1、REPORTWere doomed,now what?2024Finding the way through climate change adaptation technologies in an uncertain future Cooper,Interstellar“Mankind was born on Earth.It was never It was never meant to die meant to die herehere.”Blue Shift /REPORT 0063Were doomed,now what?Finding the way through climate

2、 change adaptation technologies in an uncertain futureThe collective Making Tomorrow gathers experts in foresight,anthropologists,economists,but also makers,designers,and science fiction authors.It is a pioneer in foresight and design fiction approaches.”http:/making-tomorrow.mkrs.fr/AuthorsZoe Hucz

3、ok,Project Leader of Blue Shift,Arthur D.LittleDr.Albert Meige,Director of Blue Shift,Arthur D.LittleContributorsRick Eagar,Partner Emeritus,Arthur D.LittleMelissa Dazin,Business Analyst,Arthur D.LittleAdam Philippstahl,Consultant,Arthur D.LittleShanar Tabrizi,Climate Change Technology Expert,WIPODr

4、.Peter Oksen,Green Technology Research Manager,WIPOMaking TomorrowJoyce Coffee,President,Climate Resilience ConsultingRobert McNee,Deputy Director of Resilience Services,Climate Resilience ConsultingVikram Sarbajna,Founder&CEO,AgtuallGael Queinnec,Expert in Corporate Foresight&Sustainable Developmen

5、tCarlo Stella,Global Practice Leader,Sustainability,Arthur D.LittleSimon Norman,Manager,Arthur D.LittlePhil Webster,Partner,Arthur D.LittleDr.Franziska Thomas,Partner,Arthur D.LittleDr.Ulrica Sehlstedt,Partner,Arthur D.LittleFlorent Nanse,Partner,Arthur D.LittleMarc Wiseman,Senior Advisor,Arthur D.L

6、ittleArnaud Jouron,Global Practice Leader,Performance,Arthur D.Little Luis del Barrio,Partner,Arthur D.LittleThinker-in-residenceCdric Villani,President of the Fondation de lcologie PolitiqueCONTENT-CONTENT-CONTENT-CONTENT-5CONTENT-CONTENT-Executive summary 6Preamble 101.Considering an adaption appr

7、oach 142.The challenges ahead 20Interlude:We need you to take charge 283.Modeling uncertain outcomes 324.Responding with technology 645.Taking action 92Conclusion 100Appendix:Taking action on extreme heat 1046Blue Shift /REPORT 006Executive summary No matter how successful the world is at mitigating

8、 global warming,many of the impacts of climate change are already underway and will greatly affect the future of humanity,society,and business.There is an unavoidable need to adapt to climate change,alongside efforts to reduce emissions and achieve net zero targets.For businesses,this implies a requ

9、irement to consider adaptation as part of any forward-looking strategy.Adaptation forms part of a broader set of sustainability goals,alongside mitigation of impacts and improvement of resilience.Indeed,there are many overlaps between them;for example,improving resource-use efficiency is an adaptati

10、on measure that also mitigates impacts.Protecting assets against climate impacts contributes to adaptation by bolstering resilience.Our chosen focus on adaptation in this Report does not imply that it should be prioritized ahead of mitigation or building resilience,but rather that it should be part

11、of the overall response.7Blue Shift /REPORT 006Deciding where to focus investment and development efforts for adaptation is difficult.The technologies to address adaptation needs are,for the most part,specific,numerous,and fragmented.Adaptation solutions are diverse across different industries and a

12、re often driven by local circumstances,making scalability hard to achieve.At the same time,funding for adaptation tech remains low it is estimated that less than 10%of all climate technology funding went to adaptation in 20202021.Furthermore,the suitability and viability of adaptation solutions in t

13、he future will be greatly affected by a range of uncertainties,such as market dynamics,regulation,and consumer behavior.This complexity often leads to decision paralysis or,at least,an extended“wait and see”philosophy.In this Report,we aim to provide a way through the complexity for executives,respo

14、nding to the key question,“How can decision makers harness technology to help their businesses adapt to the diverse,multivariate,and ambiguous impacts of climate change?”The Report is based on a four-month study by Arthur D.Littles(ADLs)Blue Shift,incorporating the results of more than 40 interviews

15、 with corporate executives,climate adaptation experts,venture capitalists(VCs),and start-ups,along with two surveys covering 70 respondents.We were pleased to collaborate with the United Nationss(UNs)World Intellectual Property Organization(WIPO),which has established the“Green Technology Book”and a

16、 solutions database comprising some 140,000 entries,as well as design fiction agency Making Tomorrow on future projections.Our approach was first to understand the adaptation challenges businesses face and then to set the scene by providing a clear summary of the relevant geophysical and biological

17、impacts of a“+3C by 2100”climate change,based on projections by the Intergovernmental Panel on Climate Change(IPCC).We took these impacts as a“given.”Next,we explored the implications of adaptation for a range of possible futures by considering specific combinations of critical economic and behavior

18、al variables.This enabled us to develop a series of plausible future projections,which we fleshed out in terms of their impacts using design fiction approaches.We then analyzed how each future projection would give rise to a set of functional expectations and technology needs for adaptation.Finally,

19、we identified a series of“no regret”adaptation solutions,as well as enabling technologies and capabilities that are relevant for businesses irrespective of future uncertainties,and developed guidance on how to embark on the adaptation journey.The challenges ahead In Chapter 2,we discuss the four gen

20、eric business challenges that companies must address to adapt to climate change.These include:1.Source securing the availability and supply chain of critical raw materials and resources.Sub-challenges include water scarcity,declining crop production,access to critical materials,and disrupted supply

21、routes.2.Make adapting manufacturing and other industrial processes to a changing climate.Sub-challenges include securing energy and water supplies,productivity improvements,and maintaining viable working conditions.3.Protect safeguarding industrial sites and assets from climate change impacts.Sub-c

22、hallenges include detection and alerting(of unforeseen weather events),shielding of assets,resilient design,remediation after disruption,and relocation of sites.4.Sell marketing competitive and differentiated goods and services to meet the needs of consumers in a changing climate.Sub-challenges incl

23、ude developing new innovative products and services and adapting to new consumption patterns and changing sales channels.Companies must consider how these four types of challenges could affect their business operations as they consider their options.Modeling uncertain outcomesChapter 3 addresses som

24、e of the factors shaping the future environment for adaptation,split across geophysical,biological,behavioral/demographic,and economic categories.Modeling these critical factors suggests five future projections that companies should consider in developing their adaptation responses.We identified a t

25、otal of 11 shaping factors that affect climate change adaptation.In the Report,we describe five geophysical and biological factors and characterize their likely impacts,such as extreme climate events,freshwater availability,sea level rise,biodiversity loss,and increased pests.These results are based

26、 on an assumed“+3C by 2100”trajectory,which falls within the confidence interval for the IPCCs Representative Concentration Pathway(RCP)6.0.The geophysical and biological impacts of this trajectory are widespread and large-scale.In the behavioral/demographic and economic categories,which together we

27、 call“human shaping factors,”we identify six factors,of which four are the most critical because they have both high potential impact and high uncertainty.These critical factors are regulations,consumer behavior shift,competitive pressure,and availability of finance.By considering each“on/off”combin

28、ation of these four factors,we generated 24 future projections,of which five are the most plausible,differentiating,and technologically relevant:1.Green Communities strong consumer behavior shifts but limited finance.This is a resource-scarce world in which grassroots adaptation initiatives flourish

29、,without large-scale projects.2.Lonely at the Top no consumer behavior shift but high competitive pressure.Adaptation is driven by global market leaders targeting affluent customers in a highly unequal,two-speed society.3.Wild Green West strong finance but little regulation.This is characterized as

30、creative chaos in which adaptation initiatives sprout everywhere,fueled by private capital but lacking any regulatory backbone.4.Dont Look Up limited finance and no consumer behavior shift.This is a pessimistic future in which neither customers nor financial institutions have adjusted to the new cli

31、mate reality.5.Adaptation Surge all variables favor adaptation.This is a relative utopia in which adaptation is the norm,resetting expectations and creating new markets and new needs.These projections dont seek to describe a full world but rather illustrate a range of futures that may partly coexist

32、.To deliver a deeper understanding of their consequences,we used a design fiction approach,creating artifacts from each possible future.These help better identify the technological options that will flourish in particular projections.Responding with technologyThe most relevant technologies for each

33、future projection can be mapped and ranked by maturity and impact,as well as across the four challenges discussed in Chapter 2.Overall,value lies more in adjusting already-existing technologies to specific and local problems rather than cutting-edge breakthroughs.In Chapter 4,we identify a short lis

34、t of no-regret solutions,enabling technological bricks,and key capabilities that companies should consider.Each future projection implies a partly different set of functional needs and priorities,for which particular technological solutions are relevant.In Chapter 4,we identify 89 of the most releva

35、nt technology families,mapped across the four challenges and ranked by maturity and impact.We also indicate specific technology examples and representative providers.Overall,there is a wide range of technologies to consider due to the highly local,multivariate,and multidisciplinary nature of adaptat

36、ion.The value that adaptation technologies bring lies less in cutting-edge performance or breakthroughs and more in applying existing technologies to solve very specific and local problems at an acceptable financial,environmental,and social cost for all stakeholders involved.This is the key area for

37、 innovation.Many technologies that were not developed for adaptation nevertheless play a key role in this space,from advanced consumer sentiment analysis to digital twinning.There is no single best approach to solving adaptation challenges.Instead,a nuanced consideration of a businesss ecosystem on

38、its operations,and vice versa,is needed.Adaptation strategy is therefore best approached as an integral part of company strategy.No-regret moves that will be relevant regardless of the projection,or the industry concerned,include:-Solutions early warning systems,thermal comfort systems,geographic in

39、formation systems(GIS)for site location,aerial drones for imaging,robots for maintenance and automation of production,and water efficiency and recycling systems-Key technological bricks sensing technologies,including Internet of Things(IoT)and remote sensing(including light detection and ranging,or

40、LiDAR);digital twins and generative AI(GenAI)for simulation;and neural networks(notably graph neural networks GNNs)for prediction-Underlying capabilities data science,complex systems modeling,design for scarcity,responsive risk assessment,and strong local partnershipsUltimately,climate is a complex

41、system,which means it exhibits hard-to-predict,emergent effects.While the likely scale of climate change impacts is well evidenced,generally the sequence and speed of development of individual events are hard to predict.The capability to model complex systems and their impacts at a local scale will

