People who attended the Hinterland Music Festival this summer spent a day outside watching performances in 106-degree heat.
With climate change, extreme weather events are becoming increasingly common, and extreme heat is part of the package. Some people are coming up with creative — and sometimes expensive — ways to cope. IPR’s Lindsey Moon revisits the Hinterland music festival to find out about one of those.
We’ll also find out what extreme heat does to our bodies and what we can do to protect ourselves, plus the connection between climate change and public health and why extreme heat disproportionately affects some communities more than others.
Guests:
Joe Sciarrotta| co-owner of Hawkeye Medical Services
Michell Sciarrotta| co-owner of Hawkeye Medical Services
Mackenzie Udelhoven | nurse
Hans House | MD, MACM, FACEP, Professor, Department of Emergency Medicine
Lina Tucker Reinders| Executive Director Iowa Public Health Association
Deadly floods in Pakistan, record-breaking heat waves in China, famine-causing droughts in parts of Africa, and unusually hot temperatures in the U.S., Europe and Australia: The impact of human-induced climate change is being felt across the world, with experts warning that extreme weather events are no longer the exception but rather becoming the new norm.
“In an unrelenting cascade of heat waves, forest fires, flash floods, multiple glacial lake outbursts, flood events and now the monster monsoon of the decade are wreaking nonstop havoc throughout the country,” Pakistan’s Federal Minister for Climate Change Sen. Sherry Rehman said Saturday as Islamabad declared a state of emergency in response to the “serious climate catastrophe” affecting the South Asian country.
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When record-breaking heatwaves cause train tracks to bend, airport runways to buckle, and roads to melt, as has happened in the United Kingdom this summer, it is likely that business performance will suffer. The frequency of these climate events is increasing, as is heat intensity, and companies clearly are not immune to the need to adapt, though their silence might make you think otherwise. Given that the problem is not going away, businesses will need to better manage extreme climate risks – but are investors sufficiently informed on the economic toll caused by the increasing frequency of extreme weather? It is becoming clearer that extreme heat can have devastating and costly effects.
Keeping cool, transporting goods, and scheduling flights as runways melted were just some of the challenges people – and businesses – have faced during the current European summer. As it became apparent that our workplaces and infrastructure might not be able to cope with extreme heat, we also saw unions call for workers to stay home. But could workers take the day off? The UK’s Health and Safety Executive stated, “There is no maximum temperature for workplaces, but all workers are entitled to an environment where risks to their health and safety are properly controlled.”
Are these rules sufficient in this new normal? Some EU countries already have upper limits, but many do not. The Washington Post reported last summer that U.S. federal action might be coming due to concerns over extreme heat for workers. While media reports have highlighted the toll of extreme climate events on workers and businesses, including in the retail sector, as companies’ sales have suffered as a result of unseasonably warm weather, there is little empirical evidence on the financial impact it can have on business. Here is where our research comes into play: How much of an impact does extreme heat have on business profitability?
Heat hitting the bottom line
We focused on the European Union and the UK because the region has a diversity of climate and weather extremes. They are a major economic force, with strong policies on decarbonizing their economies, but also rely on coal, gas, and oil for many sectors. When it is hot, these countries are forced to burn more fossil fuel to cool overheated populations, contrary to the need and desire to do the opposite.
With detailed records on heat events at a local level, we connected weather data to a large sample of private and public companies in the EU and the UK. We focused on two critical aspects of a firm’s financial performance around a heat spell (at least three consecutive days of excessive heat): The effect on profit margin and the impact on sales. We also examined firms’ stock performance, and found that businesses do, in fact, suffer financially, and the effects are wide ranging.
For the average business in our sample, these impacts translate into an annualized loss of sales of about 0.63 percent and a profit margin decrease of approximately 0.16 percent for a one degree increase in temperature above a critical level of about 25*C. Aggregated for all firms in our sample, UK and EU businesses lose almost $614 million in annual sales for every additional degree of excessive temperature.
Impact bigger than the data shows
We also found the intensity of a heat wave is more important than its duration. This financial effect might sound small, but remember, this is an average effect across the EU and the UK. The localized effect is much larger for some firms, especially those in more southern latitudes. The stock market response to extreme heat is also muted, perhaps for the same reason. We find stock prices on average dropped by about 22 basis points in response to a heat spell.
