Preparing your Local Economy for Climate Change

Climate-Change-&-Economic-DevelopmentMany state governments have devoted a great deal of resources over the past decade to mitigating and responding to climate change through energy and urban planning related efforts. Planners and energy experts are fluent in the language of sustainability, adaptation, resiliency, and mitigation. But ask an economic development official what climate change means to them and it’s possible that they can barely utter the word. Many in the business community have feared that climate change will simply mean more costly equipment upgrades to reduce greenhouse gas emissions. In too many communities, time is still spent debating the veracity of climate science instead of recognizing the impacts already occurring. Economic development officials have a responsibility to help businesses understand the greater implications of climate change – how they can protect themselves from the effects of climate change; how they could develop new products or services in response to climate change; and how they should prepare themselves to recover from climate-related events.

In February 2014, Rhode Island Governor Lincoln Chafee created the Rhode Island Executive Climate Change Council (EC3) to take a lead role in developing a comprehensive approach to address the potential threats from climate change the State’s environment, economy and its people. All state agencies were asked to prepare recommendations on how they could reduce greenhouse gas emissions and prepare for (and adapt to) impacts that can no longer be avoided. The state’s economic development agency, Commerce RI engaged Fourth Economy to create a framework for how they should begin to think about the intersection between climate change and economic development. We decided to examine three areas:

  • Small businesses as a whole, as there might be some impacts that are common regardless of industry,
  • Rhode Island’s key industry sectors that would have a higher likelihood of being impacted by climate change:
    • Tourism
    • Defense/Naval
    • Agriculture
    • Aquaculture
    • Ports and Marine Trades
    • Manufacturing
    • Energy Production & Distribution
  • The research and innovation being conducted at Rhode Island’s universities, as it related to potential solutions for Rhode Island’s economy to adapt to or mitigate the effects of climate change

For each area we looked at:

  • An overview of its relationship to climate change
  • Work already being done to address climate change in that area
  • Specific considerations of:
    • How the economy would need to be protected from the affects of climate change,
    • Opportunities to create new products or services in response to climate change, and
    • Measures to restore the economy after a climate-related event
  • Recommendations from both our firm and any existing reports on work that needs to be done

We found this framework to be very effective in creating an initial understanding of the possible impacts of climate change on an economy.

A few variables affected whether an industry already had done any planning around climate change:

Whether or not the industry had been impact by major climate-related events

For instance, Hurricane Sandy provided motivation for the tourism industry to begin thinking about climate change, as well as data to be able to predict possible impacts. However, though they may be engaged in conversations around energy reduction, most U.S. manufacturers have not yet felt the impact of climate change, or seen its effect on others in their industry.

The level of industry organization

The Navy has also recognized the potential impacts of climate change on national security and has already outlined objectives and action items at a national level that have provided guidance for the local defense economy. However, other industries such as agriculture are less organized or hierarchical and therefore don’t have an organization to lead the way.

The impact that the industry itself has on climate change

Though the manufacturing industry as a whole has yet to face a climate-related disaster, they do contribute greatly to our overall greenhouse gas emissions, making climate change front-of-mind as least as it relates to energy efficiency. However, industries such as aquaculture have a low impact on climate change and therefore there aren’t as many programs designed to address their needs.

Regardless of the industry’s existing exposure to issues of climate change, on the local level almost every industry required some initial level of assessment and planning. Here are some recommendations that were generally applicable to any industry:

Create an industry working group.

Some industries already had a group that could take this on, such as Rhode Island’s Defense Economy Planning Commission, while others would need to form one from scratch – restoreyoureconomy.org (funded by the Economic Development Administration and the International Economic Development Council) wrote a whitepaper for the Tourism industry that recommended how to create a Tourism Industry Taskforce for climate change. Engagement of industry in understanding challenges and devising solutions is of the utmost importance.

Conduct a risk assessment.

Some industries, such as agriculture, have developed industry-specific vulnerability and adaptive capacity assessments. Other industries could use traditional supply chain assessment tools to better understand how they may be impacted by climate change. Risk assessments should identify at-risk assets as well as existing resources.

Partner with colleges and universities.

Our understanding of the risks and opportunities associated with climate change are constantly evolving, and researchers at our local colleges and universities are often the most knowledgeable. They also often have extensive industry expertise and resources to be able to support planning and research efforts. For instance, Rhode Island’s Sea Grant program at the University of Rhode Island has been at the forefront in assisting their aquaculture industry.

Climate change is unfortunately going to continue to be a social, environmental, and economic issue for the foreseeable future. Proactively addressing it now will keep our local economies strong. Though there is a growing body of knowledge around preparing industry for climate change, that knowledge is constantly changing and still relatively dispersed across various organizations. The role of the economic development organization is critical – to engage their private sector partners, facilitate the discussion, and connect them to resources.

For more information or to discuss what is happening in your community please contact Chelsea Burket.