FoodandWater:BasicChallengestoInterna5onalStabilityClimateChangeandFutureFoodInsecurity

PaulE.WalshFounderandManagingPrincipalG2WeatherIntelligence,LLC

Paul.Walsh@G2Weather.com

Overview

•  IntroducBon•  WeatherRiskManagementOverview•  ClimateChangePrimer•  TheNext100Years:Climate“DisrupBon”andFoodSecurity

•  TheNextFewYears:TheDebateHeatsUp•  QuesBons

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HelpingbusinessesmakemoremoneybyproacBvelyplanningfortheinfluenceofweatheronconsumersandbusiness

“Always check the weather

report before you pray for

rain.”

‐MarkTwain

ManagingWeather‐RelatedUncertainty

Threecomponents:

1.  Understandingvalueatrisk($)

2.  OperaBonalmanagement(managingtheknowable)  Real‐Bme  TacBcal  Seasonal  Verylong‐lead(decades)ScenarioPlanning

3.  Financialmanagement(hedgingtheunknowable)  WeatherderivaBvehedgingsoluBons

Trust,butVerify:OnSeasonalForecasBng,Uncertainty,andWeatherRiskManagement

•  Seasonalforecastsusefulforunderstandingclimatetrendsandanomalies

•  ForecastsbasedonlargescaleinteracBonsbetweentheoceanandatmosphere

•  Opera&onal/policydecisionsshapedbyprobabili&esandoddsviceabsolutes

•  Financialhedgingusedtooffsettheuncertaintyinherentinseasonalforecast

“Climatechangeposesclear,catastrophicthreats.Wemaynotagreeontheextent,butwecertainlycan'taffordtheriskofinac5on.”RupertMurdoch,CEO,NewsCorp

“…thethreatofcatastrophicglobalwarmingisthegreatesthoaxeverperpetratedontheAmericanpeople,”U.S.Sen.JamesM.Inhofe(R‐Okla)

PhotocourtesyofSmilingPug

ClimateChangePrimerfromthePresident’sScienceandTechnologyAdvisor

TheHockeySBck

Source:JohnHoldrenTheScienceofClimateDisrupBon

TheSmokingGun

Source:JohnHoldrenTheScienceofClimateDisrupBon

Source:JohnHoldrenTheScienceofClimateDisrupBon

IncreasedFrequencyofHeatWaves

2003 2040

WarningsofFutureFoodInsecurityWithUnprecedentedSeasonalHeat

“Thefoodcrisisof2006‐2008demonstratesthefragilenatureoffeedingtheworld’shumanpopulaBon.“

‐DavidBafsB,UniversityofWashingtonandRosamondNaylor,Stanford

HigherGrowingSeasonTemperaturesHaveDramaBcImpactsonAgricultureProducBvity

•  AvoidingaperpetualfoodcrisisundercondiBonsofglobalwarmingaseriousfuturechallenge

•  Directyieldlossesinthetropicsandsub‐tropicsesBmatedat2.5to16%forevery1°Cincreaseinseasonaltemperature

Source:DavidBafsB,UniversityofWashingtonandRosamondNaylor,Stanford

>90%ProbabilityGrowingSeasonTemperaturesinthetropicsandsubtropicsbytheendofthe21stcenturywillexceedthemostextremeseasonaltemperaturesrecordedfrom1900to2006

‐DavidBafsB,UniversityofWashingtonandRosamondNaylor,Stanford

RegionalExamples:France

•  Summer2003heatwaveinwesternEurope

•  >30Kkilled•  20%to30%decreasesinagricultureproducBon

•  Projec5onscallforthatlevelofheattobethenormbytheendofthecentury

‐DavidBafsB,UniversityofWashingtonandRosamondNaylor,Stanford

RegionalDisrupBonsHaveGlobalImplicaBons

•  CountriesrespondtoproducBonandpricevolaBlitybyrestricBngtradeorpurchasinglargequanBBesoninternaBonalmarkets

•  Futureheatstressoncropsandlivestockwilloccurinanenvironmentofrisingdemandforfoodandanimalfeedmakingmarketsmorevulnerabletopriceswings

•  Mostdamagingtopoorhouseholdsthatspendthemajorityoftheirincomesonstaplefoods

WorldBankWeatherRiskManagementEffortsinMalawi

WorldBankWeatherRiskManagementEffortsinMalawi

WorldBankWeatherRiskManagementEffortsinMalawi

WorldBankWeatherRiskManagementEffortsinMalawi

HeaBnguptheClimateChangeDebate

•  PossiblewecouldbeenteringintoaperiodofcoolingacrossthepopulatedregionsintheNorthernHemisphere

•  ThePacificDecadalOscilla5on(PDO)isapabernofPacificclimatevariabilitythatshiksphasesonatleastinter‐decadalBmescales,usuallyabout20to30years

ANewRegimeofColderWeather?

??

“Ingeneral,theclimateregimenolongerresemblestherecentwarmspellofthelast25years.ThepersistenceoftheverycoldPacificOceanofthethelastcoupleofyearshasresultedin…paKernsmoresimilartothe1950s‐1970s.Ifthis“old‐school”paKernpersistsmuchlonger,theglobaloceanswillconQnuetocooloff,andwewilllikelyheadintoacoolermulQ‐decadalclimateregime.”‐‐DrToddCrawford,WSISeasonalForecaster

Spring2009WeatherDriver:LaNinaRedux

TypicalJanuary–MarchWeatherDuringModeratetoStrongElNinoandLaNina

SummaryPoints

•  Science:>90%likely(“virtuallycertain”)climatechangewillresultinsignificantglobalfooddisrupBonsthiscentury

•  Tropicsandsub‐tropicsthemostatriskforsignificantdisrupBon;impacBngthemostvulnerablepopulaBons

•  SoluBonslikelytocomeintheformofadapBvetechnologiesandincreasinguseoffinancialhedginginstruments

•  PoliBcaldebatere:climatechangemaybeheaBngupoverthenextfewyearsifthePDOphaseshikresultsinalong‐termreturntocoolertemperatures

•  ComplicaBngthetransformaBonalandadapBvechangesneededtomanagethecomingchallenges

QuesBons?

PaulWalsh,G2WeatherIntelligenceLLC

– Paul.Walsh@G2Weather.com

– Direct:+1.917.463.4238– Mobile:+1.610.246.0623– Blog/Website:www.G2Weather.com

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