United States: Adapting Your Business To A Changing Environment

Extreme weather affects our planet, our people and our business. Climate Change partner Jeff Fort examines how adapting to this "new normal" will create challenges and provide opportunities for industries and governments worldwide.

Are extreme weather events associated with climate change?

Yes. The Obama administration has also cited to extreme weather events as evidence that climate change is already occurring, years earlier than expected.

Extreme weather events are associated with climate change through extensive research, verification and modeling. These analyses have been carried out by scores of academic and government-employed scientists. They have reached a remarkable consistency. Those models very strongly indicate, with a high degree of confidence, that mankind is contributing to change in the climate. These analyses also predict extreme weather conditions, such as severe storms droughts, floods and temperature extremes.

How can businesses adapt to climate change?

Another way of phrasing this question is: How do we keep our society, billions and billions of people around the planet and trillions of dollars in commerce, moving in a forward direction? I don't see how any company can really ignore it. These are risks which are substantial and can be material to many companies, particularly those with substantial capital and long-term investment horizons.

Some of the largest multinationals and the largest public companies are considering these issues -- "the price of carbon" is sometimes how it's described. These companies are evaluating their supply chain logistics and a variety of other issues that relate to the risks of extreme weather. These are being built into their long-term strategies.

Adaptation is simply preparing for extreme weather, however that might affect a business or other activity. For some, it means preparations for higher tides and seas. Adaptation may mean measures to break "heat sinks" in cities or measures to better control storm water. Some areas are more vulnerable than others and some are more "resilient" than others to extreme weather events. The risks may be the same, but more significant than the recent past.

Now, in addition to the real world risks of extreme temperature extremes -- of rising seas, of harsher winters and summers, of more severe storms occurring with greater frequency -- the regulatory risks are now evident. The Obama Clean Power Plan is but one example. Another is the EPA proposal to prohibit the use of certain fluorinated gases in the manufacture of a wide variety of products.

What are the opportunities for businesses that can innovate?

The answers will largely depend upon your business or industry.

In the chemical industry, making products with less energy is a key step. Another is to develop new chemicals that are less reliant on fossil fuels or which do not create additional emissions of greenhouse gases. Beyond reducing carbon dioxide emissions, reductions in methane, and fluoro-carbon gases emissions are areas receiving a great deal of investment and scientific attention. Among the more remarkable is a potential process to extract carbon dioxide from the air and create a fuel. And, there are many technologies trying to use algae as a fuel source.

The insurance sector, for example, is seeing challenges to actuarial risk assumptions on weather patterns. Are these extraordinary events covered? Water is also a huge concern as lawsuits are filed for excess storm water, lack of water and rights to water.

One of the opportunities across all sectors is to do what we call a carbon offset credit. We see investments in non-regulated activities through offsets being an important short term tool to reduce total emissions. If a company can find a new way of doing an activity – perhaps a new insulating material or perhaps a pollution control device – that can be put that into a "protocol." Once the protocol is scientifically validated, the company can follow that protocol in making its product or providing a new service , which in turn may create a carbon credit. We are implementing several of these projects, helping companies turn carbon offset credits into cash. It's a business proposition that literally makes green out of doing a green thing. Scores of these protocols have been scientifically demonstrated and accepted by relevant governmental agencies. California has taken the lead in the US with its use of very demanding offset protocols for achieving reductions outside of the regulated sectors (power, oil and gas and manufacturing) which, when proven, can be sold to lower the compliance costs of the regulated industries (we have been involved in a wide variety of proving these carbon credits, from early action, to current reductions and to creating new protocols for use).

One other phenomenon deserves mention here, a clearly international issue and particularly for developing countries. There are more carbon emissions from deforestation activities globally than from all sources of transportation combined. Most of these activities, such as illegal logging, occur in developing countries without a strong rule of law or compliance codes. There are not enough governmental resources to fund all the projects that are needed to control these deforestation and degradation measures. Accepted protocols exist to guide and monitor these projects -- if the resources can be found. Once the project sponsor proves that it has performed the carbon protective measures it promised, it can be issued carbon credits. Those credits are sought after by many investors and companies for their social responsibility commitments, which then funds continuation of the projects. Not only do these measures reduce carbon dioxide emissions, and preserve habitats for endangered species, they also provide education and employment opportunities for the indigenous residents of these areas. Consider what an opportunity those efforts, whether privately financed or governmentally driven, could make.

