Thailand Flood - Street View

There has already been significant media coverage of the losses Thailand’s flooding has created for multinational corporations. While the Thai government has pledged to prevent such disasters from occurring again, this single incident may now spur investors, particularly the Japanese, to reconsider their business strategies.

As Bloomberg reports, Japanese investors may move more production to countries such as Indonesia and Vietnam in an attempt to diversify their supply chains. Lakis Polycarpou, of the Earth Institute’s Columbia Water Center, takes the implications of the Thai floods a step further. He asks if the low inventory, cost saving “just-in-time" production method, heralded by Toyota, could be in jeopardy if climate disasters are on the rise:

It goes without saying that globalized supply chains are a hallmark of the globalized economy – but what happens when climate and water risks make those supply chains less tenable? To put it another way, is there a point at which the economic risks of globalized supply chains outweigh the benefits?

One solution is the less efficient path of increasing inventory. Another strategy, as Polycarpou points out, is to utilize evolving climate data and forecasting technology to better locate facilities and safeguard operations. Government and academic research institutions are at the forefront of this research, however, technology firms, such as Cisco, exemplify private sector opportunities to monitor and evaluate global environmental and climatic conditions.

Transparency International just released its climate change Global Corruption RepSlide1ort. The extensive report is downloadable here in several languages and sections — section 5 focuses solely on strengthening accountability in adaptation.

James Lewis’ chapter, “Climate-proofing development: Corruption risks in adaptation infrastructure,” is particularly interesting to the Institute. The construction industry, which often consists of public-private collaborations, will be crucial in reducing the vulnerabilities of urban areas, transportation routes and water systems. However, Lewis points out that corruption can account for 5 - 20 percent of total construction costs. Given the long supply chains and various local, national and international governance structures involved with large infrastructure projects, corruption risks are high. For adaptation projects designed to save lives, substandard construction due to corruption is particularly worrisome.

Increased overall transparency and accountability is recommended, using tools such as Transparency International’s own Project Anti-Corruption System (PACS).

Other chapters discuss accountability in national and multi lateral projects and financing. Many challenges remain in ensuring that adaptation projects deliver on donor investments, are traceable and are distinguishable from traditional development. This last objective, proving the “additionality” of adaptation projects, will be particularly contentious moving forward — environmentalist have already accused the EU of “re-labelling" development aid as climate financing.

While many future transparency initiatives will be directed specifically toward international donor institutions and governments, understanding how and where such corruption occurs will be very useful for the private sector. Both public relations and market risks exist if customers and stakeholders challenge claims that a product or project provides adaptation benefits.

The get the “adaptation industry” up and going, business leaders will need to be clear that their actions are reducing vulnerabilities and improving lives.

We will keep you updated on our and others’ work in this field.

The Pacific Rim Coordination Center (PRCC) has just released a showcase website where they emphasize on OpenData when dealing with coordination and data driven decision.

The map above shows flooding (as black) within Thailand, as provided by the Rapid Response team at NASA. On the same showcase page more maps are available, like tsunami run-upsFloodslandslides or cyclone tracks.

As pointed out on the PRCC site, creating and having access to appropriate and relevant data is of uttermost importance. At our Institute these principles, and the increasing availability of data, leds us to create our Index solely based on freely available data. Furthermore our entire Index and methodology is in itself OpenData as well. Why? Because it lets us build on reputable data, because the transparency it provides greatly facilities engaging on candid and constructive consultations… but above all, because it just makes sense. We are about improving resilience to a reality where millions of people face challenges to their life and livelihoods. We need data driven pragmatic solutions. OpenData are the bricks to build those solutions.

Data, and maps like the ones above, are part of the solution. It allow us, everyone, to understand the situation, address current data gaps and, step by step, better measure what matters

dbenaListen to PepsiCo Senior Director of Sustainability Dan Bena’s overview of PepsiCo’s major sustainability initiatives on Nature of Business radio. PepsiCo is undertaking a variety of initiatives and partnerships strengthening adaptation in the agriculture and water sectors.

