Beyond Survival: Opportunities in Climate Change

Nicole Rojas
July 25, 2024

It all started in 2010 after a great conference with Mr. Al Gore. I was in Mexico City attending an event where Mr. Gore presented what the climate would look like if we did not act quickly and reduce our carbon emissions. That day, Mr. Gore’s team made his “models” available for everyone to study and play with. He told me that the largest desert in the world would be what used to be Mexico, California, Nevada, Arizona, New Mexico, and Texas, all the way to the State of Mexico. He didn’t know if Mexico City would be a part of it because of its altitude. That day, we walked several miles to our dinner because of the bad news.

A model is a fancy term for a mathematical representation of reality, in this case, the potential future. His models were too pessimistic and triggered a horde of climate change deniers. Still, some of his predictions came true; today, we are experiencing scorching temperatures in most places in the US. In some cities in Mexico, we live with water shortages and extreme heat or are devastated by floods. Texas, of all the states, reached a point where they have hurricanes, baseball-sized hail, and even several feet of snow, leading the US costs related to climate change, insurance is skyrocketing, and the excessive heat is costing the economy. European pools are no longer able to be filled due to water shortages. How long will it take since it becomes impossible to live in Phoenix, where in 2023, they recorded 55+ days of 110F (43.3C)? It is not about the record; it is about the average. Can you live for 250 days above 110F (43.3C) by day and night? On our 2019 investor day in San Francisco, Paul Dravis, an investment guru, told us that he believed climate change wouldn’t be prioritized until it was an emergency; sadly, he was right. I think that the emergency has started.

As a foreigner, expat, immigrant, however you want to call it, living in the US, conveying the effects of global warming to my Mexican friends was a challenge. They hadn’t witnessed the orange sky in San Francisco in 2020, the heat waves we endured when my son was born, or the smoke clouds at street level due to nearby fires. However, by 2024, everyone had experienced the changing climate, feeling at least a mild discomfort from the earth’s warming to almost 1.2 degrees Celsius (2.1F). Imagine how it would look like when it reaches 2 degrees. In 2020, the UN released its models using lovely plotting software. The areas are too large to pinpoint a city, but you can understand the trends. With their plotting software, you have several models, some more pessimistic and some more optimistic; they don’t point to a happy ending. This is happening; we might find some technologies that can help us reduce the speed, like carbon capture or the transition to clean energy, but what we have done is (for now) irreversible. Here is the link.

What are the implications of global warming? In 8 points:

The warmer air holds more water; for every Celsius degree that warms, it holds 7% more water. That translates into floods and changes in the rain patterns; I was in Mexico City when it reached its heat record after a devastating flood in Dubai. Water evaporates, holds longer in the atmosphere, travels, and gets down as flash floods, destructive hurricanes, and even snow storms. The water you expect in one area might be down-pouring somewhere else.

The north and south ice caps are melting, disrupting the jet stream and leading to unpredictable weather patterns. Most agricultural processes rely on these patterns, and food security is becoming a pressing issue. Are you prepared for the possibility of baseball-sized hail damaging your home? Will your insurance cover it? This extreme weather includes wildfires, droughts, floods, hurricanes, tornadoes, heat waves, thunderstorms, and weird precipitations. You are right if you feel bumpier in planes; warmer air means more turbulence. At some point, our daylight flights will need to change for nighttime flights; being a pilot might become a night job.

Of course, with the sea level rising, communities, infrastructure, and, more importantly, superficial and underground water supplies are at risk. Miami is already drowning, and the Yucatán peninsula is starting to experience it. Fabulous beaches are beginning to be flooded by sargassum, and coral reefs are bleaching and more likely to die. Your usual cruise can encounter huge waves, and like in my case, you can get stuck in ice in Greenland for a couple of days because the ice sheet is detaching from land. The ocean is warmer, and your favorite fish might become a rare dining option.

Extreme heat and cold—this is what we are feeling right now—nothing that a good air conditioning and a heater can fix. You are right. What happens when you don’t have electricity during a scorching heat wave? It can be down because of a fire warning, like in California in the most expensive zip codes, or because the power supply is short, preventing everyone from simultaneously turning their air conditioning system on. The same thing applies to winter. Is your community able to deal with Snow and ice? With heat, bad air quality, fire smoke, and high pollution levels more likely to happen, heat-related illnesses are now more common, and viruses and bacteria will spread in warm weather. It is expected that at least there will be an excess of a quarter million heat-related deaths in the next 20 years.

Your regular supply chains are starting to be disrupted. A snowstorm here, a hurricane there, a road-destroying flood somewhere else, etc. We are experiencing emergencies everywhere, and with globalization, you are receiving stuff from places that are far away. Even food is challenging. Just like with COVID, we will experience disruptions in the supply chain, but now, it will be for weather-related events. If planes need to take off when it is cooler or leave some people and cargo because of the weight, some things will be left behind or arrive late. The same applies to ships and land transportation.