What can businesses do when they have significant existing investments, but are not in a high tech or "innovation" space?

Virtually all businesses are looking to improve, continually. Being more efficient is certainly a key strategy for climate protection; indeed note that two of the four "building blocks" in the EPA's Clean Power Plan are focused on efficiencies.

The notion of "stranded assets" sounds popular to some, But the world will need fossil fuel-based energy for a very, very long time. Those companies with significant assets, capital and access to markets can still diversify, as these components are critical to the development of new ideas and technologies. As long as companies see the big picture, there are significant opportunities.

Many of these opportunities relate to basic infrastructure, and how existing facilities can cope. There are perhaps more opportunities for businesses with respect to adaptation and mitigating the risk of weather, than in the climate change "mitigation" space – new ways to do more with less energy consumption and less emissions of greenhouse gases.

How do approaches differ around the world?

There are many different approaches now being used in different countries. Suffice it to say that carbon regulation, or the regulation of greenhouse gases, is very well advanced in Europe. The European trading system is and has been a leader. There are programs in North America, particularly California's Cap-and-Trade Program (AB32), and the Alberta Program, which also regulates greenhouse gas emissions.

There are many other ways of dealing with the issue. Taxes are certainly one option, but technological innovation is most important. Significant technological progress will be required to meet and cope with a growing society, with greater numbers of people aspiring to advance from a developing living standard to developed state. This will require increasing amounts of energy and technology breakthroughs just to meet basic living standards.

While it is important to understand how approaches differ, it is equally important to find synergies. As a result of the myriad approaches to reducing risk, mitigating impacts on air and water, and adapting to a changing climate, we are seeing massive pricing distortions in the market around the costs of mitigation . A key tool to addressing this issue is translating different activities into a common unit of measurement. There are experts now attempting to develop sustainability indices and unify those approaches.

What will be the role of state and local governments?

The states are at the forefront of the measures outlined by the Clean Power Plan, as they have been since the Clean Air Act was first adopted in 1970. Indeed, one of the interesting aspects of the Clean Power Plan is that it recognizes climate measures that were done by the states, without federal help or demands. Nearly 30 states have Renewable Portfolio Standards. The nuclear power industry produces electric power without carbon emissions. These comprise one of the four "building blocks" which EPA says it will recognize in state plans. States are also being asked by EPA to consider greater use of natural gas in electric generation, often at the expense of coal. However, at the same time, Carbon Capture and Storage projects are advancing around the country, supported by DOE grants, tax incentives, and other funding arrangements, including substantial private investments. These CCS projects are another tool that can be used by states.

Other key tools to be used, particularly at the local level, are known as "public-private partnerships". These are well-established in most areas of the world but not so developed in the United States. These will be critical to coping with climate change and extreme weather. Solutions for climate change will need to be applied on a local basis in order to most effectivly adapt to extreme weather, whether it's a drought, excess water or heavy wind. Solutions will be very site specific, and therefore each business is probably going to be looking for unique opportunities. Governmental agencies are going to play a critical role in coordinating these efforts.

The US military may be the largest investor and customer in protecting against climate change. The US has bases around the world, some of which could be affected by melting glaciers and the rise of ocean levels. We know that a sea level rise of only a small amount would displace millions of people, creating many more refugees and instability. Projecting military power takes a lot of energy, and the military has been quite resourceful in finding ways to save energy -- for example, by insulating tents in Afghanistan by spraying the tents with polyurethane foam so that less fuel is needed to cool portable barracks and by developing innovative bio-fuels. Look for the innovations from universities and the private sector to be taken up by the military, scaled and turned back into the private sector for further development and deployment.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
24 Oct 2017, Seminar, Washington, DC, United States

The Dentons Forum for Women Executives invites you to join us for a luncheon featuring guest speaker Liza Mundy, journalist and author. Ms. Mundy recently released her latest book, Code Girls, the riveting untold story of more than 10,000 spirited young American women who cracked German and Japanese codes to help win World War II.

27 Oct 2017, Seminar, New York, United States

Please join us for a milestone event, our 10th annual CLE Seminar for In-House Counsel.

1 Nov 2017, Seminar, Washington, DC, United States

Celebrate the 58th anniversary of Dentons' Government Contracts practice

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.