42、be key to developing comprehensive and nuanced approaches to successful adaptation.8Blue Shift /REPORT 006Taking actionA survey conducted as part of the study confirmed that a lack of knowledge of the best course of action is the biggest hurdle to business adaptation.As described in Chapter 5,to mov

43、e forward,companies should focus on understanding their climate change issues and risks,putting suitable governance in place,establishing means of financing,and developing local partner ecosystems.A lack of knowledge on the best course of action is followed by resistance to change,lack of funds,and

44、technology limitations as the biggest hurdles to business adaptation.To move forward with adaptation strategies,companies must consider four key questions:1.How to predict?Decision makers should begin by creating their own global warming trajectory assumptions and identifying the shaping factors mos

45、t critical for their industry and global footprint.They need to conduct site-by-site assessments of potential risks,both acute and chronic,and pilot improved risk-monitoring and modeling approaches,leveraging digital technologies,such as digital twinning and AI.2.How to decide?Businesses will need a

46、 suitable governance approach to oversee the adaptation agenda,which often stretches across several functions.New metrics are likely to be required.Approaches such as heat maps can help allocate priorities.Abilities to“think global,act local”and enhance customer listening are key.3.How to finance?Mo

47、bilizing funding for adaptation requires updating financial metrics,including pricing climate-risk vulnerabilities in terms of damage to assets,production loss,and possible reputational effects.It may also involve the complex task of pricing positive externalities(productivity gains,employee retenti

48、on)and potential market opportunities from adaptation(market share gains,or new product-market fit).It also requires working with longer timelines(15 years)than is customary for most corporate decision-making.Blended finance solutions,which combine concessional public funds with private capital,can

49、be leveraged when corporate adaptation investments impact communities.4.How to build?Because adaptation problems require local solutions,it will be essential for businesses to develop local ecosystems of partners.As with any collaborative innovation effort,it is important to set clear ground rules f

50、or intellectual property(IP).Finally,companies will have to accept longer timescales for adaptation investments.ConclusionUltimately,the effectiveness of adaptation to climate change will be a function of how governments,businesses,local communities,and individuals can collaborate to meet local,nati

51、onal,and global challenges.Beyond the no-regret solutions,technological bricks,and capabilities outlined in the Report,there is no single best approach to solve adaptation challenges.What is needed is a nuanced consideration of the impact of a businesss ecosystem on its operations,and vice versa,to

52、identify the most relevant solutions.Climate change will become an increasingly consequential constraint on business strategy and forward planning.By 2040 and beyond,we may already be in a situation where“adaptation strategy”has become almost inseparable from“business strategy.”While this study focu

53、ses on the technological dimension of adaptation,technology alone will not solve adaptation challenges.As our future projections illustrate,the effectiveness of adaptation responses will be the result of how governments,businesses,societies,and individuals interact and behave.In particular,it is bot

54、h very uncertain and very consequential whether consumers change habits,regulation is enacted,financial mechanisms are developed and funds unlocked,and large companies assume leadership in adaptation.Adaptation tends to require localized solutions,yet focusing only on local perspectives,following se

55、lf-interest,and applying single metrics will fail to address the system-level global challenges.It will also increase the risk of“maladaptation”solutions where the remedy is worse than the cure.Behaviors toward adaptation are prone to the prisoners dilemma:is it better to postpone costly adaptation

56、investments and maintain competitive advantage,or invest now and rely on others to do the same for mutual benefit?Solving the dilemma requires a new type of collaboration between governments,local communities,businesses,and individuals that combines local,national,and global system-level interests a

57、nd challenges.Such collaboration is extremely challenging to achieve and will involve painful trade-offs.Nevertheless,change does come from necessity.Businesses play a key role in shaping a future that ensures that“wait-and-see”does not result in much worse damage.9Blue Shift /REPORT 006Preamble I a

58、m in the process of reaching the 2,507-meter apex of Pic dAnie,a summit of the Pyrnes-Atlantiques,Randonne skis equipped with seal skins on my feet,ice axe in hand.Sweat is dripping from my forehead,stinging my eyes.Yet I am only wearing shorts and a tank top.I think to myself,“This would be a great

59、 illustration for our Report on adaptation to climate change.”I also recall what the president of a large sports equipment company confided in me a few weeks ago:“We are going to leave the ski industry.”Blue Shift /REPORT 00610Why leave the ski industry when the market is continuing to grow?On the o

60、ne hand,because climate change has already severely impacted the operational costs of ski resorts and their opening periods(as an example,about 87%of American ski resorts are dependent on artificial snow production1).This market is therefore not sustainable in the long term.On the other hand,its a m

61、atter of image:the companys brand cannot continue to be associated with what is becoming an unnatural exploitation of the mountains.As I cautiously embark on the descent,these thoughts lead me to maladaptation,referring to adaptation initiatives that increase climate change risk and vulnerability,li

62、ke turning up the air-conditioning in a heat wave.A lazy and cynical approach to adaptation.An adaptation about resignation.We wrote this Report for those businesses that dont plan on resigning from the fight against climate change.In it,we summarize the study we conducted that involved about 40 int

63、ernational experts.This journey has allowed us to forge certain convictions,some of which are very alarming.As an example,regardless of our decisions and actions today,the world is likely to be heading toward a warming of+3C by 2100.And this reality comes with cascading consequences:from rising sea

64、levels to increasingly extreme weather events to massive migratory flows.For businesses,this raises four major challenges:sourcing critical materials,maintaining manufacturing productivity(making),protecting assets,and selling new products and services for the new normal.The unavoidable conclusion?W

65、hile continuing our efforts to mitigate our impact on global warming,companies must begin to adapt today.Climate change adaptation is an existential question.I wish I could say that I am an expert on climate change.I am not.However,during this study,my team and I interacted with more than 40 leading

66、 experts across the globe.I would like to share three key insights with you that I found surprising,alarming,and yet still hopeful:1.Just a small average global temperature increase such as+3C by 2100 versus the preindustrial era has an enormous impact of which most of us are unaware.2.The most comp

67、licated problems(understanding what is going on and proposing solutions)turned out to be relatively simple,while the simple problems(deciding and acting)turned out to be the most complicated.3.The climate change trajectory we are most likely already on will make it very tough for all of us;however,w

68、e can adapt.We will adapt.Technology is part of the solution,but only one part.These three insights are detailed in Chapters 2-4 of this Report.Just a small average global temperature increase such as+3C by 2100 versus the preindustrial era has an enormous impact of which most of us are unaware.11Bl

69、ue Shift /REPORT 006As an appetizer,I share two intriguing anagrams:“climate change”is the anagram of“technical game”Illustrating the fact that technology,indeed,is part of the solution to this major challenge that we are collectively facing.12Blue Shift /REPORT 006Maybe more obscurely,“climate chan

70、ge”also transforms into“teaching camel”Which reminds us that besides technologies,nature can teach us effective solutions like the camel,perfectly adapted to its warm environment.This reminds us also that we should not fall completely into techno-solutionism.Albert Meige,PhD13Blue Shift /REPORT 0061

71、4CHAPTER14115CONSIDERING AN ADAPTATION APPROACH1Considering an adaptation approachNo matter how hard we try to correct course now,climate change impacts are going to affect us.This means that businesses must consider adaptation as an important aspect of future strategy building.Blue Shift /REPORT 00

72、616Our focus on adaptation in no way suggests that it should be a substitute for mitigation efforts or is in any way a higher priority.However,it is important to understand the requirements and potential opportunities that adaptation brings,from both a business and technology perspective.To frame th

73、is Report,we have based our thinking on a climate impact of+3C by 2100,similar to the+2.8 figure put forward by the IPCC.2 As Figure 1 shows,this will have dramatic impacts on agriculture,sea levels,disease,freshwater availability,biodiversity,and extreme weather events,such as wildfires.A double fo

74、cus:Businesses&technologiesClearly,adaptation to climate change is a broad and complex topic.This Report focuses on just two aspects:(1)climate change adaptation from the perspective of businesses and(2)technologies enabling adaptation.This means that the Report addresses policies,infrastructure,and

75、 community-based initiatives only to the extent that they can be co-implemented by the private sector and include a technological component.We also do not address wider trends,such as geopolitical turmoil,which will also impact or potentially limit the abilities of businesses to adapt.This chosen sc

76、ope reflects Blue Shifts focus on forward-looking technologies.It should not be interpreted to suggest that political,economic,and social changes are secondary to technological enablers.Fig 1 Likely climate impacts for a“+3C by 2100”trajectorySource:Arthur D.Little,IPCCSource:Arthur D.Little,IPCCFig

77、 1 Likely climate impacts for a“+3C by 2100”trajectoryExtreme climate eventsFreshwater availabilitySea level riseBiodiversity lossPests&diseasesLikelihood of wildfire events will increase by nearly 30%globally by 204020501 in 4 people may live in a country affected by chronic shortages of fresh wate

78、r by 2050Over 500 cities&1 billion people will be exposed to sea level rise by 20402050More than 90%of live coral reefs could vanish by 2040Pest damage to wheat,rice&maize production may rise by 10%-25%per degree of global warming1234517Blue Shift /REPORT 006Adaptation:A subset of the climate change

79、 toolbox As Figure 2 shows,the sustainability conversation is rich and broad and includes several overlapping but distinct goals,among them mitigation,adaptation,and resilience.Business adaptation overlaps partially with each of these goals in various ways,for example:-Mitigation-promoting adaptatio

80、n mostly in the form of resource-use efficiency(e.g.,adapting to lower water resources),while also preserving existing supplies-Opportunities borne out of adaptation the creation of new products and services to accompany the transition to a changing climate-Resilience protecting industrial assets,pe

81、ople,and processes against climate impactsAdaptation:A plethora of solutionsWhile climate change mitigation focuses on the release of greenhouse gases(GHGs)into the atmosphere from a range of sources,adaptation is more concerned with addressing a multiplicity of impacts that all occur locally.For ex

82、ample,a community living in a single valley may need to address the drying up of its local river,the exposure of the village to heat waves,and landslides due to mountain slope erosion using tools that may not be fully scalable or applicable to other locations or issues.Essentially,this means that th

83、e value of adaptation solutions lies in the successful application of technologies to a particular problem at an acceptable cost.Therefore,the technologies to address adaptation needs are specific,numerous,and fragmented.At the same time,technological hype and funding for adaptation tech remain low.