The disruption in our modus vivendi is already happening and will get worse. Several populations will reach what is known as wet bulb temperature, especially between the tropics. Wet bulb temperature is the right mix of temperature and humidity when the human body cannot cool itself, resulting in a heat stroke. The rule of thumb is that with 70% humidity and 32 degrees Celsius (90F), in 30 minutes, you might experience a heat stroke. That means construction workers outside will probably need to start earlier and continue later by night to minimize the risk of a heat stroke or a heart attack. During the 30 days of excess heat in Mexico City, several people I know had a heat-related illness, my mom included. Is it safe for my kid to play outside during the summer with the wildfires? Should we all wear a mask? How much time in the sun is allowed? It doesn’t matter if you have these conditions for a month or two. Your city might not be salvageable when those are your average annual conditions.

I don’t want to get into biodiversity and all the problems that our planet’s flora and fauna will face. Your best chance to see a polar bear is probably at the zoo.

Finally, this is happening at 1.2 degrees, and I don’t believe we will reverse the trend that fast and keep it below 1.5 degrees or even 2 degrees. We broke the record for greenhouse gas emissions in 2023, and we will need to cut 43% of our 2019 emissions to keep the planet from warming half a point more. We must endure and prepare for the events that are happening and for what will come. Every 0.1 degree causes discernible increases in the intensity and frequency of extreme weather events, which means more droughts, wildfires, hurricanes, giant hail, and disruptions to the global and local supply chains. Essentially, more dollars are being spent fixing stuff destroyed by weather-related issues.

The questions are when, where, and how: according to the UN, by 2050, the only places where the weather will have an annual average of less than 35 degrees C (95F) are above 44 degrees latitude north. In America, that’s around Salem, Oregon; for reference, NYC and Madrid are located at the parallel 40, Rome is at 41, and Beijing is almost at 40. Shanghai, Marrakesh, San Diego, New Orleans, Bermuda, Cairo, and Jerusalem are at the 31st parallel north. What will happen between now and 2050 depends mainly on how fast we heat the planet. Every new year will bring more devastating and more frequent events; energy transition won’t bet here on time, political and market pressures aren’t aligned with stopping greenhouse emissions, and some countries are already getting in trouble; Delhi had 32 days of over 40C (104F), 7.2 million of Bangladeshis endure flood in 2022. What will happen when those 7.2 million people get flooded annually? They will need to migrate. In the next few years, we will see a change in the geopolitical arena, mass migration, and the need for climate resilience infrastructure. Countries, cities, communities, and companies investing earlier in climate change resilience will receive the best and the brightest, enhancing their abilities to endure and thrive in this new ecosystem. Cities are more resilient to climate-related events than rural areas. NY might build a sea wall, Austin is building a smart grid, and Amsterdam is preparing for floods. What are your city, company, and community doing to be ready? What are you doing? It was calculated that the losses related to extreme weather events are 13 times bigger than the investment for preparedness. Resilient infrastructure, microgrids, water management, food supply safety, supply chain resilience, and data and AI that allow predictability and efficiency are fundamental for this transition to the climate adaptation era.

What can you do? And what can we (as a society) do? Here are the top 8 questions that I get related to climate change:

Should I buy an Electric Car? I have a Tesla; I love it; if you are doing it to cut carbon emissions, here is the answer. If you drive a lot, the American style of commuting 16K - 20K miles (20K - 32K kms) annually, do it. In less than one year, you will be carbon-neutral compared to a combustion engine. If you drive above 10K miles (16K km) per year but less than 20K miles, go for a hybrid or keep it for ten years. If you drive less than 10K miles, go for an efficient combustion engine unless you charge your electric or hybrid car with clean energy and plan to keep it for more than ten years. — If you want a blog on this subject, comment or message me.

Should I recycle? Sure, recycle what you can and go for glass, wood, and compostable stuff rather than plastic. Try to avoid plastic. In reality, what you should do is stop buying stuff. Stop wasting materials. If you buy something, use it until it falls apart or give it to someone who finds it useful. Everything new is great, but everything new requires new materials. I know Amazon wants you to buy something per hour; you don’t need more stuff. In reality, very little things are recyclable; stop buying bottled water, it takes more water to create a bottle than the water you drink. I have this rule, I don’t buy anything I don’t need, I used to be excellent in consumerism, and I went through rehab, and now I don’t buy shit. I only buy things that I need and use. I did buy much stuff that I don’t use anymore; I own several dozens of expensive dress shoes, how am I going to wear them in rainy Seattle, 150 sunglasses, I use prescription glasses now, ten golf shirts, and I played once a week and haven’t played in 3 years, etc. In the fifties, the average woman bought two clothing items annually, which lasted for ten years; in 2024, the average American woman buys 68 new items annually and wears them for an average of two years. Try to buy “local,” or at least it doesn’t have to cross the country or an ocean. Stopping your consumerism is more critical than recycling.

What do you do to stay safe? Push your community, government, and company to invest in climate resilience programs and infrastructure. If we know that floods will continue, why aren’t we building stronger roads, walls, and bridges? Also, we need a way to collect, clean, and store that water. If we know water is an issue, why aren’t we investing now in fixing the problem? Are you collecting rainwater? You can use that for everything, probably even for drinking. If we know power will be cut, why don’t we have solar panels and batteries? Have you heard of Atlassian? His founder, Mike Cannon-Brookes, uses the Outback to create massive amounts of energy he plans to sell to Singapore. That is what we all should be doing. It would help if you had energy-efficient stuff in your household to save power and be out of the grid without too much trouble.

