Co-Conveners:

John Carberry, Dupont

William Hooke, Department of Commerce

Rapporteur:

Eileen Shea, IGES-CARE

Archivists:

Alissa Schmeltz, NOAA

Greg Unruh, Tufts University

Although small in number, the participants in the Commerce and Industry breakout session represented an intriguing and diverse set of interests, backgrounds and expertise which provided for a dynamic and stimulating discussion. The following pages provide a brief summary of those discussions organized in the context of the set of key points provided by Co-Convener John Carberry to the Forum plenary on the afternoon of November 13.

Opening Presentations

After a round of self-introductions, the breakout session began with short presentations on key issues and individual perspectives from four participants (identified by the Co-Conveners in advance of the Forum to help stimulate debate). These presentations are briefly summarized here because they helped set the direction for discussions during the Commerce and Industry breakout session.

Peter Colket (American Re-Insurance Co.) highlighted some recent statistics related to the vulnerability of the insurance industry to weather and climate-related natural disasters and discussed the importance of recognizing the differences between impacts on individual companies as opposed to assessing overall economic impacts on the industry as a whole. Mr. Colket identified three key stressors for the insurance industry: (1) the consequences of unpredictability (of loss costs) for an industry which "uses the past as a guide;" (2) existing government policies and guidelines which make it difficult for individual companies to develop catastrophe reserves; and (3) the importance of addressing existing policies and behavior which increase vulnerability, such as land use practices in coastal and low-lying areas and building codes.

George Kuper (Council of Great Lakes Industries) highlighted the importance of clearly identify industry as a participant in the assessment process and an intended audience for national assessment reports. In discussing past and current difficulties in engaging industry in the National Global Change Assessment process, Mr. Kuper noted three key considerations ("huge stressors"): (1) the pending Framework Convention for Climate Change negotiations in Kyoto, Japan--noting, in particular, concerns that U.S. negotiating positions recognize issues related to economic competitiveness; (2) presumptions of technology as a "panacea" for mitigation which fail to recognize the natural cycle and costs of technological investments; and (3) an apparent focus on mitigation measures (such as emissions controls) without sufficient attention to adaptation measures (such as carbon dioxide sequestration). Mr. Kuper concluded his opening remarks by summarizing the differential impacts of climate change for four categories of industry: (1) non-fossil-fuel-intensive companies for which the climate change issue raises opportunities; (2) industries which are already pursuing carbon dioxide emissions reductions for economic purposes; (3) industries whose operations will be directly and severely impacted by climate change or climate change mitigation policies (e.g., utilities); and (4) a wide range of companies who may have good ideas but whose options are limited.

John Carberry (DuPont) provided some perspectives from the chemical industry, noting that he was speaking from the perspective of the large, diversified, multi-national component of the chemical industry. Dr. Carberry described a set of overarching "stressors" which, while independent of climate change, will affect the industry's response to the climate change issue:

• a sometimes adversarial relationship between the general public and the chemical industry based on past environmental concerns;
• the need to maintain stable economies and provide job opportunities;
• the impact of foreign competition; and
• the costs and the time required for developing and implementing new technology.

Setting climate change in this overall context, Dr. Carberry noted that climate change raised a number of issues for the chemical industry, including: (1) concerns over treaty negotiations which might produce differential cost-incentives for different geographic regions--resulting in a shift in operations; (2) the value of lessons-learned from an industry which is physically-robust in terms of its ability to address the direct impacts of climate change (e.g., they have experience and expertise in stabilizing operations in regions subject to natural hazards such as hurricanes); (3) the potential role of the chemical industry in developing new technologies to support mitigation and/or adaptation measures; and (4) concerns over crisis-driven responses to an "issue of the moment" rather than basing actions on a thorough assessment of vulnerabilities, causes and solutions.

William Hooke (Department of Commerce) then provided some thoughts from the perspective of a Federal agency whose mission includes supporting commerce and industry as well as monitoring and predicting changes in the natural environment (including weather and climate). Dr. Hooke suggested that any efforts to assess the consequences of climate change and develop effective response options would benefit from an approach which recognizes the dynamic nature of both the physical (climate) and socio-economic (human) systems we are trying to understand and address. Rather than conducing static assessments of the impacts of changing climate on today's industrial operations, for example, the leaders, sponsors and participants in the National Global Change Assessment process might consider their role in enhancing the responsiveness and flexibility of industry to a highly-variable climate system. In this context, Dr. Hooke highlighted three key points: (1) the value of enhancing resilience to weather extremes and year-to-year variability; (2) the need to identify and monitor key indicators of critical economic and environmental conditions; and (3) the importance of frequent evaluation of changing conditions throughout the assessment process.

