7.1.1 Key issues

Climate change and sustainable development are linked through their interactions in industries, human settlements and society. Many of the forces shaping carbon emissions - such as economic growth, technological transformations, demographic shifts, lifestyles and governance structures - also underlie diverse pathways of development, explaining in part why industrialised countries account for the highest share of carbon emissions. The same drivers are also related to climate-change impacts, explaining in part why some regions and sectors, especially from the developing world, are more vulnerable to climate change than others because they lack financial, institutional and infrastructural capacities to cope with the associated stresses (O'Brien and Leichenko, 2003). Settlements and industry are often key focal points for linkages between mitigation and adaptation; for instance, efficient buildings can help in adapting to changing climate by providing protection against warming, while this adaptation may involve increased or decreased energy use and greenhouse gas emissions associated with cooling based on electricity (Hough, 2004); and society is a key to responses based on democratic processes of government.

Industries, settlements and human society are accustomed to variability in environmental conditions, and in many ways they have become resilient to it when it is a part of their normal experience. Environmental changes that are more extreme or persistent than that experience, however, can lead to vulnerabilities, especially if the changes are not foreseen and/or if capacities for adaptation are limited; and the IPCC Third Assessment Report (IPCC, 2001) reported that climate change would increase the magnitude and frequency of weather extremes.

The central issues for industry, settlement and society are whether climate-change impacts are likely to require responses that go beyond normal adaptations to varying conditions, if so, for whom, and under what conditions responses are likely to be sufficient to avoid serious effects on people and the sustainability of their ways of life. Recent experiences such as Hurricane Katrina suggest that these issues are salient for developed as well as developing countries (Figure 7.1).

Figure 7.1. Flood depths in New Orleans, USA, on 3 September, 2005, five days after flooding from Hurricane Katrina, in feet (0.3 m) (Source: www. ka trina. html).

Scale matters in at least three ways in assessing the impacts of climate change on industry, settlement and society. First, climate change is one of a set of multiple stresses operating at diverse scales in space and through time. Second, both the exposure to climate change and the distribution of climate-sensitive settlements and industrial sectors vary greatly across geographic scale. The primary social and economic conditions that influence adaptive capacity also differ with scale, such as access to financial resources. One could say, for instance, that at a national scale industrialised countries such as the UK and Norway can cope with most kinds of gradual climate change, but focusing on more localised differences can show considerable variability in stresses and capacities to adapt (Environment Canada, 1997; Kates and Wilbanks, 2003; London Climate Change Partnership, 2004; O'Brien et al., 2004; Kirshen et al., 2006). Third, temporal scale is a critical determinant of the capacity of human systems to adapt to climate change; for instance, rapid changes are usually more difficult to absorb without painful costs than gradual change (Section 7.4; Chapter 17).

7.1.2 Scope of the chapter

Guidance for the preparation of the IPCC Fourth Assessment Report requested particular attention by this chapter to five systems of interest: industry, services, utilities/infrastructure, human settlement and social issues. Chapter 5 of the report deals with impacts and adaptation on the food, fibre and forest products sectors, and Chapters 9 to 16 deal with impacts and adaptation in global regions.

Chapter 7's topic of 'industry, settlement and society' is clearly very broad; and many of the components of the chapter, such as industry and services, settlements, financial and social issues, are so heterogeneous that each could be the subject of a separate chapter. Very briefly, however, the chapter will summarise and assess the literature relevant to the impacts of climate change on the structure, functioning, and relationships of all of these components of human systems potentially affected by climate change, positively or negatively.

The chapter (1) identifies current and potential vulnerabilities and positive or negative impacts of climate change on industrial, service and infrastructure sectors, human settlements and human societies; (2) assesses the current knowledge about the costs of possible impacts; and (3) considers possible adaptive responses. In general, it emphasises that climate-change impacts, adaptation potentials, and vulnerabilities are context-specific, related to the characteristics and development pathways of the location or sector involved.

7.1.3 Human systems in context

Human systems include social, economic and institutional structures and processes. Related to industry, settlement and society, these systems are diverse and dynamic, expressed at the individual level through livelihoods. They tend to revolve around such aims of humanity as survival, security, well-being, equity and progress; and in these regards weather and climate are often of secondary importance as sources of benefits or stresses. More important are such issues as access to financial resources, institutional capacities and potentials for conflict (Ocampo and Martin, 2003; Thomas and Twyman, 2005) and such stresses as rapid urbanisation, disease and terrorism. It is in its complex interactions with these kinds of social contexts that climate change can make a difference, easing or aggravating multiple stresses and in some cases potentially pushing a multi-stressed human system across a threshold of sustainability (Wilbanks, 2003b).

In most cases, climate (and thus climate change) affects human systems in three principal ways. First, it provides a context for climate-sensitive human activities ranging from agriculture to tourism. For instance, rivers fed by rainfall enable irrigation and transportation and can enrich or damage landscapes. Second, climate affects the cost of maintaining climate-controlled internal environments for human life and activity; clearly, higher temperatures increase costs of cooling and reduce costs of heating. Third, climate interacts with other types of stresses on human systems, in some cases reducing stresses but in other cases exacerbating them. For example, drought can contribute to rural-urban migration, which, combined with population growth, increases stress on urban infrastructures and socio-economic conditions. In all of these connections, effects can be positive as well as negative; but extreme climate events and other abrupt changes tend to affect human systems more severely than gradual change, because they offer less time for adaptation, although gradual changes may also reach thresholds at which effects are notable.

7.1.4 Conclusions of the IPCC Third Assessment Report

The Third Assessment Report of IPCC Working Group II (TAR) included a chapter on Human Settlements, Energy, and Industry (Scott et al., 2001) and also a separate chapter on Insurance and Other Financial Services (Vellinga et al., 2001). Together, these two chapters in TAR correspond to a part of this one chapter in the Fourth Assessment Report; a substantial part of this chapter is devoted to subject matter not directly addressed in previous IPCC reports (e.g., services, infrastructures and social issues).

The first of the TAR chapters (Chapter 7) was largely devoted to impact issues for human settlements, concluding that settlements are vulnerable to effects of climate change in three major ways: through economic sectors affected by changes in input resource productivity or market demands for goods and services, through impacts on certain physical infrastructures, and through impacts of weather and extreme events on the health of populations. It also concluded that vulnerability tends to be a function mainly of three factors: location (coastal and riverine areas at most risk), economy (those dependent on weather-related sectors at most risk), and size (larger settlements at greater aggregate risk but having more resources for impact prevention and adaptation). The most direct risks are from flooding and landslides due to increases in rainfall intensity and from sea-level rise and storm surges in coastal areas. Although some areas are at particular risk, urban flooding could be a problem in any settlement where drainage infrastructures are inadequate, especially where informal settlement areas lack urban services and adaptive capacities. Rapid urbanisation in relatively high-risk areas is a special concern, because it concentrates people and assets and is generally increasing global and regional vulnerability to climate-change impacts. Other dimensions of vulnerability include general regional vulnerabilities to impacts (e.g., in polar regions), lack of economic diversification and fragile urban infrastructures.

Possible impacts of climate change on financial institutions and risk financing were the focus of a separate chapter (Chapter 8) in the TAR. This chapter concluded that climate change is likely to raise the actuarial uncertainty in catastrophe risk assessment, placing upward pressure on insurance premiums and possibly leading to reductions in risk coverage. It identified a significant rise in the costs of losses from meteorological disasters since the early 1980s which, as has been confirmed by the AR4 (see Chapter 1), appeared to reflect an increase in catastrophe occurrence over and above the rise in values, exposures, and vulnerabilities.

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