84、It is estimated that less than 10%of all climate funding went to adaptation in 20202021.3Fig 2 The climate change issue spaceSource:Arthur D.Little,IPCC,Global Environment Facility(GEF)Source:Arthur D.Little,IPCC,Global Environment Facility(GEF)Fig 2 The climate change issue spaceMITIGATIONAvoidance

85、 of&reduction in flow of heat-trapping greenhouse gases in the atmosphereADAPTATIONAdjustments in ecological,social&economic systems in response to actual or expected climatic stimuli&their effects or impactsRESILIENCEAbility to absorb,withstand&bounce back from climate impactse.g.,carbon capture e.

86、g.,snow guns at ski resortsADAPTATION OF BUSINESSESe.g.,efficient national electric gridse.g.,sea wallse.g.,ports on the Arctic Oceane.g.,closed water circuits in factoriese.g.,drought-resistant crops e.g.,vineyards in Scotland18Blue Shift /REPORT 006Source:Arthur D.Little,WIPOFig 3 WIPO GREEN datab

87、ase,technologies by application type40%18%13%10%9%8%EnergyTransportationPollution&wasteBuilding&constructionFarming&forestryProducts,materials&processes2%Water141,212To help identify green technologies,WIPO established the free,online WIPO GREEN Marketplace for Sustainable Technology platform in 201

88、3,which catalogs around 150,000 technologies and patents for solutions to environmental or climate change challenges across seven large application domains(see Figure 3).Technology for climate change adaptation In this Report,we aim to cut through the noise by responding to a simple problem statemen

89、t:how can decision makers harness technology to help their businesses face the diverse,multivariate,and ambiguous impacts of climate change?To answer this question,we followed a seven-step approach:1.Outline the main challenges companies face in adapting to climate change.2.Set the stage by assuming

90、 a“+3C by 2100”trajectory in 2040.3.Draw out projections combining possible human responses to climate change.4.Use design fiction methods to amplify the concrete impacts of specific projections.5.Detail functional expectations and relevant technologies for each projection and challenge.6.Identify t

91、he no-regret moves:solutions,enabling technologies,and capabilities that should be developed now to be able to adapt.7.Provide insights to help companies embark on their adaptation journey:how to predict,decide,and build capabilities.The Report is based on a combination of sources,including:-Intervi

92、ews more than 40 interviews with corporate executives,climate adaptation experts,VCs,and start-ups-Surveys two surveys,one with corporate executives and one with global academic experts,with a total of 70 respondents-Collaboration with WIPO,covering the requirements for adaptation technologies-Docum

93、entary sources,including the 2022“WIPO Green Technology Book”(“Adaptation edition”)and the IPCCs“AR6 Synthesis Report:Climate Change 2023,”among others-Collaboration with design agency Making Tomorrow,creating design fiction and artifacts for each selected projectionFig 3 WIPO GREEN database,technol

94、ogies by application typeSource:Arthur D.Little,WIPOPeter Oksen,WIPO“Adaptation technologies are a highly diverse field of innovation,which to some degree live in the shadows of the more dominating mitigation technologies.One of the reasons for this is exactly this diversity,which may make it harder

95、 to recognize both what is needed where and when,and what could be the solution.Furthermore,many solutions for contributing to adaptation are already there and in use but will gain new importance,while others will be based on new technologies,some advanced,others more simple.”19Blue Shift /REPORT 00

96、620CHAPTER20221THE CHALLENGES AHEAD2The challenges aheadThe many adaptation challenges businesses face vary between locations and industries.However,it is useful to consider them in terms of four generic categories by function:source,make,protect,and sell.Blue Shift /REPORT 00622SourceSecuring the a

97、vailability and supply chain of critical raw materials and resources includes sub-challenges,such as:-Water scarcity.The availability of fresh water for irrigation is declining,especially in regions affected by droughts and flooding,while flooding and rising sea levels cause water salination,making

98、the water unusable for agriculture.-Declining crop production.Suboptimal weather conditions are decreasing agricultural yields,such as European heat waves that lead to crop failures.Additionally,climate effects are increasing the appearance of pests and invasive species,while changing growing condit

99、ions mean many traditional crops are now unviable.-Access to critical materials.Due to climate effects like sea level rise,storms,and droughts,interruptions and/or significant slowdowns in supply chains are expected.This means critical materials will become increasingly expensive to procure,includin

100、g rare earths or rare metals for the manufacturing of batteries.-Disrupted supply routes.Interruptions and/or significant slowdowns to the transport and distribution of raw materials,resources,goods,and services are increasing due to severe climate events.For example,due to droughts,the Panama Canal

101、 functioned at reduced capacity during the winter of 2024,with a major impact on global supply chains.Example:Wine industry requires resilient cropsSince grapes grow in narrow temperature zones,with average growing season temperatures between 12C-22C(56F-72F),increasing heat and more severe climate

102、events such as longer heat waves are reducing winemakers productivity.For example,in 2022,France saw its smallest harvest since 1957 due to increased heat waves and rain,costing the industry around US$2 billion in sales.Vineyards near Madrid,Spain,can no longer make wine below 16%-17%alcohol,which f

103、alls outside mainstream consumer tastes.Producers that have started moving to regenerative agriculture have suffered invasions of ants that have eaten their vines.Water scarcity is also a key issue for vineyards in countries such as Chile.Adaptation technologies are needed,and companies are experime

104、nting with new techniques that enable modifications to vines to increase their resilience against diseases and climate events.Critical materials will become increasingly expensive to procure.23Blue Shift /REPORT 006MakeManufacturing and other industrial processes also must adapt to a changing climat

105、e,including sub-challenges,such as:-Energy and water supply.The instability of traditional electricity grids and water shortages caused by extreme climate events impact reliable access to energy and water.As a result,companies are looking to reduce inefficiency and install water recycling systems.-P

106、roductivity improvements.Despite challenges around raw material availability,companies need to preserve product quality to ensure customer satisfaction,while maintaining their manufacturing processes against a backdrop of extreme temperature variations.To offset these factors as well as supply chain

107、 and business interruptions,companies are looking to potentially increase the pace of production,reduce labor and inventory costs,and/or rationalize manufacturing processes to optimize costs and meet changing consumer needs.-Working conditions.Companies must maintain viable working temperatures in f

108、actories and offices despite frequent heat waves,while implementing remote working plans to mitigate more frequent epidemic risks.Example:Securing a reliable energy supplyDue to cheap labor costs,India is home to many textile,electronics,and automotive factories.Today,according to experts we intervi

109、ewed,the Indian electricity grid is 70%coal-powered and 15%hydroelectric,with the remainder coming from nuclear and solar sources.However,the country imports coal from Indonesia and Australia,and lower Indian rainfall due to climate change means that hydroelectric and nuclear power plants are not as

110、 efficient as they once were.This makes the Indian grid highly unstable,with two-thirds of rural and two-fifths of urban households reporting that they face at least daily outages,also interrupting factory production.Adaptation technologies could help improve energy supply(e.g.,through smart grid an

111、d stabilization systems).The instability of traditional electricity grids and water shortages impact reliable access to energy and water.24Blue Shift /REPORT 006ProtectIndustrial sites and assets(including extraction,manufacturing,and logistics)must be protected from climate change impacts,such as r

112、ising temperatures/sea levels and extreme climate events.This includes sub-challenges such as:-Detection and alert.With the increase of unforeseen climate events,such as flooding and storms,governments and companies must ensure they have better capabilities to both predict and warn people of such da

113、ngers.-Shielding.In the event of sea level rise,floods,and storms,companies must better protect their assets and infrastructure from damage,using natural or man-made solutions.-Resilient design.With more severe climate events,companies also must consider new ways of designing and building resilient

114、assets,such as solar panels that can easily be removed before a storm hits.-Remediation.Companies face increased damage or loss of their machinery/production sites due to extreme adverse climate events.To limit downtime and productivity losses,they must be more efficient and quicker to restart produ

115、ction after such interruptions.-Relocation.Some key business locations will be vulnerable to sea level rise/flooding(e.g.,China,Vietnam,and Bangladesh)and droughts/heat waves(e.g.,Sub-Saharan Africa,India,and Southeast Asia),forcing companies to find more resilient locations for their industrial sit

116、es and assets.For example,in China,the headquarters of Alibaba in Hangzhou,the Suzhou Industrial Park(Panasonics country headquarters)and Teslas Shanghai Gigafactory are all located in at-risk areas.Example:Military bases on the US East Coast Sea level rise and more severe storms and flooding are in

117、creasingly affecting businesses on the US East Coast,with studies showing that flood frequency is predicted to triple in the coming years,reaching up to 85 flood days a year by 2050.At the same time,assets and real estate continue to be built in high-risk locations.The US militarys East Coast bases

118、are impacted by this trend.In 2018,for example,a hurricane and floods ripped through a naval base,causing about$4.7 billion in damage,while affecting its ability to conduct and support operations in the Atlantic.The US Department of Defense estimates that there are more than 1,700 US military instal

119、lations in coastal areas worldwide that may be affected by sea level rise.Consequently,the US military has begun to pilot adaptation measures.For example,it is building sea walls at its Norfolk,Virginia,naval base,and,in the Hampton Roads area,the US Navy has updated its building criteria to ensure

120、more resilient infrastructure.Companies must consider new ways of designing and building resilient assets.25Blue Shift /REPORT 006SellCompanies must ensure goods and services are competitive and differentiated amid a changing climate while adapting to new consumer behaviors,including new use cases a

121、nd changing customer demands.This includes sub-challenges such as:-New products and services.Companies must design new innovative products and services in response to emerging needs driven by climate change(e.g.,heat-resistant fabrics).-New usage patterns.Companies must better understand and anticip

122、ate future consumer expectations and patterns of consumption,adapting their business models to remain competitive(e.g.,embracing recycled,reusable,and modular products).-Changing sales channels.In the event of climate-driven supply chain disruption,companies must still be able to deliver products to

123、 consumers.They also need to transform sales channels to mitigate against changing consumer behaviors.Example:Modular products in the automotive industryNew car prices are rising due to increasing material costs.This is driving consumers to look for cheaper options with lower environmental impacts,s

124、uch as buying used cars(2023 sales were up 5%on 2022),leasing vehicles(with this market expected to reach approximately$5.4 billion by 2030 in Europe,from$3.25 billion today,assuming a constant euro-dollar exchange rate),or car-sharing to reduce costs.To remain competitive,automotive manufacturers m

125、ust look to reduce the customers cost of ownership.One way to do this is to develop modular products,which allow users to easily customize their vehicle.By having fewer,more standardized and interchangeable parts,and incorporating fasteners to eliminate the need for screws and bolts,each modular com

126、ponent is designed to be cheaper and easier to assemble/disassemble,while extending the overall product lifecycle.Demonstrating the impact,rather than paying around$1,080 to replace an entire seat with one with lumbar adjustment,in a modular seat all that would be needed is to change and upgrade par

