Jeremy's Blog 21st July 2023: Climate Change - Adaptation and Professional Work
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 20th July 2023
Setting records, Mediterranean Europe is for some days nudging 50oC (122oF) while that has been broken in parts of the USA and China. While Italian dairy farmers install fans and sprinklers for their cows, this is only two months after seven months’ rain fell on Italy’s Emilia Romagna in two days, flooding 43 towns, with over 400 landslides and displacing 50,000 people.
As that shows, climate change is not simply a matter of rising temperature but of more frequent extreme events. In January 2021, Madrid had 24 inches of snow; at the weekend, night time temperatures in Murcia were above 30oC. By June 25th this year was Canada’s worst year for forest wildfires; by yesterday over 27 million acres had been destroyed. In early June, New York’s air quality was worse than Delhi; the smoke then reached Portugal.
With the long term processes of climate change, we have to assume that more extreme events are already to come, even if all present mitigation policies work. Among other effects, that will affect agricultural production around the world and is a factor in migration. We have to adapt to this change and ensure resilience for that greater range of challenge and risk.
Even though the UK might not this year match last year’s records, on Tuesday the government published its Third National Adaptation Programme. It reviews the economy-wide risks from flooding, the issues for buildings and work, the risks to electricity, water and transport infrastructure from flood and storm and water shortages with rising costs to the economy. Then, while the threats to food production may well be greater elsewhere in the world, it states:
“Climate change is the biggest medium to long term risk to the UK’s domestic food production … Agricultural productivity could be at risk from soil erosion, extreme heat, flooding, drought, sea level rise or a greater number of pests, pathogens and [invasive species] …. The changing climate also provides opportunities for growing new crops that that will be better suited and more resilient.”
It intends that adaptation will be included in environmental land management schemes, the forthcoming Local Nature Recovery Strategies and other measures. Scotland is framing its future agricultural policies around climate change.
While those may set a national framework, the issues of risk, opportunity, resilience and adaptation will be felt as practical matters at the levels of individual properties and businesses and so be for professional work. As Flood Re’s Build Back Better enables homeowners to install up to £10,000 of property flood resilience measures after a flood, it may now be a time to look ahead. That work might be in reviewing and advising clients on these matters, not only on renewables, carbon and other mitigations but also on adaptation. Even if these issues might not yet affect values, it might also be a topic in the commentary in some valuations.
Central banks are concerned that businesses might not understand vulnerable supply chain and other risks. In addition to the G20’s Task Force for Climate-Related Financial Disclosure, both the international accounting and auditing standards bodies look for financial reporting standards for large businesses to cover climate-change related matters.
It seems sensible for property-based, resource and weather-dependent small businesses with longer term outlooks, like farms and estates, also to look ahead, especially when undertaking new projects or reviewing strategy. As trusted advisers, both bringing a wider view and knowing the property and business, members should be well placed to assist that.