With this week’s release of the latest IPCC report, over 300 scientists, citing 12,000 scholarly reports, determined that no one on the planet will be untouched by the damaging effects of global warming in coming decades. In fact, climate change impacts and risks are already becoming apparent as the report catalogues the present and future risks to life and livelihood from climate change.
“Read this report and you can’t deny the reality: Unless we act dramatically and quickly, science tells us our climate and our way of life are literally in jeopardy,” U.S. Secretary of State John Kerry said in a statement. “Let’s make our political system wake up and let’s make the world respond.”
Many in the public and media take the view that climate change impacts will come sometime in the future. But the latest warnings from the IPCC and a prescient book by journalist McKenzie Funk shows otherwise. Windfall: The Booming Business of Global Warming, looks at both new economic opportunities climate change is opening up right now in some places and also where the climate impacts are slowly making life miserable, and eventually impossible in other places. Funk’s story takes a deeper dive into how corporations, entrepreneurs, and even some nations stand to benefit from a changing climate.
Funk spent over six years traveling the globe discovering how people are reacting to both the potential impacts of climate change and the impacts already being felt. While he hadn’t considered, or even written about climate in the past, Funk discovered that the reaction to climate change from people all around the world very intriguing.
“I thought it was maybe not a very interesting topic to cover as a journalist, because it’s a lot about carbon and taxes and weird political machinations at various levels, either at the U.S. or even the U.N.,” Funk says in a recent interview. “It (Windfall) covers the whole world, what’s happening with climate change, and lots of people are reacting in lots of different ways to it.”
The effects of a shifting climate can be divided into melt, drought, and deluge (rising sea levels), according to Funk. In fact, the book is organized into these three sections. Each effect may lead to big economic benefits for different industries and entrepreneurs. Funk visits a company in Israel using by-products of massive desalination plants to capitalize on ski resorts suffering from a lack of snow. In California, he takes a trip with private firefighters working for insurance companies to protect insured homes (and only insured homes) from an encroaching blaze. He meets with a hedge fund manager who is one of many who has bet on drought conditions by buying up valuable water rights in the western US.
A trip to Africa puts Funk in contact with an opportunistic investor who deals with local warlords in order to rapidly purchase land with the expectation that as the effects of climate change take hold, they will become valuable pieces of land for farming. Meanwhile, locals in western Africa attempt to build a “Great Green Wall,” a fort-seven hundred, ten mile wide barrier of trees intended to keep the encroaching Sahara Desert at bay. He meets with Dutch architects designing floating cities, and geo-engineers looking to capitalize on a last-ditch effort to cool the planet.
Funk begins his travels at a 2008 Deutsche Bank sponsored road show in New York City called “The Investment Climate Is Changing,” designed to show that bank was now in the business of climate change investing. When many observers hear that a financial institution is investing in climate change, they think of investments in renewable energy technologies and energy efficiency to lower the world’s emissions of greenhouse gases. Deutsche was investing in the mitigation technologies, but, in its “Climate Change Fund,” Deutsche also favored companies that were making a more cynical calculation: Rather than fight climate change, these companies were poised to profit from climate change. According to Funk, such investments will make money on the premise that “the warmer the world, the less habitable it became, the bigger the windfall.”
“Corporations aren’t interested in fighting over whether it’s real or not, they’re just going on the side of the scientists who say it is. [They’re] just looking to make money,” Funk writes. “On Wall Street, you don’t get a lot of climate denial.”
Funk travels on a Canadian expedition to the Arctic, where the issue of the Northwest Passage is causing international tensions to rise, as countries argue over whose territory covers the now ice-free area in the Arctic that is growing larger and for a longer amount of time every summer due to climate change. The region—which encompasses 17 percent of the globe and is almost one and a half times the size of the United States—is warming two times faster than any other region on Earth. Arctic sea ice has shrunk by 75 percent since the 1980s with ice-free summers in its ocean “very likely” by midcentury. Governments looking for cheaper shipping routes and oil companies eager to drill in the iceless ocean are certainly not wasting time.
Funk also meets with experts at Royal Dutch Shell regarding their climate change scenarios, and resulting investments into technologies and resources made by the company. The first scenario, known as “Blueprint,” envisions a future where carbon pricing generates the massive development of clean energy technologies and widespread adoption of carbon capture and storage. Its second scenario, “Scramble,” imagines countries will continue to burn fossil fuels, and begin to fight each other to access energy and water supplies. Like most observers of the political process, in the US and abroad, Shell has come to believe that the future is more likely to resemble “Scramble” than “Blueprint,” and the company is investing accordingly.
During a trip to Greenland, Funk sees a sparse population discovering that due to melting ice, vast amounts of natural resources are now recoverable for eager companies and entrepreneurs. This is spurring an independence movement in a country that has been under the Kingdom of Denmark for decades. The melting ice in the Arctic and in Greenland is creating huge business opportunities, but the negative effects will be felt the world over.
Lonely iceberg in Greenland via Shutterstock
Scientists and policymakers agree that one of the most worrisome impacts of climate change may be the melting of much of the earth’s ice, which is likely to raise sea levels and flood coastal regions. Such a rise will be uneven because of gravitational effects and human intervention, so predicting its outcome in any one place is difficult. A seawall has been built in the Netherlands to prevent further flooding, and one may very well be built to protect New York City from another Sandy-type disaster. Other, poorer areas will not have the luxury of such technology. Island nations like the Maldives, Kiribati, and Fiji may lose much of their land area, and millions of Bangladeshis will be displaced by rising coastline and cities that are actually sinking due to over-pumping of groundwater. Funk visits the poor nation of Bangladesh, as well as neighboring India where local ‘minuteman’ are building a fence to keep out the constant deluge of immigrants escaping poverty and unlivable conditions.
“There are a lot of places in the world at risk from rising sea levels, but Bangladesh is at the top of everybody’s list,” said Rafael Reuveny, a professor in the School of Public and Environmental Affairs at Indiana University at Bloomington. “And the world is not ready to cope with the problems.”
Both Windfall and the IPCC’s recent report should be a wake-up call for both policymakers and the general public. Not only can strong evidence of climate change be found in natural systems such as melting ice sheets and damaged coral reefs, but impacts are growing more evident in human systems as well. Climate change is already beginning to affect crop yields, and the IPCC report says that yields could decline sharply towards the middle of the century. Climate change is driving recent heat waves and droughts, and was a risk factor for wildfires. It catalogued some of the disasters throughout the world since 2000: including heat waves in Europe, wildfires in Australia and the US, and deadly floods in Pakistan.
Drought via Shutterstock
“We are now in an era where climate change isn’t some kind of future hypothetical,” said the leading author of the report, Chris Field of Stanford University. “We live in an area where impacts from climate change are already widespread and consequential.”
Windfall, supplemental to the IPCC report, is an eye-opening journey throughout the world, where the economic and social costs of climate change are already being felt. Adapting to these changes will present opportunities for those that can afford the investment, but as Funk describes, millions (perhaps billions) of people will face the negative impacts of a changing planet.
About the Author: James Lester is an energy and impact investing expert with over a decade of experience in energy finance, public policy, and measuring social and environmental impacts (SEI). He has authored a number of articles, publications, and research reports that provide sources and tools needed to promote investment in clean energy. He is Managing Consultant at Cleantech Finance and lives in Boulder, CO. Follow James on Twitter @cleantecfinance and @Impact_Invest0r.