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Facing Inevitable Climate Losses, U.S. Corporations Begin to Adapt

Plans by Entergy and Starbucks show how adaptation is now key for firms with vulnerable supply chains, but experts lament that more of them aren't moving

By Lori Tripoli

Feb 14, 2011

As climate change worsens, some leading U.S. corporations are working to find ways to adapt to higher sea levels and other unavoidable effects fueled by warming that they say will deal a big blow to their bottom lines.

Most firms have kept their plans under wraps. But publicly known efforts reveal how adaptation is taking center stage for businesses with vulnerable supply chains, amid mostly feeble attempts by the world's largest carbon polluters to cut greenhouse gas emissions.

"It creepingly has become apparent that even if mitigation were highly successful — which so far it's not — we'd still have lots of climate impacts," said Armando Carbonell, senior fellow and chair of the Department of Planning and Urban Form at the Cambridge, Mass.-based Lincoln Institute of Land Policy.

"We have to adapt," he told SolveClimate News.

Energy giant Entergy Corporation would seem to agree. On Tuesday, the utility will announce an adaptation project with New Orleans-based nonprofit America's WETLAND Foundation and government officials from Alabama, Louisiana, Mississippi and Texas. The collaboration seeks to help a dozen communities along the U.S. Gulf Coast gauge their vulnerabilities to climate change, and establish plans to deal with the impacts.

Entergy, a Fortune 500 utility and the nation's second-largest nuclear energy provider, delivers power to nearly 3 million customers across most of Louisiana and Arkansas, and parts of Mississippi and Texas.

"Our service area is particularly vulnerable to the impacts of climate change," said Brent Dorsey, director of the firm's corporate environmental programs, adding that "electric systems do not do real well under water."

'Before it Gets to Be a Crisis'

"We ought to start working to come up with adaptive solutions before it gets to be a crisis," he told SolveClimate News.

Val Marmillion, managing director of America's WETLAND Foundation, said Entergy's adaptation goals are not about politics, but economics.

"We're in the reality, and not into the debate," Marmillion told SolveClimate News, referring to ongoing skepticism by some in Washington about whether climate change is a man-made crisis. We "are not treating climate or sea-level rise as a political issue."

"The Gulf Coast is deteriorating at a very rapid rate," he continued, putting communities in the region in danger. Marmillion attributes the downfall to what he calls a trifecta of problems: the severe decline of wetlands, the muddying of the Mississippi River and an accelerated rise in sea levels from global warming.

Last fall, America's WETLAND Foundation released an Entergy-sponsored analysis showing that the Gulf Coast region could suffer more than $350 billion in economic losses over the coming decades from climate damage.

According to Dorsey, Hurricane Katrina was a major wake-up call to the utility. Two of the company's natural gas power plants drowned under water, though its nuclear facility in Louisiana, located north of the city on higher ground, was spared.

Entergy's corporate headquarters in New Orleans was shut down for 10 months following the disaster, and it ended up building temporary tent cities for some of its contractors and employees. "We had a temporary relocation until the city was back to normal enough to be able to support business," Dorsey said.

As an immediate adaptation response, the utility has geographically dispersed its operations to avoid a similar disruption in the event of another extreme weather event, Dorsey explained.

Starbucks: Coffee Farms 'Vulnerable'

For its part, Seattle-based coffee titan Starbucks is worried about a major warming-related supply disturbance in a decade or two in areas where its beans are grown, said Jim Hanna, director of environmental impact and global responsibility at Starbucks.

"Regions where our coffee comes from are most vulnerable to the impacts of more immediate climate change," he said. Climate-related threats to bean production include increased flooding, droughts and erosion, and greater pest infestation.

Growing good coffee beans is like developing a fine wine, Hanna told SolveClimate News in an interview. Changes in microclimate can have an impact on the caliber of the bean, and already some farmers have begun moving their farms to higher altitudes to maintain quality, he said.

In vulnerable coffee-growing areas in Mexico and Indonesia, Starbucks has partnered with Arlington, Va.-based Conservation International to work on ways to handle weather variability.

"Arabica coffee production requires well-defined dry and wet seasons, and changes to rainfall patterns may impact yields," said Terry Hills, technical adviser on climate change adaptation for Conservation International. Higher temperatures during critical growth periods can also reduce yields.

"Some of our project sites appear to be facing challenges typically associated with increased climate variability and change," Hills told SolveClimate News, citing the significant landslides that occurred in Nueva Columbia in Chiapas, Mexico, last September.

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