Impact on Business: Climate Change
By James E. Houck
It has been predicted that the observable impacts of climate change will be much greater over the long run than over the next few decades. Over the coming 25 or 30 years, scientists say, the climate is likely to resemble that of today, although gradually getting warmer. Rainfall will be heavier in many parts of the world, but the periods between rains will most likely grow hotter and therefore drier.
The number of hurricanes and typhoons may actually fall, but the ones that do occur will draw energy from a warmer ocean, and therefore may be more intense, on average, than those of the past. Coastal flooding will grow more frequent and damaging. However, these changes will be slow, with “fits and starts” and with some years being more or less “normal.”
Even with the relative slowness of climate change in human terms, people’s perceptions are changing fast. The Internet has made us all more aware of weather disasters in distant places. On social media, people have a tendency to attribute virtually any disaster to climate change, but in many cases there is no scientific evidence to support it. Government regulations and international agreements are topical issues felt by businesses and seen on the nightly news.
While scientists have called global warming “rapid,” changes of less than a couple of degrees Fahrenheit in the last several decades have probably not caused much of a change in the tangible need for hearth, patio and barbecue products. Particularly when both the temporal and spatial variability in temperatures are taken into consideration, i.e., there still have been very cold days and very hot days every year, and at least at some locations. Many potential consumers are growing fatigued and skeptical by apocalyptic predictions of unbearably hot summers and endless storms.
|A chart of the rise in global temperatures as measured by various prestigious organizations is the ionic image of climate change. The adjective “rapid” is used by most scientists describing the trend. It certainly is rapid in the geological sense, but most people would be hard pressed to have noticed or remembered the difference of less than one degree centigrade since 1980, particularly when the short term variability is factored in.|
|Is Climate Change Real? – Most Scientists Think So. Key scientific associations and societies have made statements supporting the veracity of man-made climate change. They include the American Meteorological Society, U.S. National Academy of Sciences, American Chemical Society, American Association for the Advancement of Science, American Geophysical Union, American Medical Association, American Physical Society, The Geological Society of America, U.S. Global Change Research Program, and the Intergovernmental Panel on Climate Change.|
This is not to say the impact of climate change has not yet been felt. It has. On the average, the magnitude of the heating demand has declined in the U.S. and the need for cooling has increased – but almost an imperceptible amount as it impacts product design or need. The average length of the “warm season” for the U.S. (as measured by the time between the last frost in the spring and the first frost in the fall) has increased by almost 10 days since 1980.
The season for patio and barbecue product sales is now slightly longer and starts slightly earlier, and conversely the season for hearth sales is now slightly shorter and starts slightly later. The keyword is “slightly” and it probably has not had much of a marketing impact.
To be sure, droughts with the associated increase in wildfires, as well as coastal and river flooding due to severe storms have seemingly become more frequent, but they have always occurred episodically and the increase in their periodicity, other than perhaps at some limited specific locations, has not changed the use of hearth, patio or barbecue products.
Unlike the tangible manifestations of climate change that appear to be slow and inexorable, consumer perception and governmental regulations are more variable and volatile. Interest in and attention to climate change is often overshadowed by other world events and politics. On the one hand, indecision and indifference have prevailed among many consumers, whereas on the other hand there is a core group of consumers that focuses on Green issues and regularly make climate-friendly purchasing choices. (See
“Consumers and Climate Change,” December 2015, Hearth & Home.)
A majority of Americans in 2014 surveys by Pew Research and Gallup acknowledged climate change was happening, but for many it was near the bottom of pressing issues, far behind jobs, the economy and health care.
Climate change also has become a partisan issue – a cause for many conservatives who fear government overreach. Many other politicians and policymakers have explained their opposition to action on climate change as an effort to protect the economy and jobs. Unquestionably, climate-related regulations will drive up the cost of energy.
Powerful lobbies, such as fossil fuel groups, the U. S. Chamber of Commerce, and the National Association of Manufacturers have worked against government regulations that are designed to mitigate climate change. An extreme version of climate denial-ism is the claim that scientists are engaged in a worldwide hoax. Certainly, many federal, state, and local regulations focused at climate change are not well thought out, are costly to businesses and the economy, and are the product of the emotional need to “do something.”