Dan Bena was kind enough to send a “shout out” to GAIN during the interview.

Dan Bena interview by chrissycoughlin

Bena also has a new book out Sustain-Ability.

The Stockholm Environment Institute’s Åsa Persson just released a working paper discussing the feasibility of creating an “adaptation marketplace.” Unlike trading in carbon credits, multiple factors hinder the progression of global transactions between those who would demand and those who would supply adaptation “credits.” Traditional carbon or pollution markets involve a politically-established cap on emissions, standardized units (metric tons of CO2 equivalent) and clear government or voluntary guidelines for monitoring and evaluation.

Persson points out that these and other conditions simply don’t exist in the adaptation arena. There is clearly no government or international mandate for adaptation. Quantifying the adaptation benefits of specific actions would be quite a chore — how does one easily value the implementation of a disaster alert system against a water purification system? Even if attempts at commensurating different adaptation projects took place, the monitoring and evaluations of such projects in diverse cultures and geographies for this purpose would likely prove prohibitively expensive.

She does leave open the possibility that budgets/costs could be used as a “rough proxy” for an adaptation finance market and argues that as international institutions increasingly push for measuring project outcomes, standardization, and thus, some baseline for a market could form. 

With the unlikely formation of a global adaptation market, from where will demand for adaptation come? It will come from awareness, particularly at the local level, of the increasing climatic risks, resource constraints and population pressures bearing down on the most vulnerable around the world. Disseminating information, conveying the importance of data and promoting economic opportunity are actions that can help bring about this awareness and are key to the Global Adaptation Institute’s work going forward.

Increasingly, the “supply” of adaptation will need to come from the private sector. Again, deciphering adaptation data and information will help businesses invest in current and anticipated demand. We think GaIn is an important first step in this direction.

The effects of a changing climate, increasing population and other global problems are mounting every year. We are not talking about the future, this is happening now. There is much more we could do to address these challenges. For that, participation by the private sector is an essential part of the solution.

Business as usual will not work, and many companies are already aware of this. The Institute seeks to partner with these early movers and work with other businesses  to guide them into resilience.

Here is a quick compilation of recent cases for Adaptation:

  • Texas cotton farmers Abandon Record Acres as worst drought in a century takes it toll.
  • Toyota is slowing or even temporarly suspending production in North America and Japan as plants relying on parts produced in flooded Thailand are closed or impaired. 
  • As Central America gets hit by more flooding, coffee and sugar operations face damages from reduced harvests and inaccessible roads.
  • Peanuts and peanut butter could see steep price increases in the coming months. The WSJ reports that Wholesale prices in the US for major brands are increasing 24 - 30 percent. 
  • A new study finds that climate change could seriously cripple the cocoa industry.

More than 50 representatives from civil society, government, academia and business attended the Global Adaptation Institute’s presentation of the Global Adaptation Index™ (“GaIn™”) in Moscow, Nov. 3, 2011.Carnegie Presentation in Moscow

The event, “Mobilizing Policymakers and the Private Sector to Build Resilience to Climate Change and Other Global Trends,” was hosted by the  Carnegie Endowment for International Peace.

Listen to the full presentation by moderator David Burwell, director of the Energy and Climate Program at the Carnegie Endowment, and Dr. Juan José Daboub, CEO of the Global Adaptation Institute, here.

Dr. Juan José Daboub was this week’s featured business leader in the EcoInnovator Blog, hosted by the Corporate Eco Forum. The posting, “Facing a New World of 7 Billion + Climate Disruption: How Prepared is Your Company?”, discusses the importance of adaptation for the private sector as the 7 billionth person entered the world last month. The EcoInnovator Blog is “by-invitation articles featuring thought leaders and practitioners at the cutting edge of corporate sustainability.”

Dr. Juan José Daboub describes the work of the Global Adaptation Institute at Climate Week NYC 2011 in New York City.