US Climate Change Assessment
Guest Post by James Kline (first posted on CERM ® RISK INSIGHTS – reposted here with permission)
In November 2018, the U.S. Global Change Research Program issued Volume II of the Fourth National Climate Assessment Report. Volume I was issued in 2017. It deals with the science behind global change. Volume II deals with the impact of global warming on natural environment, agriculture, energy production, human welfare, and societal impact. This article discusses the assessments made in Volume II.
Global Change Research Act
Congress passed the Global Change Research Act of 1990. It created the U.S. Global Change Research Program. It requires that every four years a report be made to Congress and the President, on the Global Impact of Climate Change. The report is to integrate, evaluate and interpret the findings of the research and to analyze the effect of global change on the natural environment, agriculture, energy production, human health, welfare and human social systems. The assessment is based on analysis of past events and modeling to determine future probabilities. The policy recommendations are considered high level. The primary policy recommendation is elimination of greenhouse emissions. It is worth examining some of the areas examined and their associated risks.
Cost of Global Environmental Change
The report deals with global environmental change and provides instances of the cost in the United States. For instance, the California Tubbs Fire of 2017 burned part of Napa, Sonoma and Kae counties. It caused an estimated $1.2 billion in damages and destroyed over 5,000 structures including 5% of the housing stock in the city of Santa Rosa. Hurricane Harvey, in 2017, knocked out power to 300,000 customers in Texas, with cascading impacts on hospitals, water and wastewater treatment plants and refiners. Along the U.S. coast line, $1 trillion worth of property are threatened by rising sea level.
One of the important points in the report is the interconnectedness. Climate change adds risk to aging and deteriorating infrastructure, water and food production and economic development. The cascading impact threatened essential services. For instance, increasing temperature can adversely impact ski resorts across the nation. This will reduce employment opportunities and government revenue. The lack of resources limits the ability of governments to adequately respond to the risks associated with global warming and provide necessary services.
Actions to Reduce Risk
The report notes that communities, state, local governments and businesses are acting to reduce environmental risks. The key action is to reduce green house gasses. Other efforts taken include financial risk reporting, capital investment planning, development of engineering standards and disaster risk management. Successful adoption has been hindered by the presumption that conditions like those experienced in the past will continue. This presumption is false and requires a more comprehensive continual risk management process.
Problems with Risk Reduction Approach
As noted, this report’s recommendations take a high-level policy approach. Thus, the emphasis is on reducing green house gases. The recognition that the problems associated with global environmental change is interconnected and can result in cascading effects is important. The recommendation that action needs be taken is also important. How risk reduction efforts are to be carried out, once green house gas reduction legislation is passed, is not specified. There is also a problem with the impact of the policy.
Even if greenhouse emission control policies are implemented in the U.S., if other countries do not follow suit, the impact might be limited. Riots in Paris France indicate that climate control taxes face substantive public resistance. Further, implementation of the green house emission policies is not likely to have am immediate impact. Consequently, if risk mitigation efforts are to be effective, some intermediate policies are needed. Also needed are administrative processes geared toward risk mitigation.
Intermediate, Short Term andAdministrative Approaches
Numerous countries and organizations are working to implement such policies. For instance, the Kingdom of Morocco, is working with the World Bank to implement a series of policies to manage natural hazards and other risks. Two of the key policy elements are: 1. Creation of a Natural Hazard Insurance Fund. The fund is partially supported by the Kingdom and backed up by private sector Hazard Insurance. And 2. The use of the International Organization for Standards ISO 31000, the enterprise risk management (ERM) framework, to develop Kingdom and subnational government level assessment and prioritization of all the risks they face.
Governments around the world are trying different strategies to reduce the adverse impact of natural hazards. Some of the strategies include purchasing property which is subject to repeated flooding. Ensuring that building codes meet international standards. Requiring that home owners have flood insurance.
While these are only some of the options being considered, the universal element is risk administration procedures. Without a consistent ERM approach, such as ISO 31000, organizations may not consistently monitor or treat risks. For instance, the City of New Orleans two weeks before Hurricane Harvey moved to Louisiana and twelve years after the damage done by Katrina, had 15 out of 120 total pumps out of service. During this two-week period, New Orleans experienced significant rain fall and flooding because of the lack of pumps. Despite the experiences like Katrina, without a formal risk assessment process compliancy can creep back in.
The Fourth Annual Global Impact of Climate Change Report indicates that climate change will adversely impact the natural environment, agriculture, energy production, human health, welfare and human social systems. Its main recommendation is to reduce green house emissions.
Even if this recommendation is followed, there are several problems. If the United States does implement greenhouse emission control, other countries may not follow suit. The emission tax riots in Paris France is an example of the problem countries may face. Without broad based global support, implementation in the United States may have little or no impact. Equally problematic is the fact that even after greenhouse emission legislation is passed, reduction may take some time. The time lag will require mid-term policies and administrative requirements.
While the possible policies are numerous, the universal administrative requirement is a comprehensive risk management process. This process must cut across organizational silos and allow organizations to identify and prioritize all risks, so appropriate mitigative actions can be taken. Such an administrative procedure is ERM. Without ERM, the identification of risk is piece meal and mitigative actions will not be administered in an efficient manner.
James J. Kline is a Senior Member of ASQ, a Six Sigma Green Belt, a Manager of Quality/Organizational Excellence and a Certified Enterprise Risk Manager®. He has over ten year’s supervisory and managerial experience in both the public and private sector. He has consulted on economic, quality and workforce development issues for state and local governments. He has authored numerous articles on quality and risk analysis in government. He can be reached at firstname.lastname@example.org