Walsh Feb 0509

Food and Water: Basic Challenges to International Stability Climate Change and Future Food Insecurity

Paul E. Walsh Founder and Managing Principal G2 Weather Intelligence, LLC Paul.Walsh@G2Weather.com

G2 Weather Intelligence, LLC

Helping businesses make more money by proactively planning for the influence of weather on consumers and business © 2008 G2 Weather Intelligence, LLC. All Rights Reserved

“Always check the weather report before you pray for rain.” ‐ Mark Twain

Managing Weather‐Related Uncertainty Three components: 1. Understanding value at risk ($) 1. Operational management (managing the knowable) 9 9 9 9

Real‐time Tactical Seasonal Very long‐lead (decades) Scenario Planning

2. Financial management (hedging the unknowable) 9

Weather derivative hedging solutions (CME)

Trust, but Verify: On Seasonal Forecasting, Uncertainty, and Weather Risk Management • Seasonal forecasts useful for understanding climate trends and anomalies • Forecasts based on interactions between the ocean and atmosphere • Operational/policy decisions shaped by probabilities and odds vice absolutes • Financial hedging used to offset the uncertainty inherent in seasonal forecast

“Climate change poses clear, catastrophic threats. We may not agree on the extent, but we certainly can't afford the risk of inaction.” Rupert Murdoch, CEO, News Corp

“…the threat of catastrophic global warming is the greatest hoax ever perpetrated on the American people,” U.S. Sen. James M. Inhofe (R‐Okla)

Photo courtesy of Smiling Pug

Climate Change Primer from the President’s Science and Technology Advisor

The Hockey Stick

Source: John Holdren The Science of Climate Disruption

The Smoking Gun

Source: John Holdren The Science of Climate Disruption

Increased Frequency of Heat Waves

2003

2040

Source: John Holdren The Science of Climate Disruption

Warnings of Future Food Insecurity With Unprecedented Seasonal Heat

“The food crisis of 2006 ‐ 2008 demonstrates the fragile nature of feeding the world’s human population. “ ‐ David Battisti, University of Washington and Rosamond Naylor, Stanford

Higher Growing Season Temperatures Have Dramatic Impacts on Agriculture Productivity • Avoiding a perpetual food crisis under conditions of global warming a serious future challenge • Direct yield losses in the tropics and sub‐ tropics estimated at 2.5 to 16% for every 1°C increase in seasonal temperature Source: David Battisti, University of Washington and Rosamond Naylor, Stanford

>90% Probability Growing Season Temperatures in the tropics and subtropics by the end of the 21st century will exceed the most extreme seasonal temperatures recorded from 1900 to 2006

‐ David Battisti, University of Washington and Rosamond Naylor, Stanford

Regional Examples: France • Summer 2003 heat wave in western Europe • >30K killed • 20% to 30% decreases in agriculture production • Projections call for that level of heat to be the norm by the end of the century

‐ David Battisti, University of Washington and Rosamond Naylor, Stanford

Regional Disruptions Have Global Implications • Countries respond to production and price volatility by restricting trade or purchasing large quantities on international markets • Future heat stress on crops and livestock will occur in an environment of rising demand for food and animal feed making markets more vulnerable to price swings • Most damaging to poor households that spend the majority of their incomes on staple foods

World Bank Weather Risk Management Efforts in Malawi

World Bank Weather Risk Management Efforts in Malawi

World Bank Weather Risk Management Efforts in Malawi

World Bank Weather Risk Management Efforts in Malawi

Heating up the Climate Change Debate • Possible we could be entering into a period of cooling across the populated regions in the Northern Hemisphere • The Pacific Decadal Oscillation (PDO) is a pattern of Pacific climate variability that shifts phases on at least inter‐decadal time scales, usually about 20 to 30 years

A New Regime of Colder Weather?

? ?

“In general, the climate regime no longer resembles the recent warm spell of the last 25 years. The persistence of the very cold Pacific Ocean of the the last couple of years has resulted in … patterns more similar to the 1950s‐1970s. If this “old‐school” pattern persists much longer, the global oceans will continue to cool off, and we will likely head into a cooler multi‐decadal climate regime.” ‐‐ Dr Todd Crawford, WSI Seasonal Forecaster

Spring 2009 Weather Driver: La Nina Redux

Typical January – March Weather During Moderate to Strong El Nino and La Nina

Summary Points • Science: >90% likely (“virtually certain”) climate change will result in significant global food disruptions this century • Tropics and sub‐tropics the most at risk for significant disruption; impacting the most at risk populations • Solutions likely to come in the form of adaptive technologies and increasing use of financial hedging instruments • Political debate re: climate change may be heating up over the next few years if the PDO phase shift results in a long‐term return to cooler temperatures • Complicating the transformational and adaptive changes needed to manage the coming challenges

Questions?

Paul Walsh, G2 Weather Intelligence LLC – Paul.Walsh@G2Weather.com – Direct: +1.917.463.4238 – Mobile: +1.610.246.0623 – Blog/Website: www.G2Weather.com “Changing the way business thinks about the weather”