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The UN Report on Climate Change and its Business Ramifications

As if the war in Ukraine were not enough, the UN has released a report on climate change that is downright frightening. The report’s three main takeaways are that global warming “is a threat to human well-being and planetary health”. According to the report, the entire planet must begin to significantly reduce carbon emissions during its “brief and rapidly closing window” to do so. If we do not, we will all be sicker, poorer, and less abundant, all of which will have massive impacts on the business world and every person’s everyday life.

First, global warming will be expensive. Even in an optimistic warming scenario, the population exposed to once-in-a-century flooding will increase by at least 20 per cent, which has obvious effects on stability, construction, and insurance. Moreover, threats to supply chains that we faced during the pandemic will pale in comparison to future supply chain woes. The world’s fisheries and bread baskets will move to adapt to changing temperatures. And even if humanity holds warming to 1.5 degrees Celsius—which would require aggressive global climate policy—the chance of crops failing across much of the world at the same time will increase.

Next is the report’s second conclusion: a warmer world will be a sicker world. “Climate change has adversely affected physical health of people globally and mental health of people in the assessed regions”, concludes the report. With warmer temperatures will come higher risks of diseases that thrive in warmer regions, such as dengue fever. Dengue and other mosquito-borne viral illnesses will increase on every continent except Antarctica and Australia. Viruses like the coronaviruses that cause SARS or COVID-19, which leap from animals to people, will pop up in new areas. Toxic algae blooms will increase the risk of water-borne diseases in many regions, since these blooms occur as temperatures increase. And as parts of the world get dustier and smokier, heart and lung health will worsen.

The report’s third and final conclusion: there is so much we do not know. When we change fundamental aspects of the natural world, we simply cannot predict the harms these changes will cause. As the planet warms, the natural world will degrade. This is not a new idea, but still, it stands out in the report as one of the hardest effects of climate change to reverse. The most hopeful climate scenario now available is that the planet warms more than 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, above its preindustrial temperature by the middle of the century—but then humanity manages to prevent “overshoot”, and its mean temperature begins to fall. But even in that storyline, alpine glaciers will be lost forever, as will the mountain streams and valleys that thrive on their meltwater. Forests consumed by wildfire will not necessarily grow back in the same way that they were.

If countries and companies do not begin to limit their carbon pollution, then global warming could outpace our ability to adapt to it. Like it or not, the business world has major culpability in this area. We have the responsibility to lead the way, and every decision we make will affect every single generation to come.