Page 53 - IRMSA Risk Report 2021

UNIVERSITY OF CAPE TOWN
GRADUATE SCHOOL OF BUSINESS
Prof RALPH

HAMANN

EXPERT OPINION

South Africa is a water-scarce country and yet it is exposed an event like the Cape Town drought with Day Zero has
to intense storms – westerlies in southern and western become due to climate change. Other indicators relate to
parts of the country, and tropical storms in northern and the economic losses resulting from these adverse events,
eastern parts of the country. Adverse weather events also including both insured and uninsured losses, and most
include drought, which gives rise to water scarcity and critically, loss of life. These points are made in the public
crop failures. Drought contributes to more frequent and arena, but arguably not sufficiently discussed amongst key
more intense fires, especially when coupled with strong stakeholders in government, business and civil society.
winds, which are also more likely due to climate change. There are some efforts by government and the private
Storms give rise to flooding and other physical damages sector to address these risks, but these are insufficiently
related to hail and intense winds. Droughts and storms widespread and insufficient in scope considering their
therefore represent significant risks to South Africa, and scale.
these risks will increase as climate change progresses,
probably at an exponential rate. Put differently, such A key challenge to SA effectively dealing with climate
adverse events are more likely and more severe due to change risk may be compared to the “boiling frog”
climate change. metaphor. Climate change risks accumulate slowly and
thus do not gain significant societal attention – until
Apart from droughts and storms and floods, climate they have become very significant, or even overwhelming
change is also increasing the frequency and severity of as exhibited in disasters or extreme events. They are
extreme heat. Parts of South Africa already experience also associated with spatial and temporal scales that
numerous extremely hot days and their incidence and are commonly beyond the awareness horizon of most
geographic spread will grow. This increases health decision-makers in government and business. This is also
risks, especially for workers such as, farm workers or because other challenges and risks are more immediate
construction workers, as well as vulnerable populations in time and space and therefore crowd out climate
(for example: the elderly, sick, infants) living in informal change risks in people’s attention. Another difficulty
dwellings. It will also reduce labour productivity. relates to the cross-cutting nature of climate change
risks, affecting different parts of the economy and society
Climate change is also having effects on the natural at different scales and timeframes. This means that
environment, over and above the effects of drought or there is a need for both long-term strategic planning and
storms on crops and livestock. Some of the land that is coordination between different parts of government, as
currently arable will likely become less so, or entirely arid. well as collaboration with private sector and civil society
The distribution of pests and pathogens is changing and stakeholders.
this will have health risks, such as those associated with
expanding areas of malaria risk. The current scientific A related challenge is that many companies currently
consensus is that climate change is advancing faster focus largely on responding to climate risks to their own
than expected 10 to 20 years ago. Particular concerns operations. This ignores opportunities to develop more
surround the likely existence of thresholds in the climate collaborative and effective strategies to address such
system, which, when breached, may lead to exponential risks at community or landscape levels. Sometimes it
increases in the rate of climate change. A prominent may even worsen the underlying problems (also referred
example is the thawing of permafrost in the Arctic due to as “maladaptation”). A particularly important type of
to rising temperatures, which would release immense opportunity to pursue is known as “ecosystem-based
amounts of methane gas (a powerful greenhouse gas) adaptation,” which focuses on the restoration and
and thus further accelerate climate change. maintenance of ecosystems that help reduce climate
risks. Examples include coastal dune systems that play a
The key indicators of climate risks and related risks are vital role in protecting against floods and storm surges.
in the incidence and severity of droughts, extreme heat Many adaptations to climate change risks are “no-regret”
days, storms, floods, and changing distribution of plants, interventions and they can have diverse “co-benefits.” In
animals, and micro-organisms, including pathogens. other words, they involve measures that not only address
Droughts and floods happen anyway, of course, but there climate risks, but also have benefits for employment,
is a growing and increasingly rigorous science surrounding community development, water quality and security –
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the so-called attribution of such adverse events to broader society, in fact.
! climate change. So, for example, there are increasingly
robust calculations that tell us how much more likely

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