These average annualized effects include businesses’ efforts to recoup lost sales during heat spells and other climate-related events. They also consist of businesses in certain sectors and regions that appear to benefit from critically high heat spell temperatures, such as power companies and firms in northern European countries. While we show a systematic and robust result, our evidence probably further underestimates the total effects of heat waves. That is because businesses disclose very little about those effects due to lax disclosure rules and stock exchange regulations relating to extreme weather.
Financial data part of climate change
Without a doubt, better disclosure will help untangle these effects. Ideally, financial data will be segmented by climate risk and extreme heat dimensions, so investors are better able to price the risk. Regulators need to pay attention here, as investors must be able to price material risk from extreme weather. A good example is New Zealand, which is preparing to mandate climate risk disclosures with reporting periods starting in 2023. Such mandates recognize that poor disclosure of climate risk is endemic, and we do not have the luxury of time. For those businesses negatively affected by climate events, disclosing the number and cost of lost hours and the location of the damage would be helpful. However, it is not yet clear if climate disclosure standards effectively capture these risks, as companies have significant discretion about what to disclose.
It is not necessarily all about cost – some sectors might even benefit. While power companies, for example, might report increased sales from increased energy consumption, they are also constrained by the grid and the increased cost of production. And our evidence suggests there is little overall benefit to the energy sector. This does not rule out some windfall profits, so we need to understand more about both the positive and negative effects on each industry.
Finally, this July saw temperatures in the United Kingdom soar to 20*C above normal. Can businesses cope? Next time you feel the heat, pause to ask if this is also hitting the bottom line of your employer or investment portfolio.
David Lont is a Professor of Accounting and Finance at the University of Otago.
Martien Lubberink is an Associate Professor of Economics at the Victoria University of Wellington.
Paul Griffin is a Distinguished Professor of Management at the University of California, Davis. (This article was initially published by The Conversation.)
Tuesday morning brought another edition of Ripple Effect with the Red River Basin Commission. Don Wiebe, Reeve of the Municipality of Rhineland, is also a Director with the Commission. He joined CFAM Morning Show Co-Host Chris Sumner, in studio, for this week’s program.
The two chatted about the increasing frequency of extreme weather events, using this Spring’s very wet conditions turning dry as of late as a jumping off point for the discussion. You can listen to the entire conversation below.
Online search interest in phrases like “heat wave” hit an all-time peak this summer as record-breaking high temperatures and extreme weather events across the U.S. are increasingly drawing public attention to the climate crisis.
Matthew Carr cools off in the Salmon Street Springs fountain before returning to work cleaning up … [+] trash on his bicycle in Portland, Oregon.
Copyright 2022 The Associated Press. All rights reserved.
Key Facts
According to U.S. Google Trends data, online searches hit an all-time peak in July this year as several cities across the U.S. broke decades-old or all-time temperature records.
With the exception of 2020—when most of the focus was on the Covid-19 pandemic—search interest in the phrase “heat wave” has consistently peaked higher every summer for the past five years.
Extreme temperatures across the U.S. have led to unprecedented droughts in parts of the country and this is reflected in Google Trends data showing searches for “drought” peaked twice in the last five years—in June 2021 and July 2022.
U.S.-wide search interest in the term “floods” for the year 2022 also peaked in the last two weeks as at least four separate regions across the country witnessed once-in-a-millennium floods.
Despite the rising search interest in these extreme weather events, searches for “climate change” in the U.S. has remained largely steady except for a very steep spike on Earth Day in 2022—likely a result of the Google Doodle published on that day.
Globally, however, searches for the phrase “climate crisis’ hit a ten-year high in March as parts of South Asia witnessed a deadly and record-breaking heatwave.
Tangent
As Europe witnessed its own unprecedented heat wave this summer, the region also saw similar search trends. The term “heat wave” hit an all-time peak last month in the U.K. as the country faced its hottest day on record. In France, search for “vague de chaleur” also hit a record peak as the country faced hot temperatures and devastating forest fires. The search term “ola de calor” hit an identical peak in Spain—which reported more than 1,000 heat-related deaths in June.
Key Background
Climate scientists have raised the alarm that the record heat waves hitting parts of Europe and North America may soon become the norm as climate change drives average global temperatures higher. An unchecked rise in temperatures could lead to more severe droughts and even more devastating forest fires. President Joe Biden has called climate change “an existential threat” to the U.S. and the rest of the world. Earlier this week, Senate Democrats passed a landmark bill—which the House is voting on Friday—that will earmark hundreds of billions of dollars for energy and climate programs.