Key Findings

The initial round of introductions and presentations (and associated discussions) highlighted the fact that industrial representation at the Forum was relatively small. The issue of effectively engaging industrial interests as true partners in the National Global Change Assessment process served as an underlying theme for the Commerce and Industry breakout session discussions. Based on these discussions, the participants provided a number of suggestions designed to enhance the role of private sector commercial interests, including:

• recognize the critical role that industry partners should have in both the design and implementation of the assessment process and as users of the resulting assessment reports and information products. In this context, the participants suggested that a review of formal assessment literature and past experience would be beneficial in the early stages of the National Global Change Assessment;
• start the process of engagement by asking industry partners to identify their information needs and integrate those needs into the National Assessment Process. In this context, for example, the participants suggested that the Assessment leadership consider a focus on markets as well as the more traditional sectoral analyses used in most scientific assessments;
• recognize the need to "measure the right things" including identifying and monitoring some critical economic and business measures as well as direct impacts of climate variability and change on physical and natural systems
• design and conduct the assessment process so that it helps industry partners identify and capitalize on opportunities to design trade and business practices which provide the flexibility required to accommodate climate variability and change (e.g., using new scientific insights on seasonal-to-interannual climate variability such as El Niño to build resilience to extremes and capitalize on market opportunities); and
• ensure that the National Assessment process provides appropriate mechanisms to sustain a long-term, interactive dialogue among participants and continuously evaluate the effectiveness of the assessment process as well as progress toward solutions.

The breakout session participants felt that it would be beneficial to explicitly use the National Global Change Assessment process to move toward solutions in a spirit of shared coping rather than merely identifying problems and/or affixing "blame." In this context, the discussion suggested that the National Global Change Assessment process should:

• clearly identify vulnerabilities, causes and coping options--including corporate as well as natural system vulnerabilities;
• address adaptation as well as mitigation measures and options;
• recognize and address the impacts of response strategies and policies as well as direct climate impacts;
• recognize the need to address issues of economic competitiveness in evaluating potential response strategies; and
• facilitate the dissemination of information which allows individuals and companies to capitalize on existing technologies and programs to mitigate and/or adapt to climate change and to do so in a way that allows them to plan and to account for the timing and costs of developing new technology required to implement mitigation and/or adaptation solutions.

The breakout session participants felt that it was important for the leaders, sponsors and participants in the National Global Change Assessment process to recognize differences among industries, including:

• important differences between small, local firms vs large, diverse multi-national corporations; and
• issues related to differential exposure to direct climate impacts (e.g., water-intensive industries) and differential impacts of response strategies and policies (e.g., the impact of emissions controls on utilities).

In this context, the breakout session participants briefly discussed the possibility of an initial focus on a small number of key industrial sectors which might serve as "bellwethers" of the impacts of climate variability and change. These industries could be selected because: (1) the direct impacts of climate variability and change on their operations are clearly recognized; (2) changes in their operations can have broad consequences for other sectors; and/or (3) their operations will be particularly sensitive to policy or regulatory changes associated with mitigating climate change. In addition to reinforcing the importance of agriculture and forestry in this context, the Commerce and Industry breakout session participants also identified transportation, energy supply/utilities, recreation and insurance as possible candidates for early attention in the National Global Change Assessment.

Throughout the breakout session, participants raised a number of issues related to the challenges and opportunities of the National Global Change Assessment process as a mechanism for communication and education. In this context of the National Global Change Assessment process as a mechanism for transforming scientific results into understandable, usable and useful information, the breakout session participants offered the following thoughts:

• an early and clear understanding (and articulation) of the purpose and outcome the National Global Change Assessment process is essential. In this context, the participants highlighted issues related to: asking intended users to identify their information needs and clarify their vulnerabilities; clearly articulating both the message and the messenger when designing reports or other information products; and remembering the importance of both products and process;
• the National Global Change Assessment process could enhance our understanding of individual, corporate and government responsibilities and opportunities; and provide opportunities to evaluate and revise existing policies and regulations that increase vulnerability or hinder capabilities to respond to climate variability and change (e.g., building codes, insurance policies and purchasing practices).

While recognizing that there were many more interesting issues to be discussed, the Commerce and Industry breakout session then concluded with a review of the key points which Co-Convener John Carberry would use in summarizing the group's deliberations for the afternoon plenary. A list of the participants in the Commerce and Industry breakout session is attached.