Business and Policy Solutions to Climate Change

Practitioners and policymakers are increasingly shifting their attention away from the almost exclusive focus on climate change mitigation to consider adaptation plans and find the optimal combination of adaptation and mitigation strategies. Based on realistic scenarios showing that global temperature rise will exceed 2 °C above the pre-industrial level threshold, actors are expected to not only reduce the negative impact of existing hazards but also to act and adjust their activities and behaviors based on the expected threats that climate change poses. However, the discussion around concrete business and policy changes required to adapt to this new warmer world is still in very early stages. To contribute to the knowledge base for this discussion and to provide valuable viewpoints, this collection presents innovative business and policy approaches to climate change adaptation across various economic sectors and locations. It reviews and critically analyzes the social, economic, environmental, and cultural dimensions of the complex adaptation trajectories. This introductory chapter summarizes the complex problem of climate change adaptation and provides an overview of the 17 contributions featured in the collection.

Anthropogenic global warming (AGW) requires net-zero human greenhouse gas (GHG) emissions to stabilize the climate. As achieving zero emissions is unrealistic, offsetting is necessary to achieve net-zero (emissions minus offsets). Organizations need to become carbon-neutral, both by reducing emissions and by removing atmospheric CO₂. However, much of the language used in discourse surrounding carbon-neutrality and net-zero is vague; more rigorous definitions are required. Currently, emissions are “neutralized” through “deemed offsets,” which can include GHG sinks, reductions, and allowance schemes. Metrics are employed to determine offsetting amounts. We extend current practice using a “do no harm” principle to better account for different GHGs’ climate impacts. We examine emissions reduction and the appropriate use of offsetting (Rayer, Ethical and Sustainable Investing and the Need for Carbon-Neutrality. In T. Walker, N. Sprung-Much, & S. Goubran (Eds.), Environmental Policy: An Economic Perspective (pp. 213–232). Wiley-Blackwell, 2020), including challenges such as carbon storage robustness (Broekhoff et al., Securing Climate Benefit: A Guide to Using Carbon Offsets. Stockholm Environment Institute & Greenhouse Gas Management Institute. Retrieved June 25, 2021 from Offsetguide.​org/​pdf-download/​, 2019; Joos et al., Carbon Dioxide and Climate Impulse Response Functions for the Computation of Greenhouse Gas Metrics: A Multi-model Analysis. Atmospheric Chemistry and Physics, 13, 2793–2825, 2013). We illustrate these guidelines using the PAS 2060 carbon-neutrality standard (BSI, PAS 2060:2014 Carbon Neutrality. Retrieved February 5, 2020 from https://​www.​bsigroup.​com/​en-GB/​PAS-2060-Carbon-Neutrality/​, 2014). In summary, while offsetting is required for climate stabilization, schemes differ in their capacity to halt AGW. High-quality offsetting is required to stabilize warming; herein we discuss key physical considerations.

Recognition of the value of green and blue infrastructure in cities, or urban green infrastructure (UGI), has grown alongside our expanding understanding of climate change adaptation, biodiversity, and the importance of such spaces to human health and wellbeing. Tools have been developed to assist in planning for adaptation, in some cases with digital components. These tools improve understandings of green and blue spaces, integrate the consideration of climate risks into the planning processes, and lead towards enhanced green and blue infrastructure by addressing risks through nature-based solutions (NBS). This chapter explains the value of UGI for climate change adaptation and biodiversity. It reviews a selection of existing methodologies that seek to answer the question of how to integrate green infrastructure into urban planning. A case study of GI mapping app development using a GI Factor methodology at the University of Edinburgh provides insight into tool development, method, first use, and revision via citizen science volunteering. The analysis provided serves to inform decisions on the use of green space factor methods when adapting urban contexts; this can address the twin crises of climate change and biodiversity loss.

