KARL MOORE – This Is Karl Moore of the Desautels Faculty of Management at McGill University with Talking Management for The Globe & Mail. Today I am delighted to sit down with an American who teaches at Leeds University in the U.K., Timothy Devinney.
Timothy you have been looking at climate change. What is your thinking about climate change and how it might impact the worlds economy?
TIMOTHY DEVINNEY - People don't realize how damaging climate change can actually be, and one way to see this is just to look at history and recognize that most economic activity, be it the United States, Europe, Asia, Australia, South America, Africa is dominantly coastal and if it is not costal it is based on river systems. Where is climate change going to have a big impact?
Well it's going to have a big impact around rising sea levels. Where are those sea levels going to impact first? River systems and costal areas. So what we are going to see is we are going to see over the next 15-20 years is rising sea levels and potential damage and investment going into protecting big areas of economic activity which is not going to be investment which is going into increasing economic activities because it will fundamentally be defensive.
So I think there is a vulnerability around the nature of global growth and that vulnerability is coming at a very bad time. There is an aging population in most areas of strong economic growth, even in areas of developed nations like China. At the same time, we are going to have a restriction in economic growth associated with activities such as climate change as more investment goes into climate defence rather than economic growth.
MOORE – How can we change this system so we will respond in a way to help the world handle climate change more fundamentally?
DEVINNEY - I think fundamentally what you'll see is in some point in time individual nations will start recognizing that the investment in ultimately defensive assets. If you start having Hurricane Sandy's more often, if you start having enormous investments that are necessary in developing river systems or protecting property, it is at that point in time when you will start seeing that the individual actions will align more with the collective actions.
But that may be a kind of too-late phenomenon, by the time the individuals react. So that is why I am a bit more pessimistic on what those outcomes can ultimately be.