From: Issue 39
Adapting to the New Normal
As the effects of climate change become more pronounced, are corporations and governments talking enough about resilience?
James Hansen is director of NASA’s Goddard Institute for Space Studies and one of the world’s most respected climate scientists. Earlier this year he spoke at the prestigious TED conference in Long Beach, Calif., and stated what may seem a non-threatening fact: data collected from 3,000 Argo floats that record temperatures around the world’s oceans at different depths showed that the earth’s energy imbalance is precisely “six-tenths of a watt per square metre.” The calculation represents the extra energy, trapped in the earth’s atmosphere, which feeds global warming.
Then came Hansen’s kicker.
“That may not sound like much,” he remarked, “but when added up over the whole world… it’s the equivalent to exploding 400,000 Hiroshima atomic bombs per day, 365 days per year. That’s how much extra energy earth is gaining each day.”
According to Hansen, this may be an unfortunate precursor to what could amount to global sea-level rise of between one and five metres during this century.
Welcome to the new normal.
The new normal is a period of human history when natural disasters tied to climate change and political uncertainties related to economic and financial distress are all too common. Yet, it’s mainly the economic and financial crises we face that dominate the concerns of businesses, governments and citizens. After all, there are bond haircuts, eurozone panics, morally dubious investment banks, unmanageable consumer debts, employment uncertainties, and popular protests surrounding the “one per cent” to contend with.
But organizations and people tend to adjust in a reactive fashion to our predictably unpredictable business climate – what some experts describe as one of “permanent volatility” – and the deteriorating condition of our planet. To be proactive in this unstable operating environment would require that companies, as well as local, regional and national governments, prioritize resilience. Put another way, they need to build and retain the capacity to cope with various shocks in the system, including those related to energy, sovereign debt, currency markets, supply chains, consumer sentiment, employee concerns, as well as that contentious wild card, climate change.
Embedded in the concept of permanent volatility is the underlying risk of being blindsided by unexpected circumstances not just once, but again and again. Permanent volatility requires that organizations develop the capacity to be knocked down, to get up, and to take steps to re-stabilize. This is the rationale for why resilience is central to adaptation amid the 21st century’s “uncharted waters,” an era future historians may judge to have endured the greatest public loss of political, economic and financial flexibility in modern history.
Between 2007 and 2010, for example, funds allocated by the United States, European Union and other G8 nations to promote macroeconomic stabilization amounted to roughly $17 trillion, according to political economists Stephen Gill and Isabella Bakker at York University in Toronto. A significant percentage of these monies was dedicated to private-sector bailouts. These funds are unlikely to be recouped and thus may contribute to the public sector’s lack of financial flexibility in countering long-term risks, including the potential need to restructure long-term debt, as well as find additional funding for civil preparedness and infrastructure hardening related to climate adaptation.