This chapter focuses on organic agriculture, also referred to as bio-agriculture, eco-agriculture, and agroecology, as one of the mitigation and adaptation strategies being implemented by governments and civil society. The chapter starts by providing an overview of political and economic capitals, and the populations of the territories that were victims of colonization are impacted by climate change and resource depletion. It then presents the history of agricultural ecology, explaining the emergence of the organic movement, and analyzes the movement’s certification and standards. However, these standards are perceived as barriers for potential producers to enter into niche markets. To overcome this, civil society developed a new tool called Participatory Guarantee Systems (PGSs) to integrate producers into local organic value chains. The chapter selected two study cases. The first is the Municipal Achocalla’s PGS, which was organized around the active participation of public and private actors recognized by the National Law No 3525/2005 Promotion of the Organic Agriculture in the Plurinational State of Bolivia. The second is the Familia de la Tierra PGS (Private PGS), initiated by Colombian civil society but not recognized by a legal framework. By analyzing the product, process, and functional upgrades, labeling emerges as the most critical value-adding mechanism because it provides information to consumers. The chapter concludes by proposing that a municipal PGS, which involves many actors, is more successful than a private PGS because it can cope with the increasing demand for organic products in different contexts.

Extended periods of drought and extreme temperatures are promoters of desertification and thus the loss of arable land in semi-arid and arid regions. Large-scale afforestation and revegetation are proven methods in desertification control. The process of natural succession allows nature to develop diverse vegetation that is best suited to withstand future climatic challenges associated to drought and heat. The process has been applied to the drylands of Northern China since 2006 with the aim to sustainably revegetate the degraded land; now, an increase in biomass is detectable. One disadvantage of this future-oriented method of succession is that it requires many years of undisturbed development, particularly in hot and dry climates. We propose a simple and fast way to expedite the development of a vegetation cover in (semi-) arid climates. In response to the hydro-ecological stress associated with massive large-scale afforestation, we suggest the concept of revegetation via “hydrologic networking,” which aims to hydrologically connect larger vegetation areas. Parallel greenbelts are planted to form inner compartments somewhat protected from wind and related drought so that vegetation development is accelerated in a process of “assisted natural succession.” Here, we develop and optimize the model in the direction of expedited succession. Ours is a hybrid method combining active planting and the succession of native and climatic adaptable savanna vegetation. It will reduce planting efforts by 75% per area, resulting in vegetation that is hydro-ecologically adapted to the local environment and offers diversity with the ability to adjust to future climate parameters.

The climate is already changing, making climate change adaptation (CCA) an essential component of any sustainable development strategy. Similarly, the capacities of different actors to adapt to climate change are significantly affected by social and economic factors including nutrition, health, and employment. The Sustainable Development Goals (SDGs) characterize progress toward the aforementioned factors as well as CCA through targets under SDG 13 (Climate Action). More recently, the 2019 Global Sustainable Development Report (GSDR) illustrates the interactions within and between SDGs, showing how many other SDGs influence progress toward CCA and vice versa. Businesses need to be mindful of these complex interdependencies when developing risk management, supply chain management, and sustainability strategies to make effective contributions to CCA while avoiding ineffective or maladaptive strategies. In this chapter, we demonstrate these interdependencies by modeling the interactions defined in the 2019 GSDR using the cross-impact balances (CIB) method, which identifies self-reinforcing scenarios and traces the systemic effects of interventions. We focus our analysis on how existing global business priorities may push the system toward certain scenarios over others, centering the implications for CCA. Through our analysis, we find six self-reinforcing scenarios for global SDGs, half of which indicate progress in CCA. We also identify six SDGs that appear critical to achieving all SDGs, highlighting gaps in current business efforts and areas for additional focus. Among these critical SDGs is SDG 13 (Climate Action), reaffirming the importance of CCA in progress toward sustainable development.

This chapter discusses the relevance and ethical responsibilities of financial institutions in the context of climate change mitigation and adaptation. It does so by analyzing the business link between banks and the fossil fuel industry as well as the latest market trends and developments, including the emergence of the climate bond market. It also provides theoretical and empirical arguments for a business case for climate finance and, hence, for corporate social and environmental responsibility. The chapter shows that banks are an essential element in achieving the goals of the Paris Agreement and argues, from a business perspective, for banks’ divesting from fossil fuels and investing in renewable energies.

Climate change creates large-scale environmental, social, political, and economic changes. This chapter reviews problems associated to climate change within the frame of the Schumpeterian growth model for the US, Germany, Russia, China, India, Japan, and South Korea (sample for the 2002–2018 period). Co-integration results reflect a long-term balance relationship between CO₂ emissions, GDP, fixed capital investments, government expenditure, genuine savings, entrepreneurship, R&D, and patent applications. We conclude that GDP, fixed capital investments, and innovations increase emissions, while government expenditure and genuine savings decrease emissions. Causality results confirm the feedback hypothesis between CO₂ and growth, fixed capital investments, government expenditure, genuine savings, and patent applications. Moreover, a one-way causality relationship from R&D and entrepreneurial activities to CO₂ emissions is observed.

