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California’s devastating heatwave pits climate adaptation against climate mitigation

September 7, 2022, 10:10 AM UTC

Good morning, Peter Vanham here, filling in for Alan.

If you’re reading this while waking up to a cloudy day on the East Coast or the Midwest, save a thought for those in California. The ongoing heat wave hitting the Bay Area and other parts of California may go down as the worst in history, with Tuesday having seen record temperatures everywhere from Fairfield (117°) to downtown Sacramento (113°).

For companies and workers, the consequences are plenty. But one of the most poignant ones, the L.A. Times pointed out, is that many warehouses in the state lack air conditioning. It means the effects of the extreme heat are felt most acutely by those working in the booming logistics sector, such as delivery drivers and warehouse workers.

Then, of course, there is the immediate cost of having to delay work and pay a premium for electricity. The California Independent System Operator (ISO) asked residents and companies to lower their electricity consumption yesterday, fearing an outage, and prices surged to $505 to $850 per megawatt hour, up to three to four times the June rate. 

It all points to a rather bleak conclusion: just as efforts to mitigate climate change pick up speed, the need to also focus on adaptation becomes even more acute.

ISO had to use its temporary emergency power generators for the first time ever this week to avoid a blackout. They were installed last year, and use a fossil fuel—natural gas—to produce energy. Meanwhile, major logistics and retail companies, such as Amazon, are being pressured by their employees to take action against excessive heat

In the short run, these adaptation measures are almost certain to be counterproductive towards the longer-term climate goals, given the increased energy consumption and heat production they entail. Over the medium term, however, the challenge for companies will be to combine mitigation with adaptation.

One place I draw inspiration from is Atelier Luma and its “Building for Uncertainty” project in Arles, in Southern France. I visited its converted railway warehouse during a heatwave in July. And though it had no air conditioning, the temperatures inside remained in the 70s. Its secret? Combining frugality, innovation, and locally sourced isolation materials, such as rice straw and clay.

More news below.

Peter Vanham
Executive Editor
@petervanham
peter.vanham@fortune.com

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This edition of CEO Daily was edited by David Meyer.

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