Too hot for comfortIn southern Nepal, temperatures of above 40 degrees Celsius are becoming normal.
The National Aeronautics and Space Administration states that the average surface temperature has risen about 1.62 degrees Fahrenheit. The oceans have absorbed much of the increased heat, and they have warmed up by 0.302 degree Fahrenheit since 1969. The glaciers are retreating from the Alps, Andes, Rockies, Alaska, Africa and our own Himalaya, and the global sea level has increased by 8 inches in the previous century. These facts are enough to prove that climate change is actually happening.
Be it under SWOT Analysis, or PESTEL Analysis, any business firm will certainly look over the environmental aspect for making the analysis. Around 25 percent of Walmart stores are powered by renewals, and they have claimed that they have saved $1 billion in 10 years through the same.
There lies an opportunity in every problem. Global warming may seem like a boon for businesses like air conditioner and cooler. Demand for cold drinks will gradually rise; and the juice business will expand. But the case will not be that easy because the supply chain of the air conditioner manufacturer will be affected. Coca-Cola stated that the supply chain is directly related with sugar cane, sugar beet
and citrus, and hence increased droughts will affect the system as a whole. The dream of a juice business will be successful only in the presence of fruits. A businessman who thinks that climate change will in no way affect their business must be illogical.
The first and foremost economic change that will trouble business firms will be the increased investment in emission control systems. As the legal setup will be designed in a way that will discourage polluting firms, companies will have to invest pretty much in those equipment which will rather minimise pollution in the end. The government will certainly have come up with policies for creating restrictions on the level of greenhouse gases by that particular period of time.
With rising temperatures, demand for electricity will rise; and the higher the demand, the price will hike up in a similar manner. Increased electricity costs will hamper the entire flow of the transportation mechanism, creating disruption in the entire supply chain structure as a whole. The changes in climate will decrease the level of rainfall, creating less fertile land, which will directly impact the food habits of any individual. There is a high possibility that the prediction of insurance companies will not go as per their estimation, creating huge ups and downs in the insurance industry as a whole. Demand for winter products will fall. Increasing temperatures will create frustration and decrease productivity within the organisation too. A potential problem that any business may face is an increase in injury and death. Absenteeism and leave requests will increase. A scarcity of pure water in the health industry will create further trouble.
Two-thirds of the world’s largest cities which are located in coastal areas will be severally affected. There are more than 750 million people living there who will have to migrate to cooler places. In countries like Bangladesh, the Netherlands, Maldives and Philippines, the people will be forced to relocate themselves. In the southern belt of Nepal, where temperatures of above 40 degrees Celsius are becoming normal, people will gradually shift to the northern region. Cooler places will gradually turn out to be expensive. Production of food will be a problem then. Irrigation friendly lands will be scarce. Crops grown under high carbon dioxide will yield less nutrients like zinc, iron and protein, creating an impact on human health risks as a whole.
The prediction of global warming resulting in extreme weather events creating property and infrastructure loss has been coming true on a wider scale. Impacts on inflation and GDP will be through increased land cost and lesser availability. Similarly, it will push insurance costs higher. Research has indicated that a rise of 4 degrees will decrease economic output by 50 percent. Since business will directly affect natural beauty, the tourism industry cannot stay aloof. Be it the cement industry, agriculture business, carbon industry or the supply chain as whole, global warming will affect normal procedure for sure. Fair weather friends will be identified.
The impact of global warming will be higher in the developing nations than the developed ones. And the sad thing is that the developing nations will have no role but to bear the consequences. By the next 20 years, reputable firms will not be those who generate high profits, or those who have been satisfying customers or employees. Their reputation and goodwill will be directly dependent upon their contribution towards the environment. Global warming is happening, it is real; and it will not rain, but pour. This is the time to become prepared for the consequences.
Regmi is a banker.