Culture provides a foundation for worldview. Historically, it has been aligned with a religious or spiritual perspective, simultaneously shaped by and affecting the environment. With the establishment of the current global market economy, the economic framework, which is consistent with some religious perceptions related to human dominance over planetary resources, has influenced culture. This has led to high resource use and a consumer focus. However, the externalities related to market-defined economic progress are inconsistent with human and environmental well-being; they are in fact a primary contributor to the speed with which climate change is accelerating. This chapter highlights active stakeholder engagement as a tool to modify human action and the operation of the economic system to ultimately align human behavior with climate change adaptation.

This chapter proposes a portfolio choice model that describes investors’ adaptation to climate change as a temporal process; in this model, investors’ perception of climate hazards shapes their preferences and decisions over the duration of their financial portfolios. Investors tend to revise, rebalance, or even exit the market in the short-run amid a major climate event due to the perception that climate hazard is increasing over time. Moreover, investors who believe that climate hazards are rising over time tend to be skeptical of investments in clean energy and/or mitigation or adaptation projects. The analytical result of the model shows that a long-term strategy with diminishing climate hazard is more rewarding. Thus, investment strategies and financial policies that focus on reversing this behavior are essential in ensuring successful climate adaptation and stability in financial markets.

For the last decade, climate change has been a major issue in urban policies and land use planning. Floods, sea-level rise, and heat waves are hitting cities with recurring virulence. Cities’ master plans have successfully integrated greenhouse gas mitigation policies into their regulatory frameworks for the control of both natural and man-made risks. However, climate change adaptation has not been incorporated in the same way. Few cities have taken major steps toward mainstreaming an adaptation that would pave the way to including exposure and vulnerability considerations into urban development. Changes in regulations and ordinances have made it possible to integrate climate risks for greater urban resilience. Cities such as Vienna and Toronto have developed a legal framework to fight against urban heat islands. Lisbon and the American state of Florida have defined urban adaptation areas in flood management strategies. New York has pioneered implementing more flexible ordinances to accommodate urban developments to future sea-level rise. These examples show how urban planning is an effective tool for mainstreaming adaptation strategies. This chapter considers efforts toward integrating climate change adaptation, with initiatives that go beyond sustainable urban development, as part of a new framework of flexible and experimental planning. The need to incorporate flexible planning strategies in line with climate variability will be one of the main challenges for regional and urban planning in the next decades.

To understand what lies beyond the two degrees, we must first understand how and why we arrived to where we are today. Over the last decade, the building sector has been responsible for 40% of total energy demands; this industry should therefore be closely analyzed to help reduce the environmental impact caused by the extraction and production of building-related resources and to determine what we should change to slow the damage, or even reverse it. This chapter investigates three key areas of concerns: modern sustainably building practices, sustainable architectural theory, and the gap between the two. Through our investigation, we aim to demonstrate how the green building industry’s failures can be explained through the concept of path-dependency. This notion explains that early technological choices might have disproportionate effects on developing a specific field in the future, merging both professionals and scholars onto the same road. Building on examples of early and contemporary performance simulation tools and plugins, we discuss the theoretical dimension of sustainable building practices and path-dependency. In addition, we show why and how we continue to strive for certification standards and green awards, even though they are proven to have little positive environmental impact. This chapter contributes to ongoing debates on the role of performance-based modeling in sustainable building practices and makes suggestions as to how building specialists should evolve their thinking about ecology today in order to prepare for practice in the post-2 °C era.

Trinidad and Tobago (T&T) faces a waste management problem. Increased economic activity and consumption both contribute to the increase of municipal solid waste in the country. The country’s current waste management system involves the collection and dumping of waste in landfills; all landfills are under stress because of frequent fires and the improper disposal of waste by the general public, the latter generating concerns about public health as well as environmental degradation. Waste-to-energy, which refers to the production of electricity through the destruction of waste, can act as a possible solution to the country’s waste management problem. The Government of the Republic of Trinidad and Tobago (GORTT) has recognized the potential of this technology and has expressed interest in implementing this in T&T. The development of a waste-to-energy facility in T&T could also help the country achieve its renewable energy production goals, in line with the country’s nationally determined contribution (NDC) commitments per the Paris Climate Agreement. T&T presently generates approximately 99% of its electricity from natural gas, a clean energy source. The country is also a low emitter of anthropogenic carbon dioxide on a per capita basis. Furthermore, the country has an excess supply of electricity. These issues call for a review of the economics of waste-to-energy in T&T and the identification of opportunities in the waste-to-energy value chain to make the venture economically feasible.

