photo by Jennifer Baldwin, Colombia 2013.
Together with the Environment and Clean Energy team at the MIF I was in Bogota, Colombia last week to learn about climate change adaptation for small businesses. The workshop shared the latest climate change science, theory, and philosophical issues. But what really brought the topic down to earth were several interviews with local small businesses in multiple different sectors already being affected by climate change.
Coffee – Pedro is a coffee farmer from Anolaima. Over the past several years, changes in rainfall and a preponderance of a coffee pest (broca) began to cause significant damage to coffee crops. Pedro’s Coop decided they would begin growing bananas as well as coffee to diversify their income sources. They are also improving their aqueduct and household water management to ensure provision of water despite climate variability.
Meat - Lida manages El Humero, a steakhouse in Chia known for its delicious smoked and grilled meats. Catastrophic flooding in the region has been taking place increasingly often in the last ten years. Though her business was not damaged in the last major flood, weekend visitors from Bogota avoided the region for four months due to negative press coverage, and her sales dropped dramatically. She had to lay off workers and cut costs significantly in order to stay in business, and renegotiate the terms of her loans with banks and agreements with suppliers.
Dairy - Yohan is a dairy farmer in Coop Mancilla, near Facatativa, Colombia. Increasing occurrences of severe rains, droughts, and extreme temperatures are affecting the quality and availability of the grass that his family’s dairy cows feed on. The Coop is currently working with the government (Corpoica) to pilot an early warning system to help predict when and how weather will impact the herd, so that the farmers can change their management practices or purchase supplemental feed if required.
Veggies – Sol owns a lunch spot in Bogota called Sol Foods. She aims for an executive clientele, and thus requires high quality ingredients to meet their demanding tastes. Due to recent changes in temperature and precipitation, the price of some vegetables has doubled, at the same time as the quality of produce has decreased, often arriving damaged or rotten. This increases her costs significantly, and makes it a challenge to keep her customers satisfied at a reasonable price.
Medical facility – INTECI is a family-owned institute specializing in the care of individuals with mental and emotional disabilities. They followed all the local regulations when they purchased land in the Sabana valley for their campus, which was located far from the Bogota river. Despite the distance, the region’s catastrophic floods brought a meter of water into their facility and caused them to have to evacuate their patients at high risk and cost. The family and board worked really hard to recover and invested the institute’s savings to restore. Shortly after reopening, they were flooded a second time and then a third time.
University – The Universidad de la Sabana was severely flooded in 2010, after which the University built a giant wall around the school to protect themselves from future floods. Several private condominiums, big farms, private sports clubs and wealthy land owners did the same. Though this reduces their risk individually, this measure has been criticized by some as making flooding much worse for neighboring businesses and low-income communities downstream. This is a striking example of how uncoordinated, reactive responses from businesses can have negative consequences.
The workshop has changed how I think about climate change and sparked some new questions as we think about how the MIF could help small and medium enterprises manage their climate ris
- How can businesses reduce their own risk without increasing the risk of their neighbors?
- Could banks be encouraged to renegotiate loan terms during times of natural disasters?
- Could guarantees be structured to encourage private insurance to cover climate risks?
- Can microfinance help households purchase adaptation infrastructure or equipment, such as water storage tanks?
- Since loans to recover from disasters are difficult to come by, would promoting increased savings help prevent businesses from bankruptcy?
I and the team would like to thank Professor Tom Downing of the Oxford University Centre for Innovation and the Global Climate Change Adaptation Partnership (GCAP) , Fernanda Zermoglio, also of GCAP, and Carmen Lacambra, Juan Lacambra and Vicente Lacambra of Grupo Laera in Bogotá for catalyzing such an interesting discussion on this topic. Thanks for organizing such a great workshop!