Jeremy's Blog 28th January 2022: Managing Climate Change
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 27th January 2022
Climate change discussion has focused on its mitigation by carbon sequestration and reducing greenhouse gas emissions. Affecting society and the economy, this has particular consequences for land management, farming and buildings. However, adaptation is equally important.
All forecasts point to significant further change, even if mitigation is as effective as intended by 2030 and 2050 – with so much of that beyond these shores. The Government’s latest Climate Change Risk Assessment (see webnote) makes sober reading. We have seen floods, storm, heat and droughts that were thought once a century now occurring more often with greater consequences. Quite small changes would accelerate that; early action can be more effective and less expensive.
Prime areas of early concern include supply chains for food and goods, the security of electricity systems, living and working conditions with human health and the effect on livestock, crops and forestry. The government is bringing its tools of regulation, taxation and frameworks for new markets to bear while private finance is taking a greater role.
Insurance companies and central banks are anxious to understand, control and reduce risk. Major funds from Aviva to Blackrock see change as essential for their businesses and the economies in which they work. Such investors can operate at the scale needed to have a substantial impact.
However, these are new areas of work with much to take shape. The sorry experience of early offsetting may now see better practice but the rules are not yet clear. We could be at a phase in the investment cycle where there is more money than good opportunities. If environmentally motivated investment drives prices beyond sustainable values, as by taking undue account of imagined future earnings, values will correct in the marketplace as part of markets evolving.
For mitigation, the small scale of farms and carbon’s low value will mean agriculture and land use needing to keep and control all the carbon they can, assuring supply chains.
Yet, other uses from forestry to nutrient neutrality bid, like solar farms, for land use and, like solar farms, that is then about terms and payment. Judging these will become essential. If the market proves to need fewer biodiversity gain sites, less will be paid and more will hold their hands.
Adaptation will also be about on-farm change – building resilience for livestock and crops, management of soil, nutrients and water. The key is to act where the business has control and thinking ahead becomes more important, preparing for the coming decades.