127、t of the backrest,at a cost of approximately$108 to the customer.Companies must adapt their business models to remain competitive.26Blue Shift /REPORT 006“We used to look up at the sky and wonder at our place in the stars.Now we just look down and worry about our place in the dirt.”Cooper,Interstell

128、arBlue Shift /REPORT 00627INTERLUDE We need you to take charge28Blue Shift /REPORT 006Born in 1973,Cdric Villani is a French mathematician very active in public debate.His research in mathematical physics,at the crosspoint between probability,analysis,and geometry,and particularly on the equations o

129、f gases and plasmas,won him the prestigious Fields Medal(the“Nobel of Mathematics”)in 2010.A passionate advocate of science for all,he gained the attention of millions of people through his lectures,books,and broad-audience writings about science.A specialist in the interaction between science and s

130、ociety,he sat in the French Parliament for five years,presiding over the Scientific Parliamentary Office,and is a regular participant in society debates.He is the current president of the Fondation de lEcologie Politique.Some problems seem simple and turn out to be complicated;others seem complicate

131、d and turn out to be simple.As scientists,we live with that uncertainty.For example,a research project that I believed could be solved in a few weeks(as a warmup for further work)turned out to be a deep monster.My main collaborator and I finally solved the problem after more than two years of work,h

132、undreds of mistakes and wanderings,and a 200-page proof,eventually earning me the Fields Medal(an award granted for outstanding contributions in mathematics by young scientists).As for the climate change issue,the monster problem for the international scientific community 30 years ago was the techni

133、cal analysis of natural phenomena at work.What an outstanding challenge to analyze the trends of temperatures,humidity,winds,and so on,behind the complexity,variability,and multifactoriality of weather!What seemed much simpler and understandable was the actions humans would need to take when the tec

134、hnical analysis was over.It turned out to be precisely the contrary.A fantastic international coalition of thousands of scientists harnessed an amazing amount of facts,measurements,and papers to establish conclusions that can all be summarized in a few sentences that even a child can understand:Clim

135、ate is warming up,and weather is becoming more unstable;this is certain.It can be measured,and it is happening fast.It(almost)all depends on carbon dioxide and methane.And its totally not partially due to our human activities.This is a truly remarkable achievement in its simplicity,despite the amazi

136、ng technical difficulties.All resources of natural science have been summoned.Data collection,climate sciences,physics,chemistry,biology,geology,statistics,computer science,numerical simulations I have witnessed many participants in this outstanding collective project,one of the scientific adventure

137、s of our time.This coalition has also recommended some remedies,at least to mitigate climate warming.And it has provided some tools and directions to address the more complex issue of human adaptation.Dozens of plans have been put forth,with many ingredients,quantitative recipes,and so forth,using c

138、urrent tools and ideas.Theres no need to wait for hypothetical recipes,and certainly no time.29Blue Shift /REPORT 006So we have the diagnosis,and we have part of the cure.The math is clear.Change is occurring very fast and can be conjured.Its up to all of us to change the behavior of society.Its for

139、 citizens and governments and infrastructures and companies and banks,private and public sectors alike.Not in 10 years but now.The message seems clear.Scientists have provided a whole bunch of figures and predictions about potential catastrophes and the need for fast decisions and actions to mitigat

140、e and adapt.But then,the real difficulties started,to a level that hardly anyone expected.And it was for the part that seemed simple:convince the whole world to act in the face of such a dire situation.Next came an array of political games,lobbying campaigns,smoke curtains,disinformation,billions of

141、 dollars to prevent action,and cognitive mechanisms for society to not act.The social sciences,including Naomi Oreskes and her collaborators,have made tremendous progress in analyzing these obstacles,but action has hardly started.Taking part in the United Nations Framework Convention on Climate Chan

142、ge was an amazing experience.When the session was organized by scientists,it was marked with energy and determination to act as fast and efficiently as possible.In contrast,roundtables organized by politicians seem to act as slowly and inefficiently as possible.Science always gets things done;politi

143、cal actions can be stuck forever until the most important force comes into play:the will.When I lecture about society transition,I like to enumerate seven key ingredients:diagnostic,plans,motivation,investment,governance,workforce,and control.The first two are what scientists can do.The rest are for

144、 society as a whole,particularly politicians,financiers,professional organizations,and unions,to work out.Companies have a key role to play in this transition.First,because there is just not enough public money,investment,and workforce,by a long shot,to handle all the changes.Second,because change i

145、s easier to implement at the company level than at the government level,which is always subject to more pressure and tension.So your company is also in charge.The good news is that there are plenty of diagnostic tools,examples,and recipes that your company can use to adapt.In the worst case,if your

146、business model depends on the amount of greenhouse gas that you produce,then its time to change your business.But in most cases,it will be about changing habits,replacing products,and finding new ways to continue the actions of your company.Science has done its job;its the part that you could never

147、have done.Now its your time to be in charge.Cdric Villani,President of the Fondation de lcologie Politique30Blue Shift /REPORT 006 Kate Dibiasky,Dont Look Up“We have exactly six months,ten days,two hours,11 minutes and 41 seconds,until a until a comet twice the comet twice the size of Chicxulub size

148、 of Chicxulub tears through our tears through our atmosphere and atmosphere and extincts all life on extincts all life on EarthEarth.”Blue Shift /REPORT 0063132CHAPTER32333MODELING UNCERTAIN OUTCOMES3Modeling uncertain outcomes-Based on our research and corroborated by our surveys and expert intervi

149、ews,we have identified 11 shaping factors that affect climate change adaptation,grouped into geophysical,biological,behavioral/demographic,and economic categories(see Figure 4).Blue Shift /REPORT 00634Shaping factors for climate change adaptationGeophysical1.Extreme climate events phenomena outside

150、the normal range of weather patterns characterized by their severity,duration,or frequency(e.g.,heat waves,droughts,storms,wildfires,landslides,and flooding)2.Freshwater availability a decrease in the amount of clean and usable water accessible for human use and consumption3.Sea level rise an increa

151、se in the average level of the oceans surface over time,due to melting glaciers and thermal expansion of seawater,leading to the erosion and submersion of coastlinesBiological1.Biodiversity loss a severe decline in yield from key crops and livestock,as well as mass vegetal and animal species extinct

152、ions2.Increased pests/invasive species an increase in the activity of destructive insects and animals,leading to damage to ecosystems and possible transmission of diseases to humansBehavioral&demographic1.Regulations legislation and practices put in place by governments and local authorities to prom

153、ote or impose adaptation to climate change2.Consumer behavior patterns of individual purchasing decisions that reflect adaptation to climate change3.Urbanization an expansion of cities and towns as populations migrate due to extreme weather,moving from rural to urban areasFig 4 Shaping factors for c

154、limate change adaptationSource:Arthur D.LittleSource:Arthur D.LittleFig 4 Shaping factors for climate change adaptationBiologicalShaping factorsCategoriesGeophysicalBehavioral&demographicExtreme climate eventsFreshwater availabilitySea level riseBiodiversity lossIncreased pests/invasive speciesConsu

155、mer behaviorRegulationsCompetitivepressureSupply chain disruptionEconomic12345671011Urbanization8Financial mechanisms9HumanAddressed as variable across different projectionsAssumptionsGeophysical&biologicalAs predicted by scientific consensusfor a“+3C by 2100”global warming trajectory35Blue Shift /R

156、EPORT 006Economic1.Financial mechanisms an ecosystem of polices,investors,and financial instruments that mandate or promote adaptation investment2.Competitive pressure major players in the value chain assuming climate adaptation leadership,driving a dynamic market and forcing behavior change onto co

157、mpetitors and suppliers3.Supply chain disruption interruptions or significant slowdowns in the transportation and distribution of raw materials,resources,goods,and servicesDuring our analysis,we assumed that factors within the geophysical and biological categories will behave in line with the“+3C by

158、 2100”global warming trajectory(see sidebar“The+3C by 2100 trajectory”).However,the impact and scope of the behavioral/demographic and economic categories will vary between the different projections outlined later in this chapter.Impacts by categoryGeophysicalThe impacts of geophysical factors will

159、be widespread and large-scale,as evidenced by projections4 and estimates from a variety of sources.For example:-Heat waves are likely to be longer and more intense over the coming decades,with minimum temperatures rising by at least+3C,and an accentuation of up to+8C at the poles,according to the IP

160、CC.Additionally,the combination of high temperature and high humidity is likely to become more prevalent,increasing the“wet bulb effect,”which limits the human bodys ability to cool down from evaporation or sweat.The“+3C by 2100”trajectoryThe“+3C by 2100”trajectory falls within the confidence interv

161、al for the IPCCs RCP 6.0,which predicts a temperature increase of+2.8C versus preindustrial levels,with a possible range between+2.0 and+3.7C.This trajectory considers the likely target gap in 2030 based on current delays in policy and climate action at large.It therefore allows for a cautiously pes

162、simistic outlook,which puts the challenges of adaptation for companies into sharper focus.Global GHG emissionsA+3C global increase by the end of the century is forecast to bring temperatures beyond+3C above preindustrial levels in the second half of the century,as it is assumed temperature will peak

163、 before mitigation measures allow it to plateau and decrease.Treating the geophysical and ecosystemic/biological ramifications of global warming as givens helps make impacts concrete and solutions pragmatic.We purposely do not integrate the Shared Socioeconomic Pathways(SSPs)approach into our baseli

164、ne temperature for projections,as we treat patterns of human development as uncertainties.The impact and scope of the behavioral/demographic and economic categories will vary between the different projections.36Blue Shift /REPORT 006The share of the global land area and population affected by agricu

165、ltural,ecological,and hydrological droughts is projected to increase substantially.Taking action on extreme heatExposure to extreme heat results in more deaths than any other climate-related hazard,and the impacts are increasing.Rising global temperatures,primarily caused by climate change due to GH

166、G emissions,are leading to more frequent and severe heat waves.Alongside the impact on human health,heat waves also affect economies and infrastructure and can compound other climate and non-climate risks,such as drought and wildfires.The threat of extreme heat will continue to increase,and by 2030,

167、between 160 million and 200 million people in India could live in regions with a 5%average annual probability of experiencing a deadly heat wave that exceeds the“survivability threshold”for a healthy human being.Extreme heats impacts on human health and the economy are unequal and vary depending on

168、vulnerability and exposure.People with chronic diseases,older people and the very young,low-income individuals,underserved populations,people living alone,pregnant women,and unhoused people are most at risk to extreme heat.While extreme heat can occur in most populated areas,the intensity is accentu

