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This Way Forward

With temperature rises seemingly inevitable, it's time to think beyond combating climate change. By government fiat or market force, humans will adapt, and that will bring opportunities as well as challenges.

By William Underhill

Newsweek International

April 16, 2007 issue - Something weird is happening to the world's weather. Ski slopes in central Japan and the Alps were still green weeks after the start of the season. Giant hornets, once found only in the Far East, are now swarming in a warmer France. In the Australian outback, the worst drought on record is driving wild camels crazy with thirst. The global thermostat is malfunctioning. Everywhere nature is unsettled and, most likely, mankind deserves much of the blame.

Those are the generally agreed facts. Global warming is now a reality that even die-hard skeptics struggle to dispute. The authoritative Intergovernmental Panel on Climate Change predicts temperatures will rise 4 degrees Celsius or more by the end of the century. Clearly, prompt action to limit CO2 emissions is needed. But it's just as clear that, whatever we do, temperatures will continue to climb—and that even a modest increase will tilt the world's economic and political balance. Put simply, in the short term there will be winners and losers from climate change.

Fairly or not, the tilt is destined to favor the countries of the rich North, to the detriment of the poorer South. Within a few decades or so, a balmy Greenland may again deserve its name.
Russia, long a half-frozen terra incognita, will find its interior frontiers thrown wide open as the Siberian tundra turns to fertile prairie. Scorching heat and drought may devastate agriculture along the equator. The rain forests of the Amazon could be savanna by 2100, according to Brazilian researchers. The vast Sahara will grow ever larger. But America and other rich nations will be left relatively unscathed, because they are removed from equatorial regions that will be hardest hit, and wealthy enough to adapt.

With further warming seemingly inevitable, the farsighted are already thinking beyond combating climate change. By government fiat or market force, humans will adapt, and that will bring opportunities as well as challenges. That point may be hard to appreciate amid the increasingly polarized debate, mostly focused on trying to prevent the worst case scenarios of biblical hurricanes and floods. In the new mood of ecopuritanism, the size of a politician's carbon footprint can help determine his prospects at the polls. Tony Blair is castigated for flying to the Caribbean for his holidays, Al Gore for his home heating bills.

Ignore the clamor, though, and you find surprises—some in stark contrast to the ambient gloom. Begin with the un-PC apostasy that rising temperatures might even be good news for some. Extreme dissidents point out that previous warm spells, notably in the Middle Ages, are associated with prosperity and the advance of civilization. When the weather changes, so do habits. Says Thomas Gale Moore of the Hoover Institution at Stanford University in California: "It's absurd to believe that we live in the best of all possible times and that we can't adjust."
Or even prosper. Cold is a more deadly killer than heat. According to Moore, a 2.5 degree Celsius rise could reduce the annual death toll in the United States by 40,000 a year. Nations around the Arctic rim anticipate tapping natural resources now covered by polar ice as new trade routes cross the top of the world. Location is all. A ranking of most vulnerable countries produced by Columbia University in New York puts Sierra Leone and Bangladesh at the top, exposed by their poverty and location, Norway and Finland at the bottom. The former may be battered by drought and disease, while the latter may benefit from balmier temperatures—whether in terms of a longer agricultural growing season, say, or an upsurge in tourism. And though many scientists warn of the northward march of scary tropical diseases, that's not inevitable. Good sanitation and public health means often sweltering Singapore is free of malaria. The problem is poverty, not climate.

So why do such views go largely unmentioned? The trouble is, says Moore, that to oppose the prevailing ultrapessimism these days smacks of heresy. "In more-religious times we used to say that we were sinning against God, now we say that we are sinning against nature. Moderate voices are being drowned out."

Unheard or not, even some of the glummer forecasts accept the fact that our prospects are mixed—shades of gray, not uniform black. Consider a passage from last year's report on global warming from British economist Nicholas Stern, now a standard text for environmentalists and politicians. "In higher latitude regions, such as Canada, Russia and Scandinavia, climate change may lead to net benefits through higher agricultural yields, lower winter mortality, lower heating costs and a possible boost in tourism." In time, the crowds that throng the beaches of Spain could be holidaying on the Baltic.

And most countries or regions will have some control over their destinies if they adapt in time. A report earlier this year from the Organization for Economic Cooperation and Development found that a 2 degree Celsius rise would threaten the viability of some 200 Alpine ski resorts, around a third of the total. Result: many are now looking at new futures as mountain spas. In Davos recently, the proprietor of the restaurant Gentiana, joking about the lack of snow, speculated about planting vineyards. "We will be the new Tuscany!" Or, as Stern put it, "All economies undergo continuous structural change: the most successful economies are those that have the flexibility and dynamism to embrace the change."

Of course, that's little comfort to the developing world, which lacks resources to make the adjustment. In some regions, only a modest rise in temperatures will cause farm output to plummet. The melting of the Himalayan glaciers will lead first to more flooding in the plains of India and Bangladesh, then to water shortages. Experts fret about a failure of the monsoon, potentially driving hundreds of millions into starvation. Rising sea levels will compound the problem. Indonesia has warned that 2,000 of the 18,000 islands that make up the country's archipelago could be submerged. Demographers talk of mass migrations as the poorest flee drought and poverty, yet in rich but aging nations facing future labor shortages (Italy, Japan) this could be a surprise boon.

Only concerted international action can help to minimize the damage. Climate change will figure high on the agenda of this summer's meeting of the G8, the world's leading industrialized nations. Politicians are beginning to respond to the popular concern (Americans now say climate change is as big a threat as terror) but the free market is way out front. Smart businesses are already moving to adapt to the new world, even to make money from it. The U.S. seed giant Monsanto hopes to offer a drought-resistant strain of cotton by 2015. Mighty General Electric is betting its future on energy-efficient appliances. Already the City of London is becoming the global center of a burgeoning trade in international carbon credits. Nuclear power is making a worldwide comeback, in part because it emits no CO2. "Who makes money in a gold rush? It's the people who make the picks and the shovels," says Steven Mahon of Low Carbon Accelerator, a London venture-capital outfit specializing in small ecobusinesses.

Indeed, the bankers have set out the new orthodoxy. "Global warming is likely to prove one of those tectonic forces—like globalization or the aging of populations that gradually but powerfully changes the economic landscape," says John Llewellyn, senior economic-policy adviser at Lehman Brothers. "Firms that recognize the challenge early will create opportunities for themselves and thereby prosper." It's time to face reality: climate change is coming, we better get ready. In the following pages, NEWSWEEK examines the regions, countries, companies and people who are best prepared to adapt to, even profit from, a warming world.
With Jonathan Adams in Taipei and Kenzie Burchell in London

© 2007 Newsweek, Inc.