Tuesday, 21 September
Business strategies in a warming world
Following a disappointed Copenhagen meeting last year, the global effort towards
climate change have seemed to take a pause. The situation was not helped with
the procedural problems at the IPCC exposed by the InterAcademy Council Review
as I noted in my blog entry on 1 September.
The scientific consensus on climate change process however seems to be getting
stronger every day in spite of such shenanigans. In recognition of the fact
that physical processes follow their own logic independent of the political
games we play, some businesses have already started taking steps to mitigate
the effect of the climate change on their future viability. A lot of media space
has been given last week to Marius Kloppers' speech at the Australian British
Chamber of Commerce luncheon in Sydney on 15 September. In that address, BHP
CEO acknowledged that the world was moving towards a carbon pricing regime to
combat climate change processes. This was process following its own course in
spite of what happened in Australia. The effect of this process on Australia
would be particularly severe because of our dependence on coal. Mr Kloppers
cautioned that Australia's energy supply was particularly carbon intensive.
Over 80% of our national electricity generation comes from coal-fired power
stations. Cheap electricity thanks to the abundant availability has been one
of the main strengths of Australian economy. Moreover, coal exports have also
been the largest foreign currency earner for the country in recent decades.
These major strengths may turn into critical weaknesses very quickly if the
rest of the world decides to take action on climate change by putting a price
on carbon. It would affect the export earnings of the nation and it would affect
the competitiveness of the local economy. Mr Kloppers noted that 90 per cent
of carbon emissions in Australia coming from the electricity sector originating
from coal-fired power stations. "Reducing Australia's carbon emissions footprint
will require substantial changes in consumer behaviour," he said.
One day before Mr Kloppers' address, a much smaller company was voting on the
issue by its feet. On 16 September, one of the premier wine manufacturers of
the nation, Brown Brothers, announced that they have entered into an agreement
with Gunns Limited to purchase its Tamar Ridge Estates vineyard and winery interests.
Chief executive Ross Brown said the move south was spurred by global warming.“The
Brown Brothers Board has been carefully considering how global warming may impact
our vineyards through drought and high temperatures and recently adopted a strategy
to source grapes from cooler areas. As part of this process, we discovered Gunns
Limited in Tasmania - owners of Tamar Ridge Estates (whose brands include; Tamar
Ridge, Pirie, Devil’s Corner and Coombend) had decided to sell its vineyard
and winery investments,” he said.
“Until recently, we have always thought we were drought proof in north-east
Victoria, ” But he said higher temperatures and bushfires encourage the 120-year-old
company to source grapes from cooler areas. “We want to position ourselves to
combat global warming.” CSIRO climate change models show much of Tasmania to
be slightly warmer, but also wetter, in decades to come. The shift puts Brown
Brothers slightly ahead of the pack, according to wine writer Huon Hooke. “A
lot of people in the industry are thinking about this, but few have actually
acted on it,” Mr Hooke said.
Click here for the rest of the blog