169、ated in urban areas,with dense populations and economic activity.Moreover,extreme heat exposes populations to multiple negative outcomes,impacting health,the workforce,productivity,and transportation.Extreme heat can compound or even instigate other climate-related risk events.Creating resilience in

170、 economies and communities is a necessity,but it is also an opportunity.Heat resilience stands as a pivotal opportunity for global corporations and organizations of all sizes to innovate and help society adapt.Extreme heat mitigation and adaptation is a great chance for innovation that benefits soci

171、ety and brand image and should be prioritized by forward-looking chief risk,innovation,and finance officers.(Read more from Climate Resilience Consultings Joyce Coffee and Robert Macnee on extreme heat in the Appendix.)-Conditions will be more favorable for the formation of tropical cyclones,particu

172、larly affecting areas in the Pacific Ocean.For example,by 2050,the annual likelihood of an intense tropical cyclone in Japan is likely to more than double from 4.6%in 2020 to nearly 14%.5-By 20402050,the likelihood of wildfire events will increase by nearly 30%globally,according to the IPCC,particul

173、arly due to higher temperatures causing vegetation including rainforests,permafrost,and peatland swamps that would not usually burn to dry out and combust.-By the late 21st century,the share of the global land area and population affected by agricultural,ecological,and hydrological droughts is proje

174、cted to increase substantially from around 15%to 20%at a moderate or severe drought,and from around 3%to nearly 10%in the extreme or exceptional drought.6 Some areas are more exposed to droughts,particularly Africa,South America,and the Mediterranean coast,which will see drought hazard increase by 8

175、2%.7,8-Extreme precipitation events will be accentuated by climate change,increasing the risk of flooding,particularly in Southeast Asia.This will also lead to soil erosion due to extreme rainfall,a trend increasing over 80%-85%of the global land surface.9 By 2050,experts project an increase in the

176、frequency or intensity of precipitation events,especially in North America and Europe.In New York,annual rainfall is expected to increase from 45.6 to about 49.7 inches in that timeline.10-As of 2022,2.2 billion people lacked access to safely managed drinking water.11 Other sources project that dema

177、nd for water will rise by a further 20 to 25%by 2050.12-The consequences of sea level rise will be global,with local variations in risks and damages.Some regions are more vulnerable than others;for example,17%of Bangladesh is predicted to be submerged by 2050,displacing over 20 million people.1337Bl

178、ue Shift /REPORT 006BiologicalA variety of biological factors will impact ecosystems,farming,and the spread of infectious diseases,such as:-Crop and livestock productivity decline and biodiversity loss attributed to climate change are already endangering the whole range of“ecosystem services.”Maize

179、yields,for example,are projected to decline further by 24%by the late 21st century,even as the global demand for cereal for animal feed and food alone is expected to increase by 50%-60%compared to 2000.14-A global increase is predicted in crop pest damage to wheat,rice,and maize production of 10%-25

180、%per degree of global warming.15-The threat of zoonotic disease transmitted between vertebrates and humans is increasing dramatically due to the disruption of natural habitats by climate change(and other human factors like deforestation and urbanization).A greater probability of mosquito-borne West

181、Nile Virus infection is expected in 2025,especially in eastern Croatia,northeastern Trkiye,and northwestern Trkiye,with further range expansion in 2050.16Behavioral&demographicThe way humans react to climate change determines profound political,demographic,and societal trends:-Regulation has so far

182、been the major lever in climate change mitigation efforts.However,for adaptation,while there have been some regulations in place since 2008(see Table 1),they are still sparse,limited to specific industries,and lacking in enforcement power.Whether regulation will ever drive adaptation with the same f

183、orce as mitigation is very much open to question.-While consumers in industrialized countries show some signs of behavioral shifts related to climate change adaptation,counter-adaptation behavior is also being seen.For example,in the US real estate market,homes near sea level rise areas are now sold

184、 for,on average,7%less than comparable homes.17 Yet at the same time,population growth is strong in the hottest,driest,and most vulnerable parts of the country.As an example,more than 800,000 people have moved from California to Phoenix,Arizona,since 2012.18-Urbanization rates are expected to keep i

185、ncreasing,further boosted by the influx of refugees from affected areas,particularly in the Global South,where 70%of those displaced by climate change are moving to cities.19We consider regulation and behavioral shifts in more detail in the next section.Whether regulation will ever drive adaptation

186、with the same force as mitigation is very much open to question.38Blue Shift /REPORT 006Economic-Climate change will profoundly impact key economic drivers on a global scale,with tangible effects on businesses.Financial mechanisms for adaptation are in development,spearheaded by international develo

187、pment institutions,with insurance particularly active.However,while adaptation finance for climate change hit a record$63 billion in 2021/2022,increasing by 28%,it is still significantly below the$212 billion yearly need projected by 2030 for developing countries alone.20-Industry leaders have trans

188、formed entire supply chains with their climate-mitigation efforts,pressuring customers and competitors to change.For example,Apple is demanding that its entire value chain reduce its impact on global warming.-Supply chains are likely to be disrupted by rising sea levels and other factors,potentially

189、 leading to major changes in global economic structures.For example,severe droughts have limited transits through the Panama Canal to 25 per day(down from 36)since January 2024,causing significant supply chain delays and repercussions on costs.21-Commodity prices are highly volatile due to market co

190、nditions,and future supply chain disruptions could significantly increase them.For example,cocoa market prices increased dramatically in 2023 due to heavy rainfalls in West Africa.Table 1 Overview of selected climate-adaptation regulationsSource:Arthur D.Little,UN,Climate Change Committee(CCC),ISOSo

191、urce:Arthur D.Little,UN,Climate Change Committee(CCC),ISOTable 1 Overview of selected climate-adaptation regulationsREGULATIONOBJECTIVESYEARCOUNTRYClimate Change ActBinds UK to long-term emissions-reduction targetIncludes provisions for adaptation:risk assessment&adaption plan 2008UKMonitoring Mecha

192、nism Regulation(MMR)Sets EU internal reporting rules in line with globally agreed obligationsFirst reporting took place in 2015,second in 20192014EUNational Adaptation PlanReduce vulnerability by building adaptive capacity&resilienceIntegrate adaptation strategies into policies&programs2015(Paris Ag

193、reement)Energy Union Governance RegulationExpands on MMR for adaptation reportingSets common rules for planning,reporting&monitoringEnsures synchronization with ambitions of the Paris Agreement2019EUISO 14090Provides principles,requirements&guidelines for climate adaptationOffers framework for organ

194、izations to develop,implement&monitor policies,strategies&activities related to adaptation2019Draft Climate LawRequires member states to develop&implement adaptation strategies&plans,including comprehensive risk management frameworks,&progress assessments2020EUISO 14091Gives guidelines for assessing

195、 risks related to potential impacts of climate change2021ISO 14092Specifies requirements on adaptation planning for local communities&governments based on vulnerability,impacts&risk assessments2020ISO 14093Establishes approach for country-based mechanism to channel climate finance to local governmen

196、tsUses performance-based climate resilience grants offering strong incentives for performance improvements2022“Drone-swarm”farmingFFA allows fleets of drones for seeding&spraying cropsEnables drones like Hylio AG-230 AgroDrone to cover 50 acres/hour2024US39Blue Shift /REPORT 006The impact of human s

197、haping factorsIn our analysis,we captured all the geophysical and biological factors(1-5 in Figure 4)as part of our underlying assumption of a“+3C by 2100”trajectory,effectively taking these factors as a given.To explore plausible futures,we scored the“human shaping factors”(6-11 in Figure 4)accordi

198、ng to their impact and degree of uncertainty,using the results of a survey polling 60 experts and corporate executives(see Figure 5).In the matrix:-A maximum degree of uncertainty(scored 5 out of 5)refers to a 50/50 probability of a particular factor being realized.Conversely,a score of 1 out of 5 r

199、eflects near certainty.-Impact is a qualitative appraisal of the intensity and range of consequences of a particular factor on societies,businesses,and humans.A score of 5 out of 5 reflects very high impact across the board,while 1 out of 5 reflects little or no impact.The factors that gained the hi

200、ghest scores of uncertainty and impact,placing them in the top right-hand quarter of the matrix,constitute“critical uncertainties.”These comprise regulations,consumer behavior,financial mechanisms,and competitive pressure.Supply chain disruption has relatively high certainty and major impact and was

201、 thus integrated as a given into all the future projections.Urbanization has relatively less impact than the other factors,so it was deprioritized in the analysis.Fig 5 Human shaping factor ranking and critical uncertaintiesSource:Arthur D.LittleSource:Arthur D.LittleFig 5 Human shaping factor ranki

202、ng and critical uncertaintiesExtreme climate events1Freshwater availabilitySea level riseBiodiversity lossPests&diseases2345Regulations6Consumer behaviorUrbanizationFinancial mechanismsCompetitive pressure78910Supply chain disruption11UncertaintyImpact987610HighLowLowHigh1112345CRITICAL UNCERTAINTIE

203、SGeophysical&biological factors Human factors 40Blue Shift /REPORT 006The projection methodologyTo build our future projections,we followed a structured methodology(see Figure 6).The methodology comprised four steps:1.Rank the four critical uncertainties listed in Figure 5.2.Identify intersections b

204、etween these uncertainties.3.Generate on/off projections for the intersections between the four critical uncertainties.4.Filter the resulting 24 projections down to five,considering:-Plausibility.Is this scenario internally consistent,or is it self-contradictory?-Differentiation.Is it sufficiently d

205、ifferentiated from others to tell us something new?-Technological relevance.Does this scenario enable us to predict which technologies will be useful for adaptation?This approach yields projections not strictly exclusive of each other,as each only highlights two aspects of the future.Projections may

206、 be compatible in a single world(e.g.,there is a single possible world with high levels of regulation,high competitive pressure,low consumer behavior shift,and low financial resources available).However,our approach addresses this result in two separate projections.We believe this approach more clos

207、ely mimics real-world decision-making than multivariate scenario-building,which often proves an intractable exercise,especially when each variable displays high degrees of uncertainty.Additionally,this approach allows for thoroughly exploring the tension that arises at the confluence between shaping

208、 factors,demonstrating clearly where contradictions,challenges,and opportunities arise.Fig 6 Identifying critical uncertainties and generating on/off projectionsSource:Arthur D.LittleFig 6 Identifying critical uncertainties and generating on/off projectionsFINANCIAL MECHANISMSCOMPETITIVE PRESSURECON

