Business and climate change: rising public awareness creates significant opportunity.

• Author: Howard, Steve

Imagine the scene: the year is 2027--China is responsible for 15 per cent of the world's energy consumption; California has imposed permanent water rationing; relief agencies warn that late rains again raise the spectre of widespread hunger in southern Africa; and cases of malaria are being reported among holidaymakers in Greece and Turkey.

It is impossible to predict exactly what the future holds, but given the current knowledge of climate science, this picture is certainly not unrealistic. If it becomes a reality, it will significantly affect what "doing good business" is going to entail in 20 years, as a diverse set of drivers begins to act more forcefully on the political and economic landscape, radically altering the world in which we live and work. There is no doubt that the effects of climate change will become harder to ignore.

Atmospheric carbon dioxide (C[O.sub.2]) concentration, approximately 280 parts per million (ppm) before the industrial revolution, has increased to around 380 ppm today. Each doubling of the greenhouse gas (GHG) concentration raises the Earth's equilibrium temperature by about 3° Celsius. GHG emissions are rising globally and the Earth's temperature, under "business as usual" trends, will likely increase by between 2°C and 4.5°C by 2100. The Intergovernmental Panel on Climate Change suggests that in order to prevent a 2°C rise--the widely accepted threshold for unacceptable and unpredictable change--global emissions growth would need to peak by 2015 and then decline fairly sharply to reach the 50 per cent cut required by 2050.

Climatic changes will have direct impacts on companies, for example, on infrastructure and investments. Legislation will become more far-reaching and extensive as electorates wake up to the problem and Governments react to the consequences of changing weather and the costs of adaptive action. The seeds of a regulatory framework are already in place, the best known initiative is the Kyoto Protocol, committing ratifying countries to reduce their C[O.sub.2] emissions over fixed periods of time. However, political progress is also being made in many other contexts.

Despite federal absence from the Kyoto process, many American and Australian states, as well as world cities, are developing policy frameworks to address climate change. For example, California Governor Arnold Schwarzenegger recently signed Assembly Bill AB32, which places a cap on the state's GHG emissions and creates a clear...