8 Industries Poised to Gain from Climate Change
The recent hurricanes devastating the U.S. and Puerto Rico have reignited discussions regarding the effects of climate change. The prevalence of severe storms, increasing sea levels, drought conditions, and heat waves is now a global reality, creating opportunities for various companies to thrive in this changing landscape.
While few enterprises will overtly aim to profit from climate change, several sectors stand to gain financially if global temperatures continue to rise. Whether by exploring alternative energy solutions, developing new infrastructural projects, or manufacturing health-sustaining products, businesses are ready to adapt to our evolving climate. Additionally, some companies may find new avenues for profit in unforeseen ways.
Below are key sectors that might see unexpected benefits from climate change, regardless of the ethical implications.
1. Renewable energy sector
An overwhelming consensus among scientists indicates that reducing the rate of global warming necessitates a transition to renewable energy. Firms engaged in solar, wind, and other sustainable energy sources are expected to see revenue increases as the energy sector evolves. Moreover, the number of startups in this domain is predicted to rise.
This trend is underscored by the fact that renewable energy contributed around 15 percent of U.S. electricity output in 2016, with continued growth anticipated. As reported by the Solar Energy Industries Association, solar power constituted 30 percent of all newly installed electricity generation in the early months of 2017. It is projected that renewable sources will surpass coal as a power option within the next dozen years. Transitioning entirely to sustainable energy will not happen overnight, but the output from eco-friendly sources will keep increasing.
2. Established energy firms
Despite the rising demand for renewable alternatives, traditional energy companies are unlikely to disappear anytime soon. With global energy consumption rising due to elevated temperatures, it is possible that established fossil fuel enterprises will continue to fulfill energy needs until renewables are more prevalent. Additionally, some corporations have identified melting Arctic ice as a chance to expand offshore oil drilling opportunities.
3. Construction industry
While many focus on combating climate change, others are investigating how to enhance resilience against its impacts. This could involve constructing sea barriers and other infrastructures to mitigate rising sea levels or reinforcing essential systems like transportation networks. Much of this work is expected to be undertaken by private construction firms, possibly sooner if legislative bodies agree on a significant boost in infrastructure funding.
Prominent companies like Caterpillar, Bechtel, and Whiting-Turner frequently participate in substantial construction efforts and are also involved in disaster relief initiatives.
4. Air conditioning industry
With increasing temperatures affecting various regions worldwide, especially densely populated areas, access to air conditioning has become crucial for survival. This creates substantial opportunities for air conditioning manufacturers like Daikin Global and Fujitsu, contingent on customers’ access to adequate electricity.
It is important to note that air conditioning units contribute to climate change due to the use of hydrofluorocarbons, which are significantly more potent than carbon dioxide in trapping heat. As nations aim to phase out HFCs, companies offering cost-effective and environmentally friendly cooling solutions will likely be well positioned to succeed.
5. Technical apparel developers
The escalating frequency of extreme weather conditions opens up avenues for clothing brands focused on creating protective and comfortable apparel. This includes innovative garments designed to keep wearers cool, shield against UV rays, resist heavy rain, and adapt to varying temperatures. Even traditional accessories like sunglasses may evolve to include advanced technology.
Additionally, eco-conscious companies committed to minimizing their environmental impact in sourcing and production could see increased demand.
6. Shipping industry
A recent event involving a Russian tanker crossing the Northeast Passage from Europe to Asia without an icebreaker highlights the evolving shipping landscape. This route, which runs along the Arctic Russian coast, enables a 30 percent reduction in travel time compared to the conventional Suez Canal route.
The journey undertaken by the Russian vessel was facilitated by diminishing Arctic ice levels, a consequence of climate change. This trend could also lead to the creation of new pathways for cruise ships, enhancing tourism to the Arctic and Antarctic areas.
7. Defense and security enterprises
Growing apprehensions regarding food shortages and other repercussions of climate change are raising fears of civil unrest. The United Nations Food Programme cited last year that elevated food prices sparked unrest in locations such as Morocco, Bangladesh, Tunisia, and Indonesia. Large defense contractors like Lockheed Martin, Raytheon, and United Technologies could stand to benefit if these tensions escalate into conflict, while also engaging in humanitarian aid delivery.
Furthermore, climate change is frequently referenced as a factor contributing to the Syrian refugee crisis and other Middle Eastern displacements. This ongoing migration may elevate the need for enhanced border security, benefitting defense and security firms.
8. Agricultural biotechnology companies
Various factors are aligning to improve prospects for agricultural biotech firms. The swelling global population is driving food demands higher, while a growing consumer interest in organic produce coincides with climate change-induced challenges such as droughts and erratic weather patterns.
Companies that could capitalize on these favorable conditions include both fresh biotech startups and established corporations such as Monsanto and Bayer, which have invested heavily in developing crops designed for improved resilience and yield with reduced water and soil usage.