209、SUMER BEHAVIORREGULATIONSFinancial mechanismsCompetitive pressure1Consumer behavior23Regulations456Identifying critical uncertaintiesGenerating projectionsProjection A:Consumer behavior shift ON;finance OFFProjection B:Consumer behavior shift ON;finance ONProjection C:Consumer behavior shift OFF;fin

210、ance OFFProjection D:Consumer behavior shift OFF;finance ONFinancial mechanismsConsumer shiftOFFONOFFONSource:Arthur D.LittleBlue Shift /REPORT 00641“The future cannot be predicted,but futures can be invented.”Dennis GaborBlue Shift /REPORT 006425 projections for the futureThrough this process,we ha

211、ve identified five projections,chosen for their internal consistency,differentiation,and relevance for technology(see Table 2).With the help of our design fiction partner Making Tomorrow,in this section we share“artifacts from the future”based on the five projections.Table 2.Five projections for the

212、 futureSource:Arthur D.LittleSource:Arthur D.LittleTable 2.Five projections for the futureTITLEVARIABLESDESCRIPTIONGreen CommunitiesStrong consumer behavior shift,limited financing A resource-scarce world in which grassroots initiatives flourish,without large-scale projects;a pull toward greater dec

213、entralization,circularity&frugalityLonely at the TopNo consumer behavior shift,high competitive pressureHighly concentrated&competitive industries in which market leaders spearhead adaptation to build competitive advantage&keep satisfying customers demands while operating under increased constraints

214、Wild Green WestAbundant financing,limited regulationA creative chaos in which private adaptation initiatives sprout everywhere,fueled by private capital&hype,with no regulatory backbone to provide an overarching strategy or ensure consistencyDont Look UpLimited financing,no consumer behavior shiftA

215、pessimistic future in which neither customers nor financial institutions have adjusted to the new climate reality,leaving nothing but quick fixes&crisis managementAdaptation SurgeStrong competitive pressure,strong regulation,abundant financing&massive customer behavior shiftA relative utopia in whic

216、h adaptation is the norm&the new currency,resetting expectations,creating new markets&new needs for differentiationBlue Shift /REPORT 00643Projection 1:Green Communities Individuals are stepping back into the spotlight to drive adaptation when large corporations and the traditional financial system

217、struggle to address these issues.To spread their light,we imagined a TV show presenting local small entrepreneurs all over the world seeking to raise funds from the public.The show provides a platform for their initiatives to be recognized and supported.The fiction features an excerpt from the shows

218、 feed on social media BasiX.44How did we get here?A heightened awareness of climate change has dawned on consumers globally following catastrophic climatic events and shortages.This has led them largely to adapt their purchasing habits and lifestyles to cope with current or impending climate impacts

219、.However,the investment world has not evolved to take climate adaptation into account,due mainly to its lack of adequate short-term ROI.Insurers either require highly inflated premiums or else refuse to insure large swathes of climate hazards.The international economyGlobalized flows of capital and

220、goods are limited by geostrategic conflicts and supply chain disruptions.The North-South division of labor remains largely in place,while Southeast Asias and Central Americas hubs suffer greatly from climate impacts.A partial re-localization of supply chains takes place,and local means of production

221、 develop.The lack of financial mechanisms for adaptation means there are significant disruptions to production and consequent losses in productivity,primarily concentrated in the areas most vulnerable to severe climate events.SocietyFrustration grows at the lack of investment in what is perceived by

222、 most consumers and citizens as a critical strategic issue(adaptation),as well as at the ensuing interruptions in service delivery and production of everyday necessities.Winners&losersBusinesses and industries that are very asset-light(first and foremost digital players)or whose assets are located i

223、n low-vulnerability zones gain a competitive advantage.Extraction industries(oil,mining),heavy industry(metals,chemistry),or manufacturing(automotive)and to some degree,telecommunications delivered through overhead lines in vulnerable regions are heavily hit,as moving assets is not always possible o

224、r economically viable,repairs are costly,and there are no funds for large-scale adaptation projects to shield infrastructure.Cultural shiftThe seeming inability of existing financial mechanisms to address climate adaptation drives a move to alternative models,including increasing levels of state int

225、ervention and radical approaches to ownership of the means of production.However,none of these are successful on a large scale.Impact on the source/make/protect/sell model-Source.Customers have adapted their demands to consume more local,seasonal produce and less meat in developed countries.Recyclin

226、g of manufactured goods,especially electronics,is on the rise at a local level,partially relieving pressure on sourcing battery components and microchips.Unable to invest in adaptation due to a lack of finance,businesses must substitute ingredients(e.g.,rice for wheat),discontinue product lines or f

227、eatures(e.g.,natural vanilla extract disappears),or alter the performance of products.-Make.Innovation in manufacturing is frugal,focusing on design-to-cost(as consumer expectations become more basic)and optimizing productivity.Major changes to manufacturing processes cant be financed,so any product

228、ivity improvements remain marginal and piecemeal.Any productivity gains are threatened by losses from climate hazards,especially for those industries that consume a lot of water(chemicals,nuclear)or whose processes are temperature-and humidity-sensitive(pharmaceuticals).At the same time,scrutiny fro

229、m climate-conscious customers grows,imposing reputational constraints on operations.-Protect.Many industrial assets remain uninsured,causing regular interruptions to production while they are fixed.Advanced warning systems are increasingly used,while businesses rely on crisis management measures to

230、limit damage.Entire geographies,including former manufacturing hubs,become unattractive for the deployment of new assets,while nature-based solutions(e.g.,planting mangroves to combat freshwater salination)become increasingly attractive due to their low cost.-Sell.Scrappy ventures offering lower-cos

231、t solutions for“strategic adaptation,”or damage mitigation thrive,such as companies providing inflatable solutions to keep inventory dry when warehouses flood.Maintenance/repair services flourish,occasionally supported by robots/drones that can operate in challenging weather conditions.Recycling is

232、supported by consumers,partially solving material scarcity issues,but a lack of financing prevents fully fledged,large-scale circular economies from developing.The wellness and healthcare industries grow by helping humans prevent and treat conditions caused by climate change(e.g.,heat stroke and new

233、 epidemic diseases).Frugal innovation finds inspiration in traditional/ancestral techniques(e.g.,using adobe or cut stone for construction).The consumption of digital services has evolved,with more efficient AI models developed to reduce the energy costs of computing and storage.45Green Communities:

234、Sowing sustainable seeds for successIt is 2040,and the food and beverage industry is one of the first sectors to be significantly impacted by climate change.Volatile crop pricing and performance,frequent shortages,and disrupted value chains are causing major challenges.Consumers have largely adapted

235、 to the new climate reality partly by choice,partly due to price constraints and are pulling through new product trends and climate-related requirements,in particular an increased focus on food miles or embodied carbon.Consumer preferences are driving a move away from carbon-inefficient uses of land

236、,such as extensive cattle farming for beef and dairy.Meanwhile,moves to decouple food production from climate threats are stalling,as the large-scale funds necessary for technologies such as indoor farming remain limited.How will the food and beverage industry survive this tension?At least four leve

237、rs stand out:(1)partnerships along value chains,(2)climate-conscious product development,(3)synthetic biology(SynBio),and(4)increased responsiveness to fragmented consumer trends,including new ways of using land,crops,and animals(and how we value them).Unlike the pharmaceutical industry,the food ind

238、ustry is not a monolith but a complex,global network of people and organizations.Lack of funds for large-scale solutions can be remedied,partially,by careful collaboration across players in agrifood value chains.These relationships,particularly between large processors and farmers,like the Cargill R

239、egenerative Agriculture Program launched back in 2019,need to mature to ensure resilience in the face of climate change and are only possible where direct relationships between the producer and user have been cultivated.Data sharing and analysis along the supply chain plays a crucial role in allowin

240、g retailers and consumers to make climate-positive choices.By 2040,this means the free and open sharing of complete information on growing practices,processing steps,and shipping and transport history for all ingredients,based on automated systems at every stage in the supply chain.1“Food miles”refe

241、r to the distance over which food is transported before it reaches the customer(including ingredients of processed foods).Product development is also a key lever for adaptation to climate change.Companies must adjust their recipes to locally available ingredients,especially when customers request in

242、gredients with low or zero“food miles.”1 Substitution may be achieved by identifying third-party manufacturers with similar formulations to safeguard against short-term ingredient shortages rather than changing existing recipes and lines.Regardless,such changes require a robust supply quality assura

243、nce system,which invokes further supply chain regionalization.Under this paradigm,increasing“air miles”to source ingredients that meet requirements(e.g.,flying Kenyan green beans to Europe for freshness)is no longer an option.(For more on this topic,read the ADL Viewpoint“Strengthening Resilience in

244、 Food&Beverage Product Development“.)Climate changeinduced shortages brought about by droughts or extreme weather events(e.g.,Californian almonds in 2022 or Canadian mustard seeds in 2023)demonstrate the need for food and beverage companies to be proactive in securing resilient supply chains.As drou

245、ghts and storms become more intense and frequent,these shortages pose even greater challenges.SynBio,currently used in the pharmaceutical industry,could trickle down to the food industry as costs decrease and scale increases.Gene editing could accelerate breeding,particularly for high-value crops li

246、ke drought-resistant tomatoes.Biotechnology companies such as Pairwise,Tropic Biosciences,or AgBiome are at the forefront of such developments but face regulatory hurdles in the short term and funding challenges in the Green Communities projection.In a more fruitful turn of events,one could see the

247、development of a“return to roots”with the reintroduction of heritage vegetable and fruit varieties,once outcompeted on productivity,price,homogeneity,or(occasionally)taste,but now hailed for their climate-resistant properties,such as the drought-tolerant Hopi corn in the Southwestern US.Blue Shift /

248、REPORT 00646Although consumers are adapting to climate change,aggregate behavior is nuanced and seemingly contradictory in parts.While the trend toward reduced meat consumption is expected to continue well into the 2040s for environmental and economic reasons,it may bring less anticipated effects al

249、ong with it.A continuation of the somewhat counterintuitive trend of“permissive indulgence”(where people consume more“pleasure foods”like chocolate biscuits and cookies)is to be expected.As meals get less interesting and people look elsewhere for delight,the demand for indulgent snacks grows,support

250、ing the segment for packaged goods companies.To thrive in the indulgence-snacking world,however,producers must be up front about their climate impact and nudge consumers toward more choices that promote climate adaptation and mitigation,including“net zero ingredients.”2 Given the demand for adaptive

