So let's start from the basic question, that is, what is the climate? The climate is the average temperature and the average precipitation that we record in a given place over a long period of time. And what do we know about the climate, how do we know about a climate? Well we have instruments to measure temperature and precipitation over the last two centuries. But what about before? What about before humans were there? Well for that we have to use proxies, for example, ice cores or tree rings or fossils that provide us information about temperature and precipitation over a longer span of time. From the information we have, we know that the climate throughout human civilization has been quite benign and stable. These were actually one of the factors that allowed us to thrive on this planet. Now, through information and a large amount of data and through and thanks to the science, that is called climate science, we also know what are the factors that affect the climate. And we know that one of these key factors is the atmosphere, that is like a blanket over our planet. So are we affecting this blanket? Well, the scientific response is that yes we are affecting this blanket, this atmosphere, by releasing fossil fuels. And this is indeed changing the ability of the atmosphere to trap heat. Therefore, changing the condition of the climate on this planet. But should we care about these changes? Well the answer is yes. First of all the physical impacts are now clear and evident. For example, we measure higher average temperature, a hotter ocean, which in turn is creating more frequent high energy hurricanes and storms. We see the effects and implication on the snow cover and on the ice cover. And many of these are of physical impacts are starting to be evident now. But it's also the economic implication of these physical impacts that is now being studied and is worrisome. Indeed, economists have now shown that the implication of increased temperature are negative. And they really are evident all across the spectrum of human activities, ranging from agricultural yields to labour productivity, to health. So governments and nations are starting to care about the problem and doing something about this. There are two specific activities I want to discuss with you today that are relevant for governments, nation, firms and individuals like us. The first thing is the activity of mitigation. What that means is decreasing the impact humans are having on the atmosphere. Therefore decreasing the emissions. The first question one has to ask is, well if we want to decrease these emissions, where are emissions coming from? And it is evident now that emissions are coming from the production of electricity, transportation, industrial activities and agriculture mostly. If we want to do something about that, if we want to decrease emissions from these activities and sectors, therefore, we have to come up with technologies and innovations that do something about that. We already have some solutions. Renewables is clearly one of those solutions, but also investing in bioenergy or thinking about ways of using fossil fuels but capturing the CO2 when we produce electricity and store it underground. While not all the technical solutions are clear and so innovation would also be very, very important to solve the problem. The second activity I want to discuss with you is that of adaptation. That is really a key and important activity. Why is that? Because, even if we stop emitting tomorrow, we will still have to cope with some climate change that is due to the fact that we have emitted until today. So from the industrial revolution to today, we have emitted CO2 and that has committed us to some level of climate change. So adaptation is that, are those activities that basically allow us to cope with this change. There are a set of investments, or changes in the way we produce or new technologies that will allow us to adapt. Let me give you an example. If you think about agricultural yields and the fact that they will be affected negatively by higher temperature or changes in precipitation, then innovation and investment in seeds that allow farmers to have high yields - even though the temperature will be higher - are going to be crucial. Now, there are a lot of industries and firms that have already started programs of adaptation. Think for example of the insurance industries, or think of sectors where long lived capital are invested in. For example, infrastructure. So if you have to build a new city, or if you have to design a new airport, you have to take into account the fact that the climate will be different. The ocean will be higher etc. Adaptation, though, is not a kind of investment that everybody can undertake. You have to keep in mind that the most vulnerable, both in the developing and in the developed world, most likely will not be able to adapt. Then, governments and people will have to step in in order to help them to adapt.