With the election of Donald Trump it has been said that 2017 may be the most unpredictable year for both environmental regulations and businesses that are impacted by them. On Nov. 22, 2016, Trump stated, “I will cancel job-killing restrictions on the production of American energy, including shale energy and clean coal, creating many millions of high-paying jobs.” Trump also pledged that in his first 100 days in office he would abolish a host of regulations that would stimulate domestic energy production.
|The average number of heating and cooling degree-days per year across the contiguous 48 states, 1895–2015. A slow but steady trend in the warming during both the heating season and the cooling season are apparent, with the cooling season being an imperfect surrogate for the time of year patios and barbecues would be in most use. The key word here is “slow.”|
Trump’s pick of Oklahoma Attorney General Scott Pruitt to run the Environmental Protection Agency confirms there will be a more conservative approach on climate change. Pruitt, who has written that the debate on climate change is “far from settled,” joined a coalition of state attorneys general suing over the agency’s Clean Power Plan, the principal Obama-era policy aimed at reducing U.S. greenhouse gas emissions from the electricity sector.
He has also sued, with fellow state attorneys general, over the EPA’s recently announced regulations seeking to curtail the emissions of methane, a powerful greenhouse gas, from the oil and gas sector. Trump’s transition team called Pruitt “an expert in Constitutional law” and said he “brings a deep understanding of the impact of regulations on both the environment and the economy.”
Beyond U.S. regulations aimed at climate change there have been the much touted international agreements. The Kyoto Protocol and the 2015 Paris Climate Accord that was signed by 196 countries have, if nothing else, raised the public awareness of climate change and arguably swayed some consumers’ purchasing decisions in the direction of more environmentally friendly products.
However, the U.S.’s role in the Paris Accord with its regulatory impacts on business remains in question. When asked about the link between human activity and global warming, Trump said: “I think there is some connectivity. Some, something. It depends on how much.” He added that he was thinking about how the issue “will cost our companies.”
|Important to the hearth, patio and barbecue businesses as indicated by the date of frosts is the lengthening of the duration of milder weather when patio and barbecue products may be in use, and shortening of the duration of colder weather when hearth products are needed.
While still small to date, this change is less subtle than average temperatures and may in practice be more important to hearth, patio and barbecue businesses than average temperatures. Patio and barbecue sales to consumers may progressively start earlier and last longer; in contrast, sales of hearth products may start later in the year and be shorter.
Trump’s partial acceptance of the overwhelming scientific view that burning fossil fuels is changing the climate, along with his view on the possible American involvement in the Paris deal, are departures from the position he took during the presidential campaign, when he said he would cancel the Paris climate agreement, cut all money spent on climate change aid to developing nations, and slash clean energy funding.
There is a possible indirect ramification for hearth, patio, and barbecue businesses should the U.S. not be involved with the Paris agreement or be involved at an attenuated role. Many products and components are manufactured in China. Some businesses selling in North America are headquartered or have products manufactured in Europe.
|Residences along the gently sloping eastern seaboard and Gulf Coast will become more prone to flooding due to the combined effect of higher sea levels and storm surges from the predicted more powerful hurricanes. Damage to patios and decks along with the accessories they contain would be reasonably expected. The construction of new homes, investment in the remodeling of existing homes, and the construction of Outdoor Rooms likely will be impacted.|
China is responsible for 20% of the total global greenhouse gas emissions. The European Union is responsible for 12% and has been very progressive with climate change initiatives. (For comparison, the U.S. is responsible for 18%.) Should China choose to fully participate and the U.S. not, the cost benefit of manufacturing in China would conceivably be reduced. Similarly, products from Europe might increase in cost relative to the U.S.
