With climate change negotiations stalled, focus is shifting to risk assessment and adaptation. The market is still small but poised to grow as insurers add up the rapidly rising costs of recent extreme weather events. This edition describes how engineering and planning consultants are working with public and private clients to assess, plan for and adapt to climate change, with water being the dominant resource of concern.
Overview of major market segments and drivers
In the absence of significant progress toward the global mitigation and adaptation fund envisioned at Copenhagen in December 2009, there is still significant funding from developed countries and multilateral lending agencies like the Asian Development Bank for climate risk assessment and adaptation planning in developing countries. Specialty consulting firms earn as much as 50% of their revenues from such contracts, and environmental consulting and engineering giant AECOM has performed studies for Laos and Indonesia.
In North America, Australia and Europe, water utilities are the primary client group paying for climate change risk assessments, usually in the context of asset management and long term planning. Project management work is now skewed towards the front end--analysis, assessments, mapping and planning. Design, engineering and construction will ultimately be the bulk of the market, but given the state of public treasuries and the competing priorities of governments this activity is unlikely to take off much before 2020.
Specialist Consultants Lead the Way in Climate Risk Analysis
In the face of mounting losses from extreme weather and the enduring scientific consensus that greenhouse gas concentrations in the atmosphere will keep the world on a warming trend for decades-at least-a new climate change consulting industry segment is emerging to help governments, businesses and institutions assess and model their risks from climate change. These organizations don't perform basic meteorology or climate research per se, but draw on the existing global climate models and other climate and atmospheric data to perform more customized and user-defined research and analysis. They don't plan, design and engineer infrastructure or facilities to be climate resilient like the consulting engineering (C&E) firms highlighted elsewhere in this edition-but are more and more likely to be found collaborating with C&E firms to integrate climate risk assessments in major building projects and planning engagements. They sometimes advise corporate leaders and even boards on managing climate risks, while in many cases they provide climate expertise to a corporation's C&E vendor, management consultancy or assurance firm.
Diversification is Key to Water Strategy in the Western States
Reclamation, re-use, desalination, and water management all play a role in providing sustainable water in an era of increasing vulnerability. While not a severely parched as Australia, the American West has long contented with water stress. Climate change packs a double whammy for the West, with projected declined in the crucial snowpack of the Sierra and Rockies on top of increased demand for electricity to power air conditioners-most of which is generated with hydropower or gas, coal or nuclear power plants with enormous water needs for steam and cooling. Western water system managers are devel- oping diversified portfolios of new water sources, including reclamation and reuse of wastewater, desalin ation where seawater and brackish water are available-along with options to dispose of the resulting brine-and conservation programs.
Acclimatise, Atmospheric and Environmental Research, Atkins North America, Black & Veatch, CH2M Hill, Climate Risk, Climate Risk Analysis, Climate Service Center, GHD, Golder Associates, HDR, MWH Global, RAND Corp., Stantec, Stratus Consulting.
Other firms and institutions quoted or highlighted
AECOM, Business Continuity Institute, CDM Smith, CLIMsystems, Denver Water, El Paso Water Utilities, Harris Corp., Insurance Council of Australia, Munich Re, Reinsurance Association of America, SEQWater, WateReuse Association, West Basin Municipal Water District, Worley Parsons and others.
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