251、 products,food producers up and down the value chain must evaluate their forward-looking capability set,ensuring their supply,operations,R&D,regulatory,supplier assurance,and quality teams are all up to the task of refactoring products and logistics to compete in the future landscape.ADL has support

252、ed businesses in the consumer package goods and specialty ingredient space to evaluate the critical build-make-buy decisions for future-proofing the business,with sustainability and decarbonization standing as core pillars of future strategies.Identifying key strategic partnerships and instituting i

253、nnovation ecosystem approaches may be the most cost-effective approach to changing the system.Simon Norman,Manager,Technology&Innovation Management Practice,ADLPhil Webster,Partner,Technology&Innovation Management Practice,ADL2“Net zero ingredients”are ingredients for which an overall balance is ach

254、ieved between the GHGs they create and the emissions removed from the atmosphere(e.g.,through the plantation of trees or other systems that sequester carbon from the air).The food industry is not a monolith but a complex,global network of people and organizations.47Blue Shift /REPORT 006Projection 2

255、:Lonely at the Top A handful of leaders are investing heavily in adaptation,imposing drastic changes on their entire value chain,which often struggles to keep up.As a result,actors with fewer resources make compromises,cutting corners on quality or price.Ultimately,this affects the leaders themselve

256、s and their reputations.To explore this issue,we focused on a lawsuit against a giant in the SynBio industry and the revelations about the involvement of one of its suppliers.48How did we get here?Forward-looking companies with cash reserves have prepared for the future,betting on a much broader soc

257、ietal and economic move toward adaptation.However,most consumers have not kept up with that trend,largely due to competing priorities,such as rising inequality and higher living costs.The international economyGlobalized supply chains and the international division of labor continue,albeit disrupted

258、by geopolitical conflicts and climate change impacts.Manufacturing hubs migrate to less vulnerable locations within countries,away from coasts and typhoon-prone regions.Some industrial relocation to developed countries takes place,aided by generous government subsidies.SocietyRegarding many social s

259、tructures such as labor,education,care,and family a two-speed society emerges.Ecosystems organized around powerful,global supply chains transform fastest:large industrial hubs and cities are reengineered to limit heat,build shelters,and protect mobility.Working hours are adapted both for these urban

260、 employees and their children at school,who also receive preventative healthcare.At the same time,communities on the periphery of global trade,especially in rural areas,do not undergo significant change.Winners&losersThere is major consolidation in pharmaceuticals,automotive,electronics,and consumer

261、 goods industries like fashion and personal care as only those firms with the money to invest in adaptation survive.Leading companies reap the benefits of their adaptation investments and have locked in their suppliers,thus gaining a competitive advantage.Cultural shiftIn developed countries,there i

262、s a growing cultural polarization between those who embrace a shift in norms,lifestyle,and consumption habits and those who resist that shift further feeding the“culture wars.”Impact on the source/make/protect/sell model-Source.Customer demand for goods made from rare raw materials including critica

263、l metals(lithium,cobalt,tellerum),rare earths,and crops(bananas,cocoa)has remained high.In particular,the fruit,meat,and dairy industries have been compelled to maintain their product range despite rising pressures from climate change.Ingenious ways to procure these crops bloom,such as with vertical

264、 farming.There is a growing lobby for SynBio to be applied in agriculture to help grow resilient species while meeting the unchanging preferences of consumers.-Make.Constraints on manufacturing operations and processes in many sectors(automotive,electronic goods,pharma,food and beverage)have increas

265、ed.Manufacturers must develop resilience in the face of power cuts and resource/workforce shortages,as well as challenging working conditions,such as extreme heat.When it comes to products,manufacturers have to compromise on other metrics,including quality and price,leading to brand reputation issue

266、s.Other manufacturing sectors that are globally integrated,such as construction and defense,continue to prioritize productivity and profitability,while services(including personal care,education,hospitality,and transportation)provided locally are not subject to the same pressures and are therefore s

267、lower to adapt.-Protect.Leading businesses have mandated that their partners and suppliers assets be protected or insured against the main climate risks.Those companies unable to comply are no longer in business,including many in previously manufacturing-heavy regions in South/Southeast Asia and Cen

268、tral America.-Sell.Disconnects between companies visions and customer preferences have led to commercial failures,such as Teslas amphibious car,making firms wary of disruptive product innovation.In a world of fragmented demand,players benefit from serving strong affinity niches,such as red meat eate

269、rs.Solutions that can help sense contradictory demand signals in an accurate and timely manner therefore become extremely valuable.Blue Shift /REPORT 00649Lonely at the Top:The promise of SynBioIn 2040,the leading global life sciences companies are“lonely at the top.”They have invested earlier than

270、others into R&D for SynBio,as well as for components not usually produced in a fermentation setting.As supply chain disruptions and extreme weather events endanger global supplies of natural drug ingredients and raise the costs of raw materials,they remain resilient to shocks,further enhancing their

271、 competitive advantage.Those impacted by the growing disruptions of climate change have no choice but to adapt,and one sustainable approach to doing so is by implementing SynBio.The ability of SynBio to provide substitutes for climate-vulnerable ingredients has been demonstrated since the early 2000

272、s.Since its foundation in 2003,California biotechnology start-up Amyris has used SynBio to produce artemisinin,the active pharmaceutical ingredient in antimalarial drugs.Artemisinin is traditionally derived from the sweet wormwood plant,a wetland plant whose distribution area will be negatively impa

273、cted by rising global temperatures.1 By engineering yeast to produce artemisinin,Amyris has been able to create a more stable and sustainable source of this critical drug component.In a world of flooding and warmer waters that drive increases in malaria cases(+5 million cases;i.e.,+2%globally from 2

274、021 to 20222),SynBio helps address pandemic risk by providing climate-resilient alternatives for effective treatments.In 2019,Roche partnered with Boston,Massachusetts-based Gingko Bioworks to develop a more sustainable production method for oseltamivir phosphate,the active ingredient in its antivir

275、al drug Tamiflu,a critical and widely used drug for the treatment of Influenza A and B.Oseltamivir phosphate is currently derived from shikimic acid,which is extracted from the Chinese star anise plant.This plant is vulnerable to climate change,and its supply has been affected by extreme weather eve

276、nts,including the 2010 droughts in Guangxi and Yunnan.By engineering bacteria to produce shikimic acid,Ginkgo Bioworks aims to create a more reliable and sustainable source of this essential drug component,helping to ensure Tamiflus continued availability.1 Wang,Danyu,et al.“Global Assessment of the

277、 Distribution and Conservation Status of a Key Medicinal Plant(Artemisia Annua L.):The Roles of Climate and Anthropogenic Activities.”Science of The Total Environment,Vol.821,May 2022.2“World Malaria Report 2023.”World Health Organization,30 November 2023.3 Meige,Albert,et al.“The Brave New World of

278、 Synthetic Biology.”ADL Blue Shift Report,2024.Other life science giants have shown interest in SynBio research as well.In 2018,Bristol Myers Squibb entered into a research collaboration with the biotechnology company Synthorx to develop novel immunotherapies using Synthorxs SynBio platform.This pla

279、tform,called the“Expanded Genetic Alphabet,”allows for the incorporation of non-natural amino acids into proteins,which can potentially lead to the development of innovative therapeutics with improved properties.In 2020,Pfizer participated in a$300 million funding round for Zymergen,a company that u

280、ses machine learning(ML)and SynBio to engineer microorganisms for the production of various chemicals and materials.Previous investments in SynBio biology pay dividends in shielding life science companies against future disruptions in supply and skyrocketing ingredient prices.They also hold much pro

281、mise as a competitive edge in developing a wide range of new products with sought-after properties,sustainably and at an attractive cost.The SynBio market grew at 20%per annum to 2030 overall,3 driven by sustainability concerns but also by healthcare needs,demands for manufacturing efficiency,and(on

282、 the supply side)increasing investment,low technology costs,and growing ecosystems.The benefits and potential gains that SynBio offers are clear.However,companies must have a well-defined strategy in place to successfully implement it.Key considerations are investing in the right technologies for sc

283、ale-up and cost-efficiency and ensuring sufficient production capacity.Given the diversity of SynBio,companies should carefully consider which specific fields are relevant for their business and conduct realistic market-based assessments.With an ever-increasing acceleration in technology development

284、s,timing is a further key consideration.(For more about SynBio,see the ADL Blue Shift Report“The Brave New World of Synthetic Biology.”)Dr.Ulrica Sehlstedt,Global Practice Leader,Healthcare&Life Sciences Practice,ADLDr.Franziska Thomas,Partner,Healthcare&Life Sciences Practice,ADLBlue Shift /REPORT

285、00650 Moro,Princess Mononoke“The Forest Spirit gives life and takes life away.Life and Life and death are his death are his alonealone.”51Blue Shift /REPORT 006Projection 3:Wild Green West In a world without regulations to ensure coordination and alignment,well-intentioned adaptation initiatives oft

286、en collide and can become counterproductive,or worse.To illustrate this tension and highlight the potential consequences,we chose the format of investigative journalism.The fiction unveils a local scandal centered on a crucial issue:water management.52How did we get here?Governments are still focusi

287、ng on mitigation,with a fear of imposing further heavy costs on industries around adaptation.This has led to a lack of globally agreed-upon regulations/practices to promote or impose adaptation to climate change.We see a market-driven approach to climate change adaptation,with businesses voluntarily

288、 investing to remain competitive.The international economyLeading companies invest in advanced adaptation technologies to protect their businesses from disruption by extreme climate events.In contrast,poorer and more vulnerable regions(e.g.,Southeast Asia)struggle to access investment,due to the lac

289、k of strong institutions with the necessary manpower,data,and know-how to structure bankable adaptation initiatives.Business investment in climate change adaptation shows benefits,but the lack of societal focus on equality and long-term planning results in a lack of coordination and negative externa

290、lities.Such costs not only burden communities but also impact private companies,hindering overall progress toward sustainable and inclusive growth.SocietyA growing split emerges between generations:one prioritizes innovative new ways of living,while the other strives to maintain traditional lifestyl

291、es.Reliance on international and national government support diminishes,with private sector companies,regions,and local communities taking more of the initiative.Winners&losersDue to a lack of regulation,sectors that are strategically important(e.g.,agriculture,energy,and coastal real estate)or have

292、 higher economic returns receive more investment than others,leading to crucial areas like biodiversity and public safety being neglected.Cultural shiftThe overwhelming focus on creativity as a catalyst for technological progress,in the absence of robust regulation,has led to ethical dilemmas and de

