Issues for Industry and Commerce

Discussion led by Adam Rose (Penn State) and Jon Plaut (NAFTA Environmental Commission)

• Identify stakeholders
• Action plans
• Disseminate

• Direct (First-order) Climate Sensitive:
1. Long-Term
   - Forests
   - Tourism
   - Transportation
   - Infrastructure
   - Agriculture
   - Consumers
   - Fishing
   - Labor
   - Construction
2. First-Round Direct
   - Utility Industry
   - Insurance
   - Maintenance
3. Other Rounds
   - Everyone
• Short-Term Variability
  -  Many
  -  Asset-based
  -  Utility Industry

• Stakeholders
  -  Major losses
  -  Infrastructure owners
  -  Agriculture
  -  Insurance (short-term)
  -  (Employers)

• "What If" Candidates
  -  Regional implementation of emission caps (voluntary); Joint Implementation
  -  More, more intense extreme events
  -  Gradual, thus, more intense/more frequent extreme events

• Extreme cold
  -  Electrical grid off
  -  Ice storm
  -  Sold generators
  -  Even ski slopes closed
  -  Deaths/healthcare resources stressed
  -  Thousands of insurance claims
  -  Uninsured infrastructure damage
  -  Maple sugar trees
  -  Snow removal costs

• Information for Industry Decisions
  ­ Knowing more allows spreading of risks over wider range
  ­ Planning horizon: 5-10 years
  ­ For industry input to public policy
  ­ E.g. "mitigation" to buy out flood-prone structures
  ­ Hail/wind resistant building practices

• Information: physical changes, policy changes
• Costs of letting events happen vs. protective action
• Insurance capacity now high, discourages high deductibles and self insurance
• Infrastructure vulnerability in changing economy; who is to be responsible?
  - No insurance/protection (non-insured infrastructure, e.g.)
  - Self-funding for future risks
  - Insurance
• Need to quantify risk (tied to historical record)
• Industry adapts year to year
  
  
• Who needs to know?
  -  Trade associations
  -  Indirectly impacted sectors, e.g. coal
  -  Local government (through associations)
  -  Public interest groups
  -  Outdoor recreation
  -  Agriculture and other climate sensitive

• How to disseminate (& in what forms)
  -  Depends on type of info
  -  Real estate transactions
  -  Building codes
  -  Actuarial tables
  -  electricity reliability
  -  Trade journals
  -  Improve quality of public discussion

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