What To Watch For
However, global climate action could be complicated by Russia’s ongoing invasion of Ukraine and rising tensions between China and the U.S. The energy crisis triggered by the war in Ukraine has forced countries like Germany to reactivate coal plants. Angered by House Speaker Nancy Pelosi’s visit to Taiwan last week, China has suspended all climate talks with the U.S.
When record-breaking heat waves cause train tracks to bend, airport runways to buckle, and roads to melt, as happened in the United Kingdom last month, it is likely that business performance will suffer.
The problem is not going away, either. Businesses will need to better manage extreme heat risk. But are investors sufficiently informed on the economic toll caused by the increasing frequency of extreme weather?
While the frequency of these events is increasing, more worrisome is that heat intensity is also increasing. Clearly, businesses are not immune to the need to adapt, though their silence might make you think otherwise.
Rising temperatures affect everything
Keeping cool, transporting goods, and scheduling flights as runways melted were just some of the challenges people and businesses have faced during the current European summer.
As it became apparent that our workplaces and infrastructure might not be able to cope with extreme heat, we also saw unions call for workers to stay home. But could workers take the day off? The U.K.’s Health and Safety Executive stated: “There is no maximum temperature for workplaces, but all workers are entitled to an environment where risks to their health and safety are properly controlled.”
Are these rules sufficient in this new normal? Some EU countries already have upper limits, but many do not. The Washington Post reported U.S. federal action might be coming due to concerns over extreme heat for workers. Mitigation of these factors will no doubt be costly.
While media reports highlight the toll on workers and businesses, there is little empirical evidence on the financial hit to business. Here is where our research comes into play: how much of an impact does extreme heat have on business profitability?
Heat hitting the bottom line
We focused on the European Union and the U.K. because the region has a diversity of climate and weather extremes. They are a major economic force, with strong policies on decarbonizing their economies, but also rely on coal, gas, and oil for many sectors.
When it’s hot, these countries are forced to burn more fossil fuel to cool overheated populations, contrary to the need and desire to do the opposite.
With detailed records on heat events at a local level, we connected weather data to a large sample of private and public companies in the EU and the U.K. We focused on two critical aspects of a firm’s financial performance around a heat spell (at least three consecutive days of excessive heat): the effect on profit margin and the impact on sales. We also examined firms’ stock performance.
We found that businesses do suffer financially, and the effects are wide ranging.
For the average business in our sample, these impacts translate into an annualized loss of sales of about 0.63% and a profit margin decrease of approximately 0.16% for a one degree increase in temperature above a critical level of about 25C.
Aggregated for all firms in our sample, U.K. and EU businesses lose almost US$614 million (NZ$975 million) in annual sales for every additional degree of excessive temperature.
Impact bigger than the data shows
We also found the intensity of a heat wave is more important than its duration.
This financial effect might sound small, but remember, this is an average effect across the EU and the U.K. The localized effect is much larger for some firms, especially those in more southern latitudes.
The stock market response to extreme heat is also muted, perhaps for the same reason. We find stock prices on average dropped by about 22 basis points in response to a heat spell.
These average annualized effects include businesses’ efforts to recoup lost sales during heat spells. They also include businesses in certain sectors and regions that appear to benefit from critically high heat spell temperatures, such as power companies and firms in northern European countries.
While we show a systematic and robust result, our evidence probably further underestimates the total effects of heat waves. That’s because businesses disclose very little about those effects due to lax disclosure rules and stock exchange regulations relating to extreme weather.
Financial data part of climate change
Without a doubt, better disclosure will help untangle these effects.
Ideally, financial data needs to be segmented by climate risk and extreme heat dimensions so investors are better able to price the risk. Regulators need to pay attention here. Investors must be able to price material risk from extreme weather.
A good example is New Zealand, which is about to mandate climate risk disclosures with reporting periods starting in 2023. Such mandates recognize that poor disclosure of climate risk is endemic, and we don’t have the luxury of time.
For those businesses negatively affected, disclosing the number and cost of lost hours and the location of the damage would be helpful. However, it is not yet clear if climate disclosure standards effectively capture these risks, as companies have significant discretion about what to disclose.