293、bates over moral standards.The consequences of unchecked innovation could have devastating effects,reshaping cultural and political mentalities.Impact on the source/make/protect/sell model-Source.The race to secure resources drives innovation in supply chain management but also prompts concerns over

294、 resource monopolization and environmental degradation.Companies invest in desalination infrastructure to secure water availability as well as local grids to secure productivity.With support from local funds,larger agricultural businesses invest in adaptation technology,such as precision irrigation,

295、vertical farming,and sensors for monitoring.-Make.We see creative adaptations in manufacturing processes to enhance their efficiency and productivity,mainly within sectors with high raw material and/or electricity costs,such as heavy industries,automotive,and metal/chemical production.With higher ra

296、w material prices,manufacturing companies need to focus on cost optimization in their production lines(e.g.,by reducing machine time,increasing standardization,and improving resource efficiency).-Protect.Companies invest independently to protect their assets,leading to a wide range of solutions with

297、 varying degrees of effectiveness,such as predictive weather tools and the use of advanced materials.Nature-based solutions,where ROI is challenging to quantify,are less likely to be supported by traditional financial strategies.-Sell.Industries directly engaged in adapting to climate impacts thrive

298、 and introduce new goods and services.For example,the construction industry specializes in resilient building technology,the water management industry focuses on water conservation/recycling,while agriculture develops drought-resistant crops and precision farming techniques.Blue Shift /REPORT 00653W

299、ild Green West:Integrating mobility into the energy ecosystemBy 2040,the individual mobility industry,driven by private investment and minimal regulation,has continued to innovate,achieving enhanced performance,fuel efficiency,and the development of new vehicles for alternative fuels.Zero-emission v

300、ehicles,primarily electric,then hydrogen,make up most of the market,comprising 50%-75%of sales.However,in regions where natural disasters and energy supply disruptions are increasingly common,fuel choices face heightened scrutiny.Alternative fuels present different trade-offs in terms of fuel access

301、,fire risks,and vehicle-to-grid(V2G)power capabilities.As weather emergencies become more frequent,access to fuel is crucial for maintaining daily mobility.Electric charging stations are expected to proliferate,forming dense networks in developed countries.However,events like Hurricane Sandy in 2012

302、,which rendered 15%of electric charging infrastructure in affected areas of the Northeastern US inoperable due to outages and flooding,are becoming more frequent.Electric vehicles(EVs)offer unique benefits in emergencies,such as powering local grids or hospital generators for a short period of time.

303、During the 2019 California wildfires in the US,Pacific Gas&Electric(PG&E)used Tesla Powerwall batteries,on which the maximal-charging“Storm Watch”mode had been activated,to supply temporary power to affected communities.1 Similarly,V2G charging helps deliver electricity in the event of weather-induc

304、ed blackouts.The city of San Diego,California,is experimenting with a pilot program to enable bidirectional charging with school buses.2 PG&E CEO Patricia Poppe has supported V2G charging to prevent blackouts,bolstering efforts by General Motors to add this capability on most of its vehicles,which i

305、t provided early on Fords F-150 Lightning.31 Lambert,Fred.“Tesla Activated Storm Watch for Hundreds of Powerwall Owners over California Fires.”Electrek,11 June 2019.2“Current V2G Projects.”San Diego Gas&Electric(SDGE),accessed May 2024.3 Melendez,Lyanne.“PG&E CEO Proposes Using Electric Cars to Send

306、 Power Back to Grid to Prevent Blackouts.”ABC7 San Francisco,8 August 2023.4 Weil,Gina.“Data Shows EVs Are Less of a Fire Risk than Conventional Cars.”Fairfax County,Virginia,Office of Environmental and Energy Coordination,12 February 2024.Volatile weather events,including floods,extreme temperature

307、s,and wildfires,present trade-offs for alternative fuel vehicles.Extreme temperatures can cause batteries to degrade more quickly and require energy for temperature regulation,reducing driving range and efficiency.And while EVs tend to be less fire-prone than their conventional or hybrid counterpart

308、s(the US National Transportation Safety Board reports that EVs have been involved in approximately 25 fires per 100,000 sold in the US compared to 1,530 gasoline-powered and 3,475 hybrid vehicles4),fires in EVs are more challenging to extinguish.High-voltage lithium-ion batteries are at risk of ther

309、mal runaway,leading to intense,prolonged fires with pollutants and reignition risks.Hydrogen cars are more resilient to fires,as hydrogen is lighter than air and burns at a lower radiant than gasoline,reducing sustained fires and secondary fire risks.However,hydrogen cars present a(low)risk of explo

310、sion at critical concentrations of air and hydrogen.Moreover,hydrogen flames tend to be harder to detect,complicating emergency response efforts.As a result of these trade-offs,the most resilient fleets by 2040 will employ a mixed-vehicle strategy.Large public and private fleets were early to adopt

311、this approach.For example,Los Angeles and San Francisco committed to greening their fleets with a mix of alternative fuel vehicles,including electric,hybrid,natural gas,and hydrogen.By 2040,the mix has become electric or hydrogen-only,due to Californias zero-emission mandate.The US Army invested in

312、hydrogen fuel cell technology,such as the Chevrolet Colorado ZH2,while the Navy has deployed EVs for on-base transportation and logistics.Amazon ordered 100,000 delivery vans from Rivian back in 2022 as well as testing Daimler Trucks Mercedes-Benz hydrogen fuel-cell trucks in Germany.Blue Shift /REP

313、ORT 00654To build systemic resilience to climate impacts,deep collaboration between EV manufacturers and local grid providers is essential.In 2016,Nissan and Italian utility company Enel launched the first large-scale V2G project in Denmark,integrating EVs into the national grid.The project installe

314、d 10 V2G units at the Danish utility company Frederiksberg Forsynings headquarters,allowing EV owners to connect their vehicles to the grid and sell excess energy during peak demand periods,stabilizing the grid while providing an additional revenue stream for EV owners.Meanwhile,V2G options in the U

315、S garner significant interest for commercial EVs.To prepare for this(and other possible)futures,company leaders must maintain a broad perspective.This includes looking beyond short-term impacts and starting to prepare for the new world as structural changes begin to significantly reshape the busines

316、s environment.It also implies looking beyond obvious trends and reassessing major areas of uncertainty and their implications.Decision makers will need to shape scenarios,make swift no-regret moves,and develop strategic insurance to mitigate unwanted scenarios.This requires embracing uncertainty and

317、 embedding it into decision-making:developing capabilities for scenario development and monitoring of trigger events,adjusting strategic and operational planning and related governance mechanisms,and shaping corporate culture so employees feel empowered to deal with uncertainty.Then,companies will b

318、e able to leverage digital technologies to improve intelligence and increase agility and responsiveness.(For more information on navigating this increasingly uncertain environment,see the ADL publications“Embracing Uncertainty,Driving Growth,”“Electrifying the Future,”“Truck Electrification Profit B

319、ooster or White Elephant?,”“Driving Profitability in US Public EV Charging,”and“The Relevance of EV Battery Swapping in Emerging Markets.”)Florent Nanse,Partner,Automotive Practice,ADLMarc Wiseman,Senior Advisor,Automotive Practice,ADLAs weather emergencies become more frequent,access to fuel is cru

320、cial for maintaining daily mobility.Blue Shift /REPORT 00655Projection 4:Dont Look Up This fiction draws inspiration from newspaper obituaries,but instead of memorializing people,it focuses on companies.This approach highlights the growing number of businesses failing to adapt quickly enough to clim

321、ate change.By borrowing the solemn tone of obituaries,we underscore the urgency and severity of economic losses in a rapidly changing world,calling for swift and decisive action.56How did we get here?Not all consumers are feeling the impact of climate change,meaning those who are not constrained to

322、adapt simply do not.Insurance has not caught up with reality,and public funding for adaptation in developing countries remains limited,while private funding(including private equity)remains largely limited to projects that deliver short-term profits.The international economyCentral banks struggle to

323、 curb inflation as the price of raw materials rises.The international division of labor remains in place,apart from a handful of critical materials(e.g.,semiconductors)subject to state intervention.Local solutions are deployed in climate-vulnerable regions with access to capital(e.g.,the Middle East

324、),but do not spread elsewhere.SocietySocieties remain teetering on the brink of widespread change.Policies that promote both solidarity and climate adaptation have not been developed;hence,resistance to adaptation remains widespread,especially among groups most at risk,including farmers,hospitality

325、workers,those in vulnerable industries or locations,and disenfranchised urban populations.Greater inequality gaps form between those who can afford price increases and those(still in the minority)who must radically change their lifestyles,such as living without a car,thus limiting their mobility.The

326、 disappearance of entire communities,towns,and landscapes due to fires,hurricanes,and rising sea levels creates large-scale trauma and challenging migration flows,both within and across countries.Winners&losersAsset-light companies in the digital space and companies whose manufacturing facilities ar

327、e in low-risk areas reap benefits from being able to continuously produce goods,without interruptions from climate change effects.Companies that have already regionalized their production for regulatory reasons(e.g.,life sciences)or due to transportation constraints(e.g.,manufacturers of large car p

328、arts and construction materials)are more resilient.Manufacturers of commodity consumer goods(e.g.,textiles and plastics)and smaller agricultural producers are immediately threatened.Cultural shiftThe public remains torn between adaptation to climate change and more pressing concerns,such as fighting

329、 rising costs due to inflation.Limited efforts by regulators and some industry leaders are insufficient to move the needle,feeding a sense of hopelessness and frustration.Impact on the source/make/protect/sell model-Source.Smaller agricultural producers not protected by insurance that lack the funds

330、 to invest in protection or optimization improvements face the prospect of major consolidation.Shortages and delays become a given most companies focus on managing disruptions,as they cannot afford to limit them.-Make.Raw material substitution is often needed,requiring machines that can function wit

331、h a broader range of inputs.Only those manufacturers whose industrial processes are very vulnerable to increased climate events introduce new/innovative changes,albeit on a small scale.-Protect.Unable to finance large-scale asset-protection projects,companies focus on limiting/controlling damage fro

332、m the impacts of climate change.Preventative maintenance is also an area of focus to avoid infrastructure and machinery breaking under climate pressures.Greater focus is placed on selecting the right site when purchasing or building a new facility,according to multiple criteria.Data centers,in growi

333、ng demand due to ongoing digitalization,take the prime spots.There is also increased demand for connectivity,with satellite links encouraged over terrestrial connections(fiber,cable)due to lower vulnerability.-Sell.Remaining affordable is the primary concern of many industries producing mid-market products,especially in automotive.A lack of financing mechanisms causes lower readiness in key sector