Climate Change is a Risk Factor
APEGGA Pros Must Consider


Much has been written recently in The PEGG about climate change science and the impact that climate change may or may not be having on our weather systems. Regardless of the fact or fancy of climate change, however, one thing is clear: greenhouse gas emissions are a serious risk factor that businesses must confront if they hope to remain competitive.

The issue is with us because our stakeholders, governments, customers and shareholders now perceive greenhouse gas emissions as yet one more thing that must be managed. The issue is with us whether or not the Kyoto Protocol is ratified and, in some respects, the issue is further complicated by the potential failure of the treaty.

Managing risk is familiar to engineers and geoscientists. For every project decision, we assess risk factors and arrive at personal and corporate risk tolerances that guide our investment strategies. Greenhouse gas emissions are just one such factor.

When viewed in this way the issue becomes much less daunting and can be managed using familiar techniques.

Put Aside the Politics
One of the first steps in addressing climate change risk is to move away from the issue’s overarching politics. I commonly have articles forwarded to me that attempt to undermine the conclusions of the International Panel on Climate Change scientists or, conversely, that attempt to attack the motives and credibility of scientists who oppose the IPCC.

The deluge of information has become an industry in itself. It is human nature to enjoy reading articles that we agree with and to fume at those that are at odds with our opinion. Unfortunately, this does very little to help engineering and geoscience practitioners manage risk within their organizations.

Most of us are not climate experts. It is presumptuous to assume that our scientific and engineering training has prepared us to function productively in this very specialized area of scientific research. In the same way, we would be concerned if a climate scientist attempted to design a pressure vessel.

Engineers and geoscientists can, and do, participate in these discussions as informed laymen. But we must leave the proof of the science in the hands of those professionals trained in this very specialized and esoteric discipline.

Short-Term, Long-Term
Ultimately, one of our most important jobs will be to manage the consequences of climate change. In the short term, our job is to manage the impact of greenhouse gas emission policy on our employers and clients.

Greenhouse gas risk mitigation is based on numbers. What is the annual greenhouse gas emission? How does this compare to emissions in specified baseline years such as 1990, 1995 or 2000? What is the growth forecast and how do emissions grow with the forecast?

It is impossible to manage the risk without full knowledge of emissions and the implications of business development plans on emissions growth. Engineers and geoscientists are uniquely qualified to evaluate these numbers and their sensitivities.

At present, it is unclear who will be the primary regulator of greenhouse gas emissions. However, it is very clear that within the next few years they will be regulated.

A key element in risk management is an awareness of the ebb and flow of the debate about who will ultimately regulate greenhouse gas emissions in your jurisdiction. It is common to work risk management scenarios for each possible policy regime to understand the effort required to comply.

There are a myriad of approaches to mitigating greenhouse gas emissions. The most fundamental of these start right at home.

It is important to know where energy efficiency can be improved within an operation and to understand the economics of those improvements. Are there improvements that are marginally non-economic that would become economic under the various policy scenarios that are evolving?

Other approaches can also be contemplated, including investment in new projects that reduce emissions outside of the operation, emissions trading, carbon sequestration, or renewable energy development.

Based on analysis of emissions, the possible regulatory regimes and the approaches that can be taken to reduce emissions, the practitioner is positioned to propose a prudent course of action. Some projects may not count under some of the proposed policy scenarios. Regulatory uncertainty is significant and can contribute considerably to the level of financial risk associated with climate change project investment. However, it is wise to know what can be done and, where practical, to undertake those projects that make sense today.

Investment Equals Advocacy
In this area of practice, investment can be viewed as advocacy. Each completed project becomes a precedent. This informs the debate and has significant influence on the direction taken by policy-makers.

Depending on the nature of your professional practice, these issues may have no immediate impact on you. Smaller companies may slip under the radar screen of proposed regulation, which is currently focused on large-scale emitters.

Greenhouse gas emissions are directly linked to energy consumption and to the contained energy in all of the products and services that we consume. Ultimately, the effects will trickle down into our homes and our businesses.
It is therefore prudent to be aware of the implications and to plan how we – as individuals, homeowners and professionals – will modify our practices to accommodate the effects.

Climate change is one of the most pervasive influences on our society that we are likely to face over the next century. Engineers and geoscientists have a central role to play in managing this issue.

Joel R. Nodelman, P.Eng., is president and CEO of Nodelcorp Consulting Inc., based in St. Albert.

Editor’s Note: This article is the third in a series presented by APEGGA’s Environment Committee regarding the role of professional members in sustainability, climate change impact and adaptation. The committee provides professional direction and leadership in environmental issues for members. The articles – addressing industry-specific initiatives, international initiatives and regulatory considerations – are meant to raise the level of awareness and generate discussion. The opinions expressed by the author are his own and not necessarily those of APEGGA.

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