The UK economy is already undergoing rapid changes due to climate change

The UK economy is already undergoing rapid changes due to climate change

A vineyard in Surrey, England

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Experts have said climate change could lead to major changes in British products over the next few decades as the country tries to avoid “catastrophic” environmental degradation.

In late July, the UK’s Royal Meteorological Society released its State of UK Climate 2020 report, in which the authors noted that the previous year was England’s third warmest year since records began in 1884. .

Meanwhile, the UK Met Office has predicted the country is poised for hot and humid winters, hot and dry summers and “more frequent and intense extreme weather” due to climate change.

Michael Christie, professor of environmental and ecological economics at Aberystwyth Business School in Wales, told CNBC on a phone call that unless drastic action is taken in the UK and the abroad, the rise in temperature will have “greater catastrophic effects”.

“And those effects would be irreversible,” he said, noting that some industries were at greater risk.

“For agriculture, for example, there would be a risk in terms of the potential impact on growing crops,” he said. “There are also problems in terms of animal husbandry and methane emissions, so farmers may not have [as much] livestock in the future. But maybe there are some benefits to this higher UK temperature that could actually increase yields. “

impact on agriculture

Last year 71 percent of the UK’s land was actively used for agriculture. Agriculture accounted for 0.5% of the country’s GDP in 2020 and industry was responsible for 1.4% of all UK jobs.

Martin Lukak, professor of ecosystem science at the University of Reading, told CNBC that some UK farmers are already feeling the effects of more frequent extreme weather events, especially floods and periods of drought.

“In areas where the lack of grass biomass to feed livestock has never been a problem, suddenly it was on everyone’s agenda because there was no grazing, ”he said.

Lukac pointed out that what is happening abroad also affects British agriculture.

“A bigger impact will be felt in other parts of the world, but agriculture has become globally integrated,” he told CNBC. “For example, the underperformance in Brazil will be felt by the UK livestock industry as we buy soybeans from Brazil and feed it to cows in the UK.”

Lukak predicted that future water availability issues could also bring new challenges.

“The cost of water is minimal right now – it’s not really spent in the farmers’ business model. But I suspect that when farmers compete directly with the general population for drinking water due to supply limitations, that will be a problem, ”he explained.

In recent years, Lukac said, climate change in Britain has altered what is grown locally. For example, more regions were able to grow corn. Meanwhile, the government’s policies to cut emissions were what he called the “ripple effect.”

“A few years ago there was a campaign for biodiesel,” he said. “Some agricultural policies in the UK have changed and started to subsidize rapeseed a little more than other crops. It’s been a big change in the types of crops we grow, and in fact we need to rethink agricultural policy a bit. I had to change [to encourage] variety of crops.

The British wine boom

Elsewhere, Britain’s warm climate encourages the expansion of the country’s wine industry.

“Here in Britain, the wine industry has grown rapidly over the past 10 to 15 years,” Steve Dorling, director of innovation at the School of Environmental Sciences at the University of London, told CNBC. ‘East Anglia.

Dorling, who sits on WineGB’s research and development working group, said the industry’s “great success” was in part due to the average growing season – April through October – with warmer temperatures. at 14 degrees Celsius. This made it possible to more reliably develop marketable grape varieties.

Although the climate has become more conducive to wine production in parts of the UK, Dorling said natural variability in the UK climate could still cause a production shock.

However, as wineries continue to plant more vines year after year, WineGB estimates production will increase to around 40 million bottles by 2040. Last year, British Vineyards produced 8.7 million bottles of wine, according to organization data.

industry adaptation

Firms and investors outside of land-dependent industries are also changing the way they operate.

The development of the HS2 high-speed railway in England will use 3D printed graphene reinforced concrete, which is more environmentally friendly than conventional concrete. Elsewhere, a hybrid plane made its maiden 37-mile flight between Orkney and Vic in Scotland earlier this month.

Andrew Wordsworth is the Managing Partner and CEO of Sustainable Ventures, a UK venture capital firm that invests in companies fighting climate change. Founded in 2011, the organization has launched 8 companies, invested in 27 and supported the growth of 250 others.

“A key element of innovations [we support] It’s that they allow people to continue to enjoy consumer goods and experiences, but in a more sustainable and often less expensive way, ”Wordsworth told CNBC. There must be a compromise between “

business is not ready

While some companies strive to reduce climate risks and become more sustainable, others are falling behind.

In 2008, UK lawmakers forcefully passed the Climate Change Act, which aims to reduce emissions by 100% by 2050 from 1990 levels.

Part of the strategy is the introduction of a ‘carbon budget’, which sees limits set for a period of five years on a country’s emissions. In April, the government announced that its sixth carbon budget – from 2033 to 2037 – would “legislate the world’s most ambitious climate change target”, aiming to reduce emissions by 78% by 2035 compared to 1990 levels. Est.

The UK is currently in its third carbon budget period, which ends in 2022.

According to the Climate Change Committee – an independent advisory body established under a 2008 law – the UK is currently “behind” on its fourth, fifth and sixth budgets.

Speaking to CNBC via email, a CCC spokesperson said there was a lack of evidence that companies were taking action to prepare for climate risks such as flooding, coastal changes, extreme weather events. and supply chain disruptions.

“Without action on climate adaptation, we will struggle to meet key government and social goals, including Net Zero,” a CCC spokesperson warned.

Earlier this month, the United Nations released a landmark report warning that without immediate and comprehensive reductions in greenhouse gas emissions, limiting global warming to 1.5 or 2 degrees Celsius would soon be ‘out of reach’ . .

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