Things are hotting up
Agriculture, industries and insurance affected the most
DISASTER AWAITS South Africa and the rest of the world if even only a fraction of various disturbing climate forecasts turn out to be true. That will affect not only food production but also profits from industries, the mines and even insurers. That implies investors and economists won’t be able to escape the direct and indirect consequences of climate change (caused largely by global warming and greenhouse gases) and will have to discount the situation on an ongoing basis.
Statistics from established institutions, including the United Nations, US space agency Nasa and the International Food and Agricultural Organisation, confirm the process has passed the point of no return: 1998 was the hottest year on record; 70 large natural disasters in the Nineties resulted in losses of at least US$100bn; and the major natural disasters of the Nineties were 141,4% more numerous than the 29 of the Eighties and 337,5% more than only 16 severe ones in the Seventies.
SA’s most serious problem due to climate changes, the 2003 UN report shows, will be a serious shortage of water (SA is the world’s 31st driest country). To date, according to a recent HSRC survey, South Africans haven’t paid much attention to the consequences of climate change. Though 72% of the respondents were fairly well informed about the causes of climate change, and with 44% now more concerned about it than a year ago, SA’s level of concern is lower than that of several other countries, including India, Brazil, Russia and China.
According to earlier predictions, SA could start experiencing a scarcity of water as early as 2015, with serious shortages from 2020.
WWF Sanlam Living Waters Partnership head Deon Nel warns that due to water shortages, it’s very likely SA will have to start preparing itself for water shedding if guaranteed water provision isn’t given urgent attention. Says Nel: “Currently, more than 98% of the country’s available water has been allocated. With limited options for new dams, the increasing demand for water as a result of economic growth and concerns about
and business are now undoubtedly taking more notice of the consequences of a water shortage.
climate change, we’ll now have to think very innovatively about the management of our water supplies.”
Companies whose turnover and profits are directly dependent on available water, such as SA Breweries, have already become involved in WWF and Government initiatives to ward off a possible water disaster. A fully quantitative, water-neutral scheme – probably the world’s first – was introduced at SAB’s Newlands brewery a few days ago. Water neutrality is a scheme that allows participants, including SAB, to justify their water consumption by becoming involved in a three-step process to limit and then supplement water consumption, and then obtaining “credits” for that in the process.
Nel says involvement in eradicating invasive plants, part of SA’s Working for Water project, will dramatically improve available water. “SA loses more than 3 300m kilolitres of water every year – the equivalent of 26 large dams – as a result of those plants. Companies can reduce that drastically by their involvement.”
The mining sector also realises the problems it will face if water rationing is introduced. That led directly to the establishment of a chair for business and climate change (ECBCC) by Exxaro, in conjunction with Unisa’s Centre for Corporate Citizenship, a few months ago.
ECBCC programme manager Hennie Stoffberg says the purpose of the chair is to aid SA’s business community in adapting to the consequences of climate change as soon as possible and to manage it properly.
The effect on SA’s insurance industry is also giving cause for concern. Santam consequently recently launched a series of environmental initiatives in conjunction with Government and business partners for new research into climate change, to better understand the phenomenon and to determine and manage the risks.
According to Santam’s manager for integrated sustainability, Ray-Ann Sedres, it’s already approved a business plan and appointed a task team to manage the consequences of climate change.
As if all that wasn’t enough, the Wildlife Conservation Society has just warned that a “deadly dozen” diseases – including cholera, bird flu, sleeping sickness, yellow fever and TB – will flourish as a result of climate change. The International Panel on Climate Change also warns the expected increases in temperature will make icebergs melt quicker, causing flooding of coastal settlements and the extermination of animals, such as polar bears. Hardly much to look forward to.