Executive summary
Heat waves and droughts, storms and flooding, rising sea levels, landslides and wildfires are the new risk reality of climate change. Reducing our carbon emissions remains necessary for a safe and sustainable future, but it is no longer sufficient. As a changing climate is inevitable, we must adapt.
From power grids to offshore platforms, from rural villages to large cities, our businesses and communities are highly exposed to climate hazards. For the maritime and energy sectors, for example, extreme weather events threaten companies’ supply chains and physical assets, including power plants, transmission lines, ships and offshore platforms. At the same time these sectors will be expected to provide better services, more safely and reliably. A harsher, more unpredictable climate may become the new norm, but prolonged power outages and
maritime disasters should not.
Business and society need to reduce our vulnerability and become more resilient: able to anticipate, absorb, accommodate, and recover from hazardous events.
Adaptation will mean not only physical engineering solutions such as the hardening of infrastructure, but also new design criteria, emergency planning, and wider changes to decision making processes to make them more resilient in the face of an uncertain future.
Our approach to adaptation
Our approach to adaptation encompasses four elements:
Taking a broader view of climate risks
In a globalised economy, business and society are becoming more complex and interdependent and an extreme weather event can bring down entire systems. Such systemic risk was seen in 2011, when floods in Thailand disrupted production of computer disk drives, with cascading consequences for manufacturers and suppliers around the world. Systems thinking is needed to capture the full landscape of risks and solutions.
Estimating risks and characterising uncertainty
A changing climate creates hazards that are difficult to predict, and this uncertainty presents a challenge to decision makers. Risk-based decision making can evaluate a range of possible solutions and DNV GL has developed a risk assessment framework, which takes into account climate hazards, vulnerabilities and losses. By quantifying risk in monetary terms, this framework creates a transparent basis for decision makers to find the most cost-effective portfolio of adaptation measures.
Managing vulnerability and resilience
To reduce vulnerability and build resilience in business and society, we need a comprehensive risk management strategy. Building upon a risk assessment, this strategy should encompass leadership, flexibility, innovation, response, recovery and learning.
Collaborating for greater impact
In an interconnected system, collaboration is essential as all parties benefit from each other’s resilience. By working together, businesses and communities can coordinate their efforts in preparation, response and recovery to extreme events. Furthermore, collaboration can turn existing information into accessible knowledge, as
experience and best practices can be shared across sectors and geographies.
Five examples illustrate the range of impacts that climate change can have on business and society. Extreme waves are likely to become higher, posing risks to a number of industries, including maritime. Our study examines structural failure of tankers and gives recommendations for increasing hull strength.
- The Panama Canal could suffer from water shortages within decades due to climate change. Our cost-benefit analysis shows that an existing adaptation plan is already moving in the right direction to ensure the Canal's continued operation.
- Extreme waves can damage oil and gas platforms. Our analysis suggests that future conditions may render existing rigs unsafe, according to present criteria. If so, decks should be raised and support jackets strengthened.
- When Superstorm Sandy hit New York in 2012, it caused unprecedented flooding. Our study shows that in the future, higher sea levels and higher temperatures would make the flooding even worse.
- Sandy also severely damaged electrical infrastructure. Based on the same simulations of a future storm, we explore adaptations to reduce the impact of flooding and wind on electrical systems.
Towards a resilient future
Our goal at DNV GL is to help business and society to improve their adaptation strategies and become more resilient. We have created a web-based adaptation knowledge platform intended to raise awareness about adaptation and to share information between different stakeholders.