Drivers of Change
Humans love to predict the future. Few succeed. Those who come closest do so by
understanding the trends that are driving change. In a meeting of experts convened to
create a “Green Print” to guide the City of Denver, this author stated that there exist
global forces that will drive change that cities must be aware of. As these begin to
impact cities like Denver, they could dramatically shift the metrics by which a Mayor
judges whether a program to save energy is cost effective or not. Mayor John
Hickenlooper answered by recounting his visit to New Orleans a year following
Hurricane Katrina. “It is an awesome experience,” he stated, “for a big city Mayor to
drive for blocks and see no one living in a city. We lost a major American city. The
unthinkable is no longer unthinkable.”
One hurricane is not a trend. But as the impacts of the trend of global warming become
more obvious, Mayor Hickenlooper’s reaction will become more
common. And climate change is only one of the drivers facing us.
This paper discusses some of those drivers. They will bring
change to your community, whether you like it or not. This may
make them seem outside of your control, but if you can understand
the nature of these drivers you can put in place the sorts of
programs that can enable you to cope with them. Understanding
these drivers can also enable you to create new businesses,
reduce costs for existing companies and capture an array of
opportunities that will arise as the future unfolds.
“The
unthinkable is
no longer
unthinkable.”
- Denver, CO
Mayor John
Hickenlooper
The Business Case for Climate Protection
- L. Hunter Lovins
2
You can ride the waves of change instead of being engulfed by them by exploring:
• How larger forces may make “business as usual” difficult or impossible;
• How you can take action to minimize these negative impacts; and
• How larger forces may create opportunities that can enhance the success of your
programs.
The list of trends that follows is far from a comprehensive accounting of the challenges
facing us, but it covers the primary drivers that will shape the future.
Today’s major drivers include:
1. Global Warming: Undeniable Science
2. Loss of Natural Capital
3. Strategic Resource Trends: Peak oil, water scarcities and other constraints
4. LOHAS: The Sustainability Imperative
1. Global Warming: Undeniable Science
When asked to name a global trend many people reply, “terrorism.” That is indeed a
phenomenon of modern life. But terrorism is far less likely to impact you personally
than an array of other changes sweeping the planet.
Munich Re, the world’s largest reinsurance company after assessing the total insurance
losses due to the September 11 events, stated that it is more concerned about climate
change than future terrorist risks.
As the climate changes, what had been considered “natural” disasters like flooding and
hurricanes are increasing. The changing climate is forcing cities to deal with such acute
challenges as storms, heatwaves and water shortages. It also imposes a wide array of
long-term impacts such as droughts, the spread of diseases and the demise of
historically important industries.
In December 2005, at the International Climate Conference in Montreal, Munich Re
Foundation released figures showing $200 billion in weather related losses that year,
breaking the previous record from 2004 of $145 billion.
1
In
contrast, the World Trade Center losses were less than $40
billion.2
The frequency of major natural disasters is now three times what
it was in the 1960s. CGNU, the largest insurance company in
the UK, forecasts that at the current rate of increase of the
property damages, by the year 2065, the cost of these disasters
will be higher than the entire world economic production.3
The following figure shows the evolution of the economic costs,
and insured costs of natural disasters worldwide over the past
decades.
The frequency
of natural
disasters is
now
three times
what it was in
the 1960s…
The Business Case for Climate Protection
- L. Hunter Lovins
3
Figure 14
In 2005 insurers faced claims for seven of the ten most expensive hurricanes in history.
In response, insurers like AIG, one of the world’s largest, announced that they would
give customers who reduce their carbon emissions a break on their rates.5
National Oceanic and Atmospheric Administration (NOAA) Administrator D. James
Baker says, “Our climate is warming at a faster rate than ever before recorded. Ignoring
climate change and the most recent warming patterns could be costly to the nation.
Small changes in global temperatures can lead to more extreme weather events
including, droughts, floods and hurricanes.”6
Hurricane Katrina, which in 2005
destroyed much of New Orleans, may cost insurers as much as $60 billion.7
A stable climate is of inestimable value to companies, to residents
of cities and ultimately t