Panel, Conference Presentation
Climate Change: Hope for the Best, Prepare for the Worst
Milken InstituteNathaniel Keohane, Michael Levi, Molly Macauley, Richard Sandor, Sheldon Whitehouse, Peter Passell
- The panel operates on the premise that climate change mitigation alone is insufficient; adaptation is now necessary due to "past the point of no return" impacts, including species loss, extreme weather, crop failures, and regional migration.
- Panelists noted a shift in the environmental community's view: adaptation is no longer seen as undermining mitigation efforts but as a complementary strategy required by observable near-term impacts like Superstorm Sandy, droughts, and wildfires.
- Molly McCauley introduced "geoengineering" as a potential "third wheel" in climate policy, arguing for R&D and global governance to manage tipping points, though she warned against treating it as a substitute for reducing emissions.
- Richard Sanders asserted that "cap-and-trade" mechanisms are not dead, citing that California's carbon trading volume now exceeds U.S. lumber futures and approaching oat futures, with expansion expected in BRIC nations.
- Senator Sheldon Whitehouse emphasized that adaptation has limits; while dike construction in NYC is feasible, deacidifying the Pacific Ocean or cooling Narragansett Bay is not, necessitating a return to aggressive carbon pricing.
- The U.S. current rebuild model, which mandates rebuilding "as before" after disasters, is deemed inadequate because climate change is not in a steady state, meaning future storms will be more severe due to rising sea levels (10 inches since 1938).
- There is a political challenge regarding coastal protection, where existing incentives like flood insurance encourage development in vulnerable areas, creating a conflict between efficiency and fairness.
- Building codes require a shift from reacting to historical data (e.g., "Sandy plus one foot") to anticipating future climate risks, as seen in New Jersey where current codes were surpassed by only one to two feet during Superstorm Sandy.
- Michael Levy identified a critical need for better "spatial and temporal resolution" in climate science to allow local, state, and private actors to make informed adaptation decisions, as current global projections are too broad for actionable planning.
- Richard Sanders highlighted a systemic risk in the insurance industry, noting that the primary surplus is only $550 billion, which is insufficient to cover the frequency of "1-in-100-year" events that now occur roughly every two years, potentially threatening the financial system.
- The panel discussed "catastrophic bonds" (parametric bonds triggered by specific event metrics) as a potential tool to manage risk, contrasting them with indemnity-based contracts that have historically failed to scale.
- Senator Whitehouse warned that failure to address climate change responsibly damages the U.S.'s standing as a global exemplar of liberty, particularly in the eyes of vulnerable nations like Bangladesh and Vietnam.
- Congress currently lacks the political will to discuss adaptation details due to partisan gridlock, with many Republicans avoiding the term "climate change" entirely, pushing the conversation to a "primitive" state.
- Nat Kahane observed that North Carolina legislators have banned references to sea-level rise projections exceeding three feet, creating a political environment that ignores scientific consensus.
- Kahane suggested that framing climate adaptation around ecosystem preservation might attract different political support than the energy-centric mitigation debate.
- Richard Sanders proposed treating electricity as a FERC-regulated commodity similar to natural gas to facilitate $75–100 billion in infrastructure investment and interstate grid modernization, noting this could be legislated in "one page" but remains politically stalled.
- The discussion on developing nations concluded that adaptation cannot be a separate funding stream but must be integrated into mainstream development aid to prevent infrastructure (e.g., Chinese railways in warming permafrost) from becoming obsolete.
- Michael Levy noted that while foreign aid faces trade-offs, specific adaptation funding can serve as a strategic diplomatic lever to secure global agreement on emissions reductions.
- The panel identified a lack of baseline data on migration patterns as a major obstacle to predicting climate-driven displacement, complicating efforts to distinguish climate refugees from those migrating for economic reasons.
- Defense Department funding via the "Minerva program" is supporting university research in Africa to analyze how climate change drives security challenges and migration, with results intended for public planning.
- Richard Sanders hypothesized that desertification and water scarcity may pose greater security risks than coastal flooding, specifically citing the potential for conflict between India and Pakistan over Himalayan water sources.
- International water governance faces structural challenges, with upstream nations (often possessing more military power) holding significant leverage over downstream users, complicating equitable water sharing agreements.
- Adaptation in agriculture requires a focus on "disseminating knowledge" and resilience (e.g., drought-resistant crops) rather than solely inventing new technologies, particularly in nations with limited R&D capacity.
- The panel criticized current global "virtual water" trade, where water-scarce nations export water-intensive crops (e.g., Egyptian cotton, Australian cattle), depleting aquifers and threatening long-term food security.
- A final concluding statement emphasized that the current climate crisis is unprecedented, with atmospheric CO2 levels exceeding 400 ppm, surpassing the natural bandwidth in which human civilization evolved, creating "unknown unknowns" that demand immediate mitigation.