Sunday, August 14, 2011

Who's most at risk from climate?

Giles Parkinson in Climate Spectator (Australia): The extraordinary volatility in financial markets over the last few months and years has led many of the world’s leading funds managers to make a fundamental reassessment of risk and opportunity – driven by the rising stress in resource availability, high commodity prices and, of course, soaring debt levels.

A new report by HSBC says these stresses are likely to be multiplied in coming years by the climate factor and need to be taken into account by investment managers and business strategists, particularly as the world seems less capable of limiting global warming to the targeted 2°C. “This is not a distant threat but a present reality,” the bank says, noting the slump in food yields, changes in water availability and the cost of extreme weather events. “Uncertainty surrounding the scale and speed of future impacts mean that climate, food, energy and water risks need to be factored in.”

To help make those assessments, and decide where investment decisions should be directed, the bank has assessed the climate vulnerability of the G-20 countries in terms of their exposure and sensitivity to climate change and its impacts on people, the environment, and key resources such as water, food and energy; as well as their ability and capacity to adapt.

The most vulnerable countries were considered to be India, Indonesia, China, Saudi Arabia and Brazil. The significance of these countries is that they are expected to account for more than one third of global output by 2050. For those making long-term business and investment decisions, HSBC says, “the time for integrating the climate factor has arrived.”...

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