It is not necessarily all about cost—some sectors might even benefit. While power companies, for example, might report increased sales from increased energy consumption, they are also constrained by the grid and the increased cost of production.
And our evidence suggests there is little overall benefit to the energy sector. This doesn’t rule out some windfall profits, so we need to understand more about both the positive and negative effects on each industry.
Finally, this July saw temperatures in the United Kingdom soar to 20C above normal. Can businesses cope? Next time you feel the heat, pause to ask if this is also hitting the bottom line of your workplace or investment portfolio.
Citation:
Business can no longer ignore extreme heat events. It’s becoming a danger to the bottom line (2022, August 5)
retrieved 5 August 2022
from https://phys.org/news/2022-08-business-longer-extreme-events-danger.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.
July 20 (Reuters) – The North American Electric Reliability Corp (NERC) on Wednesday said key entities of the U.S. power grid network were working to improve resilience of the power grid network as climate change drives more extreme weather.
The NERC’s “2022 State of Reliability” report said efforts were being made to improve the linkage between outages and weather by the Enterprise Electric Reliability Organization (ERO).
The ERO is made up of the NERC and six regional power entities.
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The U.S. power grid network is also implementing corrective action to avoid a repeat of widespread outages due to a cold snap last year.
“The February cold weather event demonstrated that a significant portion of the generation fleet in the impacted areas was unable to supply electrical energy during extreme cold weather,” the NERC’s report said.
These actions, based on recommendations by the Federal Energy Regulatory Commission (FERC) and NERC among others, would also help to develop standards for longer term grid planning, the NERC said.
The report also highlighted the growing risks from the inter-dependency of electricity and the natural gas industries, which has threatened the reliability of the Bulk Electric System in the past few years. The Bulk Electric System refers to the facilities needed to operate the electric energy transmission network, excluding local distribution.
Natural gas generators are now needed for the reliable integration of renewable power until new storage technology is fully developed and implemented at scale, the NERC said.
“At the same time, reliable electric power supply is often required to ensure uninterrupted delivery of natural gas to these balancing resources, particularly in areas where penetration levels of renewable generation resources are highest.”
The NERC report also flagged risks from geopolitical events, while “increasingly bold cyber criminals and hacktivists presented serious challenges to the reliability” of the bulk electric system.
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Reporting by Rahul Paswan in Bengaluru. Editing by Jane Merriman
Planning for future extreme heat emergencies includes short-term planning and long-term preparation in Oak Bay. Fire Chief Frank Macdonald outlined the district’s approach to council during its July 11 meeting.
More than 700 people in B.C. died last year due to extreme heat events, according to the provincial health authority, with 21 of them on southern Vancouver Island.
In response to those events, Oak Bay Emergency Services staff has been preparing for extreme summer heat events, working to reduce risks to the health and safety of residents.
Over the one-week heat wave, temperatures rose to a peak of over 40 C in many parts of the province. But different regions were impacted disproportionately, Macdonald told council. Island Health and BC Emergency Health Services (BCEHS) in the Capital Region didn’t report the impact other areas saw. For example, Oak Bay Fire Department was not overwhelmed by medical calls to help BCEHS like their counterparts in Vancouver. There the fire department was, at one point, fully tied up in medical calls amid significant ambulance delays, leaving no resources available for fire response.
While the impacts were less severe, Macdonald noted weather scientists predict hotter summers and extreme heat events should be expected.
Heat events are classified as top-down events, meaning local emergency programs follow the lead of the province. Under the BC Heat Alert and Response System launched in June, a dedicated provincial heat committee will issue either warnings or emergency alerts, depending on different temperature thresholds. If a region is expected to see two or more consecutive days with daytime highs and nighttime lows above what is considered normal, a warning will be issued. If temperatures are expected to continue to increase day over day for three or more days, an extreme heat emergency will be declared and Alert Ready may be used. That emergency alert system should be familiar to residents as Amber Alerts and tsunami warnings on television, radio and cellphones.
Local protocols created by the Oak Bay Emergency Program include education, partnerships, communication, block watch, the Greater Victoria Public Library, Oak Bay Volunteers Services and other local governments. The partnerships focus on education, checking in on vulnerable residents during an event, and providing a place to cool for those who need.
