Business agenda in the face of runaway climate disasters

Climatic hazards have been mounting worldwide and it is high time for businesses to test their ability to withstand the onslaught and help reverse the dangerous trend. A new article projects that at the rate of the current buildup of carbon emissions in the atmosphere, extreme floods and storms will double in 13 years, and the Philippines will be among the countries most at risk.

The Philippines ranks among the top countries worldwide on measures of people’s exposure to natural hazards as well as their vulnerability to them. Add to that the impact of warmer air and higher precipitation resulting from climate change, and we have the making of “perfect” storms. From Typhoon “Kammuri” and Tropical Storm “Kalmaegi” in the latter part of 2019 to flooding on Mindanao Island and flooding across Davao Region earlier, the Philippines was battered by climate related disasters.

The new study by Ramon Lopez (University of Chile), yours truly and Pablo Troncoso (University of Georgia), titled “Impacts of Carbon Dioxide Emissions on Global Intense Hydrometeorological Disasters”, in Climate, Disaster and Development Journal, warns that an “average” country facing one extreme event a year could see a doubling of that number in 13 years. Compared to that, the Philippines (just like China) faces about nine extreme events (for 2010-16). One more extreme event in the Philippines, for example one more Typhoon “Yolanda” or Typhoon “Ketsana” would strain the country’s ability to cope. A doubling of the numbers in 13 years would be catastrophic.

The crucial task for businesses is to run “stress tests” on their ability to cope as well as to ameliorate the situation. Adequate financing by the government to address disaster risk remains an essential part of preparedness. Planning and budgeting adequately for governance of disaster risk areas is a first order of business, and much more needs to be done. The Philippines placed these instruments within a national financing strategy in 2015, and Indonesia launched a similar one in 2018.

But government efforts need to be bolstered by private sector participation. Disasters are costly, for example, tropical storms in the Philippines have reduced the year’s local economic activity by 23 percent for severe storms. Moreover, less than 10 percent of catastrophic losses in Asia have been insured, placing communities under a huge financial strain. Expansion of insurance will help to pool risk, contain risk and make disaster support more predictable. Businesses need to build in disaster financing in their regular and contingency plans.

Technological improvements are also key. Advances in ground-based networks of radars, but increasingly also on satellite data, can vastly improve the observation of global weather. As satellites provide information for wide geographic areas, including oceans, improvements in forecasting have made warning systems more efficient. The use of telephone-based capabilities for emergency warnings is expanding rapidly, owing in particular to the explosive development in mobile networks. For example, Australia’s Emergency Alert enables states and territories to issue warnings to landline and mobile telephones linked to properties in areas identified as being at risk. It works across all telecommunication carrier networks.

Technology’s potential goes further. Linking sensor networks, large-scale data analysis and communications systems provide businesses with timely information to guide response. Siemens implemented a levee monitoring system in the Netherlands using sensors to monitor water pressure, temperature and shifting weather patterns to identify areas that are at risk of being breached and trigger alarms. IBM in India provides a forecasting system that integrates real-time information on storm conditions, emergency response assets, and areas at risk.

Companies in the Philippines can help make infrastructure more resilient, improving the speed of recovery after disasters strike. Redundant systems for critical infrastructure can reduce the chance of water and power system failures. System intelligence is another form of hardening; embedding sensors and controls into power lines and water treatment plants can allow cities to assess hazardous conditions, take preventative actions and target repair efforts.

Disaster readiness also involves zoning regulations to restrict new development in hazard-prone areas and building codes to protect businesses, homes and neighborhoods. These are an essential part of minimizing the kind of disruption to supply chains and information networks that we have seen with massive floods over the years in Manila, or Chennai, India, and Thailand. With rising sea levels and temperatures, previous norms of the safe distance to live from the coastline must be revised.

When it comes to floods and storms, disaster preparedness will have two big components, both involving governments and businesses. On the one side, there needs to be climate adaptation, such as relocating people from highly exposed coastal regions of the country or building better coastal defenses to withstand extreme hurricanes.

On the other side, there is a strong case for stepping up climate change mitigation by switching from high carbon sources of energy like coal to clean sources like wind, for example from Energy Development Corp. or Pililla Wind Power Project. And since the Philippines’ carbon footprint is relatively modest, it would also pay to engage with the big emitters like China and India to persuade them to decarbonize their economies to everyone’s benefit. —CONTRIBUTED INQ

The author is a visiting professor at the Asian Institute of Management.