While the actual physical impact of climate change probably has not yet caused much of a change in the complexion of hearth, patio or barbecue products, and while consumer perceptions span the spectrum often influenced by a particular extreme weather event or newsworthy governmental action, the long-term prediction for climate change is pretty clear and stark.
|Homes on a North Carolina barrier island owned by affluent residents represent a marketplace for high-end hearth, patio and barbecue products and are in the “bullseye” for future flooding caused by climate change.|
|Infiltration of sea water into residential areas due to the rise in sea level exacerbated by high tides is already happening and will get worse. It doesn’t take much imagination to understand the negative effect this might have on the use of patios and outdoor barbecues.|
|Drought in the West (as of Jan. 3, 2017). Wildfires and house fires made more prevalent by drought conditions can stifle the use of outdoor fireplaces, fire pits, chimineas, grills and even indoor fireplaces. Both public concern and regulatory restrictions can come into play. Interestingly, and consistent with the extreme and episodic nature of weather associated with climate change, mid-January storms that occurred after the preparation of the above map significantly ameliorated the five-year California drought.|
In the past five years alone in the U.S., storms, floods, droughts, and wildfires have caused over $250 billion in damages. As noted, climate change predictions suggest that the frequency and severity of these extreme events will increase. The litany of environmental problems that climate change is predicted to cause in the long term include:
- Increase in Average Surface Temperature
- Increase in the Number of High and Low Temperature Events
- Increase in Total Average Precipitation
- Increase in Short-Term Heavy Precipitation Events
- Increase in River Flooding
- Increase in Tropical Storms
- Increase in Localized Drought
- Change in Ocean Currents
- Increase in Sea Surface Temperature
- Rise in Sea Level
- Increase in Coastal Flooding
- Increase in Ocean Acidity
- Loss of Arctic Ice
- Shrinking of Glaciers
- Earlier Thawing of Lake Ice
- Less Snowfall (more precipitation will fall as rain)
- Decrease in Snow Cover
- Decrease in Snowpack
- Increase in Heat Related Deaths and Illness
- Decrease in Average Heating Degree Days
- Increase in Average Cooling Degree Days
- Increase in Diseases Carried by Insects (insect range increased)
- Increase in Growing Season
- Increase in Human Allergies
- Increase in Wildfires
- Change in Stream/River Flows
- Change in Stream/River Temperatures
- Change in Lake Water Levels
- Change in Bird Wintering Distribution
- Change in Marine Species Distribution
- Earlier Leaf and Bloom Date
A novel could be written on the direct and indirect impact to hearth, patio, and barbecue businesses caused by this “simplified” list of 31 climate change predictions. Some are quite obvious, such as the reduction in heating degree days. Others are less obvious, such as the retreat of Arctic sea ice making the shipment of Chinese goods via the Northwest Passage to Europe and the East Coast of the United States faster and less costly, or the change in river flows and temperatures reducing the availability of Northwest salmon for barbecuing.
|How well different types of extreme events can be attributed to climate change. (Harvard University report).|
|The percentage change in population across the United States from 1970 to 2008. In recent decades, population has grown rapidly in coastal areas subject to increased flooding and western regions subject to drought.|
Exacerbating the litany of long-term climate change predictions for the United States is the fact that population growth is most rapid in the coastal areas where flooding is more likely to occur and in the West that has been predicted to suffer more droughts.
The effect of climate change on the hearth, patio and barbecue industries is arguably more complex than the subject of climate change itself. As time unfolds there will be more and more clarity on the potential voracity of climate change and how it may impact the viability, in the real sense, of hearth, patio and barbecue products.
Also as time unfolds and exceptional weather events occur, consumer reaction to and perception of climate change may better be gauged. In addition, while some may prophesize, history illustrates that the predictions of future governmental climate change regulations, agreements, and policies will not be accurate, particularly in light of the current volatility in U.S. politics.
Still it would be prudent for business owners, and it would be consistent with the fiduciary duty of corporate officers, to follow developments in climate change science, public opinions, and governmental actions. Climate change will affect the hearth, patio, and barbecue industries’ bottom line.
|Catastrophic climate disasters are becoming more common. Severe storms and flooding play a big role. (CPI adjusted = consumer price index adjusted for inflation)|
Data for this article has been obtained primarily from the U.S. Environmental Protection Agency, National Aeronautics and Space Administration, PEW Research Center, Gallup, The New York Times, The National Drought Mitigation Center, and Harvard University.
About the Author
Dr. James E. Houck has been involved in environmental research and the hearth industry for over 30 years. He currently is an independent consultant and can be reached at: firstname.lastname@example.org.