The Arctic is a developing region and a new frontier for extractive resources and business. It has been affected by important drivers of change such as climate change, modernization, and the transformation of its economic systems. This change requires adaptation on different societal levels. The overall aim of this chapter is to analyze the role of business in the adaptation to Arctic climate change and to investigate how to assess risks in the field in order to create adequate adaptation mechanisms and enhance adaptation methods and capabilities. This is done by exploring the impacts of climate change in the Arctic, by explaining the uniqueness of the region’s economic structure and the economic aspects of doing business in the Arctic, and by examining business structure and adaptation in the Arctic. This allows us to draw conclusions on business’s contribution to climate change adaptation in the Arctic and to propose a conceptual framework showing how Arctic economies are embedded within the institutional, environmental, social, and cultural context, including the elements of business adaptive capacity. The conceptual framework proposed has implications for the academia as well as for policymakers and the business sector by recognizing the essential elements supporting the business role in climate change adaptation in the Arctic.

Now more than ever, extreme weather events, driven by climate change, pose serious risks globally. These events are projected to increase in frequency, intensity and duration, giving rise to significant threat and the likelihood of greater costs in terms of economic losses, mental/psychosocial stress, insurance claims, political unrest, and in some cases, fatalities.

For Canada, climate change has become one of the most pressing issues over the past few decades. Historically, Canada has been at the forefront of climate preparedness. More recently, Canada has seemingly not kept pace with its international counterparts who have implemented initiatives such as novel cost-sharing programs for high-risk properties, national tri-governmental partnerships for flood management and government-run and administered flood insurance programs.

The primary issue for Canada is that individuals, private businesses, capital markets, and all levels of government lack mechanisms to deploy well-informed standards and guidelines that have been developed to better adapt and improve resiliency to a changing climate.

That said, Canada is not without success in its attempt to become more resilient against climate change. As this chapter explores, household- and lot-level flood risk resources can help educate homeowners on how to better protect properties from flooding, well-developed standards and guidelines can assist in preparing existing communities and future developments from climate impacts, while financial standards and disclosure guidelines offer ways for companies to report on material climate risks. Armed with these new developments, along with insights from other countries’ climate initiatives, Canada has the potential to become a strategic leader once again in the global fight against climate change.

On September 2, 2019, Hurricane Dorian became the first recorded Category 5 hurricane to make landfall on the Grand Bahama Island. With wind speeds of 185 mph, it was also the strongest hurricane on record to hit the Great Abaco Island. The occurrence of Hurricane Dorian in 2019 marks the fourth straight year in which at least one Category 5 hurricane formed in the Atlantic; this is the longest streak on record. The rapid intensification of hurricanes and the increase in the frequency of hurricanes and other storms are consequences of climate change. These consequences prompt the following question: who should be financially accountable for the damage and loss caused by Hurricane Dorian and other future hurricanes triggered or worsened by climate change? Some argue that high-emitting countries must internalize the negative externality of their anthropogenic greenhouse gas (GHG) emissions. Moreover, there is a need to mobilize damage and loss climate finance for small-island developing states (SIDS) apart from standard adaptation and mitigation finance. This chapter explores how financial resources may be mobilized to compensate Caribbean SIDS for the loss and damage incurred by climate change and extreme weather events.

This chapter queries whether indigenous knowledge in Africa is influenced by local experimentation, by contact with an external system where climate change is a significant factor, or by integrating both and, if so, how? To answer this question, literature review method was used to evaluate published peer-reviewed journal articles from 2010 to 2019. This chapter develops an analytical framework based on extensive literature on local and indigenous knowledge in the context of climate change and identifies a set of criteria. The study’s findings show that local households strongly believe and trust in the ingenuity of local knowledge, which is readapted with modified solutions to respond to new challenges of climate change. However, the relevance of local knowledge in dealing with future challenges is still uncertain. Limited attention is paid to the institutional barrier within government support, and there are drawbacks in knowledge integration. Based on the latter, the study propose recommendations for locally attuned remediation measures. The structure of knowledge integration can be improved by using a rights-based framing and developing mechanisms to ensure both the integration of local knowledge and building of overall resilience of climate adaptation systems.