In the event of an extreme heat event the air-conditioned common areas of Oak Bay Recreation Centre, Monterey centre and the Oak Bay branch of the Greater Victoria Public Library, serve as unmanned cooling centres. Neighbouring municipalities confirm their cooling centres will be open to Oak Bay residents living in the area.
OBEP plans to share information through a new preparedness guide, presentations at Monterey centre, displays during the monthly night market and both traditional and social media.
LICHTENVOORDE, Netherlands–(BUSINESS WIRE)–ZWARTE CROSS FESTIVAL — Extreme Networks, Inc. (Nasdaq: EXTR), a leader in cloud networking, today announced it will play a significant role in powering the wired and wireless connectivity for the world-famous music, arts and motocross festival, Zwarte Cross, taking place from July 14th -17th 2022 in the Netherlands. The event features more than 250 bands and 34 stages spread across 165 hectares, making it the largest motocross event in the world.
Extreme is working alongside Indicium B.V. and Palo Alto Networks to deliver a highly secure, highly connected experience for both festival organizers and attendees. Extreme’s Wi-Fi 6 access points will provide high-bandwidth connectivity to applications and services, including the 2022 Zwarte Cross festival app. Event organizers will manage the entire network through ExtremeCloud™ IQ, making it simple to proactively pinpoint and troubleshoot network issues. Additionally, using ExtremeAnalytics™, Zwarte Cross will gain better insights into operational efficiencies and attendee preferences, which will help to better customize and improve the festival experience.
Extreme Fabric Connect™, Fabric Attach and ExtremeControl™ will allow the operational teams at the festival to securely connect all of their staff, IoT devices and services. Fabric Connect provides a scalable, resilient network to deploy and operate the 100 IP surveillance cameras across the festival.
Executive Perspectives
Ronnie Degen, Co-founder at Feestfabriek AKG BV at Zwarte Cross
“The network is the invisible headline act of the Zwarte Cross festival – it has to perform in order to provide an optimal experience for our attendees, performers and staff. Festival attendees expect fluid Wi-Fi to capture, share and engage content while at our event. Our IT staff needs to feel confident that the network is secure, functional and that they have real-time visibility into performance. That is why we chose Extreme, Palo Alto and Indicium B.V to partner with us to ensure this event was equipped in a way that made the experience engaging, secure and memorable.”
Patrick DeJong, SE Manager, Palo Alto Networks Netherlands
“Zwarte Cross is one of the most unique festivals in the world, combining music, sport and theatre. We’ve partnered with Extreme to ensure secure wired and wireless connectivity across the entire festival. With more than 220,000 visitors expected over the several days, it’s critical that both festivalgoers and organizers can embrace technology with confidence without concern of breaches and other security issues.”
Henk Bretveld, BENELUX Country Manager at Extreme Networks
“Zwarte Cross is one of the most dynamic events of the year, and because of the magnitude of the event and the number of attendees, connectivity and network performance are paramount to the overall experience. Extreme excels at providing consistent, scalable and secure experiences in high density environments. We’re working closely with the tech team at Zwarte Cross to ensure that we are pushing the boundaries of what is possible, looking at new ways to leverage the network to improve the fan experience and making it easy to access and act upon analytics to optimize operations.”
Hans Nolen, Director at Indicium B.V.
“As one of the world’s leading festivals, Zwarte Cross is always looking to improve experiences. Indicium B.V., Extreme Networks and Zwarte Cross have worked closely to improve networking across the festival for the past seven years, and thanks to the new implementations, 2022 is set to be the most advanced event so far.”
About Extreme Networks
Extreme Networks, Inc. (EXTR) creates effortless networking experiences that enable all of us to advance. We push the boundaries of technology leveraging the powers of machine learning, artificial intelligence, analytics, and automation. Over 50,000 customers globally trust our end-to-end, cloud-driven networking solutions and rely on our top-rated services and support to accelerate their digital transformation efforts and deliver progress like never before. For more information, visit Extreme’s website at https://www.extremenetworks.com/ or follow us on LinkedIn, YouTube, Twitter, Facebook, or Instagram.
Extreme Networks, ExtremeAnalytics, ExtremeCloud, Extreme Fabric Connect and the Extreme Networks logo are trademarks or registered trademarks of Extreme Networks, Inc. in the United States and other countries. Other trademarks shown herein are the property of their respective owners.
