getting EU and national grants and insurance payments to those in imminent need, is revealed. They both point to the need to explore what financial solutions are available to enable the UK to mitigate climate risk and buy time in the short term while investing in the environmental solutions that scientists have already identified as necessary to reduce climate change in the long-term (eg. replacing the use of fossil fuels with renewables and restocking carbon sinks).

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Ranking UK retail sectors

london1

A new white paper has been released today by Meteo Protect demonstrating the importance of unseasonal weather on the sales performance of UK retailers, and the growing need to actively manage its financial consequences. The extent to which retail companies are exposed to climate variability is likely to be an eye-opener for many banks, regulators, analysts and investors. As climate variability is increasing, the risk to which they are exposed requires urgent action.

The research report thoroughly investigates the relationship between monthly sales and climate variability. For the first time, for each season, retail sectors are ranked according to their sensitivity to temperature, precipitation, humidity rate and wind speed.
The authors provide retail managers with a methodology to calculate the contribution of weather to sales performance and to evaluate sales at risk caused by climate variability. They also provide analysts with rankings that classify retail sectors according to their sensitivity to climate variability.

To mitigate the exposure to climate risks, the idea that geographical diversification is a natural efficient hedge is wrong, and the scientific evidence exposed in this report is unequivocal. Climate variability is a risk that needs to be managed like any other financial risk. One way to become more resilient to climate risks is to use weather-index products that are designed to pay in case of unfavorable weather. If companies are resilient to climate variability on an on-going basis, they will, by definition, become resilient to climate change.

The contribution of this research paper is of course not limited to the UK as the methodology is reproducible to other countries and sectors. A must-read for finance executives and business managers ahead of COP21.

Download the White Paper