Should I turn into a vegetarian? If you want to. I asked the same question some years ago at Gallager’s in NY to my childhood friend Pedro Gómez (Head of Climate / Net Zero Pillar at the World Economic Forum). Please note that we were having dinner at a steakhouse. He said that he ordered lamb for environmental reasons and that was the end of the story. That is what I am trying to do. I love beef, but I’ll usually eat lamb or sheep. The same goes for cheese; I eat only sustainable fish and free-range chicken. My wife is vegetarian, and my son is an ovo-lacto-vegetarian, making it more manageable. When in doubt, I choose eggs. Nutrition is a different subject, and nutrition in the US is an entirely different animal. Let’s not get there.

Should I offset my trip with carbon credits? Should I buy carbon credits? I don’t see the market moving towards offsetting its emissions with carbon credits; I would instead do something to reduce my emissions. You flew to Iceland; nice; try renting an EV, walking or biking as much as possible, eating locally sourced food, and don’t buy stuff that needs to be shipped to the island. In your daily life, the same recommendations apply: walk, bike, or take public transportation, leave your G6 at home, and fly Delta. Lewis Hamilton already did that, and he is way more famous than you will ever be. If you want to invest in something, invest in climate resilience projects. Wouldn’t it be great to know precisely what the average temperature will be in 10 years where my house, factory, or real estate investment is? If you say yes, you are with me, and we are investing in that company. How can I get a discount on my mortgage because I installed a solar panel and battery systems? I can answer that; we have a project just like that one. Investing in Climate Tech Resilience will protect us from weather-related issues, changing our habits will slow climate change. This is an energy crisis; as always, this energy transition will come top down; new technology, electric cars, recyclable and compostable packaging, solar panels, and batteries are expensive, and the latest technology is unavailable for lower-income households. This energy transition also should come from the government and incumbents. We are the market; let’s send those signals; we want cheaper, clean energy and cheaper technology, compostable packaging, cleaner transportation, clean water, green streets, permeable pavements, and better heating and cooling systems. If you don’t want that big oil to keep on producing gasoline, then stop using your car and stopping at the gas station, walk, bike, get an electric car, or an electric Uber ride.

Should I move somewhere? The answer depends on how prepared the community, city, and country are for climate-related issues. A beach house would be great if the community is prepared for hurricanes and floods. Is the community ready? Are they planting mangroves like their life depends on it? A mountain house is lovely if the community does something about fires and you don’t have water issues. Is your skiing chalet ready for 5 to 10 meters (16 - 32 ft) of snow? Is your Texas ranch prepared for a baseball-sized hail storm, a hurricane, or a flood? Some places are safer bets, getting more expensive every year. The rule of dumb is to go north or high unless you are in the southern American hemisphere; you should go south. Send a message or comment if you need more information. The IPCC interactive atlas should shed some light.

If we cut emissions, will the temperature get back to normal? No. If we cut emissions today and reduce them to zero, we have already heated the planet 1.2 degrees; some reports point to 1.64 degrees. At least a couple of generations would live with our current extreme events until we learn how to cool down the planet (hopefully without causing a new Ice Age). The point of cutting emissions is not reaching 2 or 3 degrees where the weather and extreme events would make our way of living very challenging; everything that is happening today would be more extreme and more frequent, destroying our food, our property and infrastructure, water safety, supply chains, coastal cities, and coral reefs. We will frequently experience weird and dangerous precipitations, massive wildfires, tornados, floods, thunderstorms, huge waves, etc. I can go on and on, but you get it. The only option is to slow down.

Take care of yourself and your loved ones. This heat is not your regular heat; your SPF 50 filter and a hat won’t make the cut. Wet bulb temperature is real; children, older people, and people with health issues are more susceptible to heat-related illnesses. Check the temperature and the humidity; when you feel you can’t breathe outside, it is probably better to get inside, hydrate, and rest. Dress appropriately; I understand you might need to wear a suit; it is perhaps time to normalize a linen suit or a “guayabera.” Check your food twice and cook thoroughly; it is warmer, and food gets rotten faster. In some areas, you will experience wildfire smoke or harmful pollution, wear a mask, skip outside exercise, and have indoor air filters; you don’t want your children to smoke at a young age or to smoke at all; breathing that air is the equivalent. After a lousy air season, change your car filters, and you will be surprised. Get in shape, which will help with this and other stuff.

8a. Don’t panic; take action. Your best effort is fine; we don’t need 20% of the people doing everything right. We need 80% of the people doing their best. Enjoy the good weather and be prepared for the bad one. As always, every disruption brings great opportunities; some will build incredible wealth, and a new industry has been created out of necessity. Climate resilience will reap the rewards of this emergency. The market is in dire need of solutions. Get to work!

Take care of yourself, I’ll do the same.

Carlito

PS: This is, of course, an oversimplification of the issue. If you want to learn more, here are my top sources:

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