Risk Management in the Era of Climate Change

July 4, 2023

Climate change has become one of the most significant global challenges of our time, presenting risks that extend far beyond our sometimes limited view of affecting the environment only. The impact of extreme weather events right through to ecosystem disruptions, pose substantial threats to our society, economy and the overall stability of the planet.

As the Earth’s average temperature continues to rise due to human activities, it is crucial to comprehend the risks associated with climate change and the potential consequences if we fail to take swift action. In this article, we will explore the pressing risks of climate change and emphasize the importance of collective efforts to mitigate its impact. The following are a few climate change risks to consider:

  1. Rising sea levels and coastal vulnerability

As global temperatures continue to rise, melting ice caps and glaciers contribute to the steady rise in sea levels. Coastal areas and low-lying regions are particularly vulnerable to the encroaching waters, risking the displacement of up to 900 million people. A number of cities in South East Asia, New York, Miami, Lagos, Abidjan, Alexandria and Tokyo are just a few of the highly populated cities under threat. Furthermore, saltwater intrusion compromises freshwater resources, damages coastal ecosystems and intensifies the impact of storm surges. The economic toll of coastal damage and the need for massive relocation efforts make this an escalating risk that demands attention.

  1. Increasing frequency and intensity of extreme weather events

One of the most noticeable consequences of climate change is the escalation in extreme weather events. Heatwaves, droughts, hurricanes and floods have become more frequent and intense, jeopardizing the safety and infrastructure of communities worldwide. As I write this there are around 400 wildfires currently burning in Canada with approximately half deemed uncontrollable – this is a direct result of climate change with weather being warmer and drier. These events disrupt agriculture, lead to food shortages, displace populations and exacerbate social inequalities, amplifying the risk of conflicts and political instability.

  1. Economic consequences

The economic repercussions of climate change are vast and far-reaching. The increased frequency and severity of natural disasters result in substantial infrastructure damage, loss of agricultural productivity and reduced tourism revenues. Additionally, businesses face supply chain disruptions, increased insurance costs and reduced labour productivity due to extreme weather events. The World Bank estimates that, without risk mitigation efforts, climate change could push over 100 million people into poverty by 2030, hindering sustainable development.

  1. Impact on public health capabilities

Climate change poses a significant threat to public health, both directly and indirectly. Rising temperatures contribute to the spread of infectious diseases, such as malaria and dengue fever, while extreme weather events can cause injuries, illnesses and the displacement of vulnerable populations. Additionally, changes in rainfall patterns and increased heatwaves can adversely affect agriculture and food security, potentially leading to malnutrition and related health issues. Addressing climate change is therefore essential for safeguarding human lives.

  1. Water scarcity

I have kept the most important climate change risk until last. Water risks seem to be the most commonly associated with climate change – there are a number of contributing factors such as:

  1. Food insecurity: Water scarcity directly affects agricultural productivity, as irrigation is a major consumer of freshwater resources. Limited water can lead to crop failures, reduced yields and increased food prices, resulting in food insecurity and malnutrition.
  2. Deteriorating ecosystems: Disruption of natural ecosystems and the balance of aquatic environments. Reduced water flows in rivers, lakes and wetlands can harm aquatic ecosystems, endangering fish populations and affecting biodiversity. Additionally, the depletion of groundwater reserves can lead to land subsidence and soil degradation.
  3. Migration and displacement: Scarcity of water can drive population displacement as people are forced to leave their homes in search of better water resources and livelihood opportunities. This can lead to increased migration within countries or across borders, putting additional strain on urban areas and creating economic challenges.
  4. Economic implications: Industries dependent on water, such as manufacturing, energy production and tourism may face operational challenges and increased costs. Inadequate water supply can also impact employment and income generation.

There is a growing thesis that water scarcity will increase the chances of violent conflict as access to water dries up. You may have seen some headlines stating that major conflicts in the 21st century will be fought over water. Hopefully this will not happen, but we do have to stop taking water for granted and start conserving as much as possible.

My daughter recently prepared a speech for a school project on climate change and the paragraphs below have been extracted from the speech she made.

On a more positive note, South Africa is putting in a fair amount of effort to tackle climate change. In 2011, the South African Government released the Renewable Energy Independent Power Producer Procurement Program (REIPPPP). This program aims to increase the use of renewable energy in South Africa by making use of Independent Power Producers, or IPPs. Before everyone sighs thinking about the state of power production in SA, at least this program is in place and in the last couple of months has seen some significant progress being made.

Our government has played its part in reducing global warming through the implementation of the Carbon Tax Act 15 of 2019. This act forces companies, municipalities and any operation, no matter the size to pay the equivalent tax for the amount of Carbon dioxide that they release into the atmosphere. This encourages people to cut down on their greenhouse gas emissions by making air pollution a costly conduct.

Lastly, a Presidential Climate Commission was established in September of 2020 with the aim of transitioning South Africa towards a low carbon emission society. As stated by the Presidential Climate Commission’s first annual review, their goal for 2030 was pivotal in receiving financing of $8.5 billion from the Just Energy Transition partnership. The aim of this partnership is to increase the use of renewable energy, electrical vehicles and green hydrogen in South Africa.

Warrick Asher and Samantha Asher

June 2023