Climate Change – What Will be The Cost? And what, if anything, can we do to stop it?


At the time of writing, thousands of delegates from more than 190 countries, including some 450 from Indonesia, have gathered at COP24 in Katowice, Poland, to produce a rulebook to make good on the promises made on reining in the effects of climate change at the Paris summit in 2015. The outlook is grim; scientists have determined that voluntary national contributions made at the Paris summit would have to be tripled if the world was to cap global warming well below 2 degrees, preferably no higher than 1.5 degrees.

The cost to the planet of global warming is going to run into trillions of dollars. It’s not just the immediate impact on those affected by unprecedented storms, droughts and wildfires but also the knock-on effect to national economies right down to individuals in terms of the cost of food, loss of jobs and quality of life.

In the local world of Bali possibly fewer people are conscious as to what is happening because it has not yet been hit by disasters of the magnitude of the recent California wildfires or the severe floods that have hit many parts of the world. Bali, like the rest of Indonesia and other countries bordering the ‘ring of fire’ periodically suffers other disasters which are not man-made. There is nothing you can do to prevent volcanic eruptions and earthquakes although much can be done to reduce their impact. On the other hand there is much that can be done to prevent climate change.

Scientific opinion is almost 100% agreed that climate change has been brought about by human actions and can only be reversed by a sustained global effort. It came as a shock therefore that the 190 countries could not agree on a final statement ‘welcoming’ the findings of an Intergovernmental Panel on Climate Change. Four countries refused to accept the wording: the United States, Russia, Saudi Arabia and Kuwait.

There is no doubt that the poorer people in the world will be the ones to suffer most from the effects of climate change. Some small nations may even disappear off the face of the earth. But the four countries that would not accept the welcoming of the report are among the richest. This tells us much about the level of moral leadership in each of those countries.

 

So is there nothing we can do to help the planet survive?

It is disheartening to see the efforts of so many dedicated and highly qualified people treated with contempt by those who put self-interest before the interests of the world and the future of our grandchildren and generations to come. If the world survives, history will not be kind to those whose greed or insecure need for popularity drove the world in the wrong direction.

But dissenting countries or individuals apart there are still many things that people of goodwill can do to help pull the earth back from the brink of extinction. Let’s examine these.

 

Changing the political scene

As individuals we may seem helpless against the forces of profit and self-interest. But through collective action, rogue governments can be overturned and replaced by more responsible ones. This is where the power of the vote comes in, backed by more involvement in discussions and campaigns that can bring about change.

Shareholders can change the culture of large corporations by forcing them at their annual meetings to adopt changes. A good example recently is that of the giant oil company Shell, which has yielded to investor pressure by setting carbon emissions targets and are to link executive pay to how quickly it generates revenue from clean energy sources. The Church of England, being a major investor, played a part in bringing about this change. As did managers of large funds, persuaded by their investors.

So while you may be just a member of a religious group or hold a savings plan or portfolio with a financial institution you can make your opinions known to your local leader or in the case of investments your adviser or the administrators or customer relations representatives with whom you come into contact. I did this myself recently when meeting with the head of an investment house managing over a billion dollars of investor assets. I told him my clients had a preference for funds and companies with strong Environmental, Social and Governance (ESG) policies. I am sure he will have passed this on. If everyone does the same the message will eventually get through to the policy makers in companies. When they see that their behaviour is going to be reflected in their bottom line they will act.

 

What else can we do as individuals?

 

Plenty; for example:

  • Write to your political representative such as member of Congress, Member of Parliament etc. To ensure your letter is read and responded to keep it polite, short and to the point. I have found this works!
  • If you are buying oil company shares or just fuel for your car, choose a company like Shell that has declared its proactive policies towards change. (But also monitor them to ensure they keep their word. Punish them if they don’t.)
  • If you have a savings plan or portfolio, enquire about funds that invest in sustainable energy. Examples include alternative energy funds and specific Climate Change funds. These funds will invest in companies that follow good ESG practices and innovative products like electric cars.
  • Install solar panels to generate your own electricity.
  • If you are a teenager or a ‘millennial’ give your elders a hard time for allowing the world to deteriorate to its present state in the name of progress. You might succeed in shocking them into action.

 

Finally, what can you do to protect yourself?

Apart from the obvious need to ensure you have a safe and secure home in a flood-free and landslide-free location, spare a moment to consider your future financial needs. There is a good chance that the repercussions of climate change, unless they are radically reversed, could leave you seriously short of money in later life. Save more and save longer; once your livelihood has gone it is too late.

 

Colin Bloodworth, Chartered Member of   the Chartered Institute for Securities and Investment (UK), has spent over 20 years in Indonesia. He is based in Jakarta but visits Bali regularly. If you have any questions on this article or related topics you can contact at : colin.bloodworth@ppi-advisory.com or +62 21 2598 5087.

You can read all past articles of Money Matters at www.BaliAdvertiser.biz

Copyright © 2018 Colin Bloodworth