The climate affected economy in the NPA-Regions

The second report from Work Package 4 in the GREBE Project was presented at the GREBE partnership meeting in Narvik this week. The results from the survey shows that the extreme climate has an affect on the economy and the financial outcome for businesses in NPA GREBE partner regions. Impacts of extreme weather / weather events on infrastructure is estimated to cost around €11 million only in Norway. This will give an estimated cost for the 6 NPA regions included in the GREBE project a weather dependent cost for the SMEs of approximately €60 – 80 million each year.

4.2 report cover 2

GREBEs Report on the Influence of Environmental Conditions in NPA and Arctic Regions and the next steps

Rural businesses in the energy sector as well as other sectors provide an important liveihood in the northern peripheral areas of Europe. The harsh climatic conditions experienced in many NPA regions, particularly high north and arctic regions, present significant challenges to SMEs and start-ups that can seriously impact on the viability of their businesses. In the Report on the Influence of Environmental Conditions in NPA and Arctic Regions there was findings that indicate that there exists significant climate challenges in the partner regions with different types of harsh weather. Low temperature, hard winds, and rain / snow conditions can be extreme in the NPA regions.

In the GREBE Report on Innovations from Local Technology and Business Solutions the question is: How do businesses located in these areas compensate or cope with unforeseen climate change effects?

What is extreme weather?

An extreme weather occurrence can be defined in different ways and the metrological institutes in each GREBE partner region have their definition made to optimize the specific conditions in each region. A broad institutional indication is often presented when life and values may be lost caused by the extreme weather condition. However, in this report the definition used is:

“Extreme weather conditions are weather that most likely provide problems for people, business and infrastructure”. 

“Local extreme weather” is the weather impact on societal infrastructure in the different NPA regions and is considered to affect the business activities. The phenomenon of “local extreme weather” is serious for the single business when it occurs and may have serious consequences for a business competing in an open market.

NSP 21-06-2017

Climate effects on society and business:

The impact of “local extreme weather” is considered manageable and moderate in most of the northern EU regions, and structural activities that can minimize the negative effects of harsh weather on small, rural energy companies:

  1. Regional cooperation – The diverse geographical areas of northern Europe, are experiencing a number of joint challenges in relation to location, but also possible opportunities that can be overcome and realized by regional cooperation. The experience from each region may be introduced to other Northern European areas and innovations from different parts in society can be used to create specific growth initiatives and common efficient business opportunities of the European Northern and Arctic regions in a climate efficient way. One major impact of challenges and initiatives in business operations is the influence of weather conditions on society and in the extension of SME business operations and productivity located in these areas.
  2. Strategic handling – Today, many operators in society refer to weather as a restriction in budget and argue that it is a phenomenon that has an actual impact on business. However, the weather can be a strong benefit for the business when an updated insight into the specific local conditions is available and by using a strategic handling document based upon regional knowledge and experience from other businesses. Even national weather organizations are today providing companies this service.
  3. Variety of weather – The final implication is that a change in weather pattern will result in a variety of weather phenomenon that can affect the NPA regions in a different matter. There are different effects on the society, depending upon the specific region, i.e. flooding, wind, and disturbance on roads by fallen trees or avalanche.

Results from the GREBE survey

As part of the GREBE Report on Innovations from Local Technology and Business Solutions, it was found that SMEs compensate for weather constraints and disruptions by:

  • Timing, operational planning and using experienced contractors
  • Compensating investments in fertiliser storage capacities
  • Avoiding challenging times in transportations (thaws)
  • Planning in construction phase (needed insulations) for arctic conditions
  • During processes by preventing freezing (heating, antifreezes)

 Business strategy – A minimal planning strategy for weather related disturbance in business are generally lacking both in long and in short seasonal terms. The absence of business strategies tends to characterise SMEs in rural GREBE regions both in limited financial contingency as well as in maintaining physical systems and services.

There are some cost related economic factors that will affect the small business in a rural areas of Northern Europe and it may be time to consider a new weather and climate economy that compensates the businesses that are fighting against the nature and experience higher costs in their energy operations. These companies are strategically located in rural areas which require entrepreneurs, employments opportunities and an innovative environment.

The full Report on Innovations from Local Technology and Business Solutions can be downloaded from the GREBE website HERE

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