Determinants of corporate adaptation to climate change in winter tourism: An econometric analysis

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Abstract

While corporate adaptation strategies in response to climate change have been characterized, the determinants of adaptation have not been comprehensively analyzed. Knowledge of these determinants is particularly useful for policy makers to provide favorable conditions in support of corporate adaptation measures. Based on unique data from a survey of Swiss ski lift operators, this paper empirically examines such determinants at the business level. Our econometric analysis with linear regression and count data models finds a positive influence of the awareness of possible climate change effects on the scope of corporate adaptation. Surprisingly, no significant influence of the vulnerability to climate change effects on the scope of adaptation could be found. Finally, the dependency on the affected business and the ability to adapt influence the specific strategic directions of corporate adaptation.

Introduction

Despite ongoing activities to mitigate climate change, a further increase in the earth's surface temperature is inevitable and will lead to effects such as changes in frequencies of extreme weather events and levels of precipitation (IPCC, 2007). These direct climate change effects are expected to have significant impacts on the natural environment and society at different spatial and time levels. Within society, companies are important entities by which adaptation to climate change effects occurs. The ways in which affected companies adapt will, to a large extent, determine the nature and scale of impacts and possibly the companies’ survival in the long-run. Research on adaptation as a corporate response to climate change effects is still at an early stage (Arnell and Delaney, 2006). Previous studies predominantly focused on describing adaptation by means of case study research in different sectors such as agriculture (e.g. Schneider et al., 2000, Seo and Mendelsohn, 2008), residential construction (e.g. Hertin et al., 2003) and winter tourism (e.g. König and Abegg, 1997, Abegg et al., 2007, Scott and McBoyle, 2007). While some authors categorized adaptation measures by their type, such as commercial, technological or financial measures (Smit and Skinner, 2002, Hertin et al., 2003), others holistically described entire adaptation strategies they observe as “risk assessment and options appraisal” or “bearing and managing risks” (Berkhout et al., 2006). However, only few scholars (e.g. Arnell and Delaney, 2006) referred to the strategic objectives that different adaptation measures serve.

In addition, while some determinants of corporate adaptation to climate change such as characteristics of the respective company or managerial perceptions about climate change have been proposed (Fankhauser et al., 1999, Bleda and Shackley, 2008), they have not been investigated comprehensively. Yet, knowledge about these determinants is particularly important to enable policy makers to support favorable conditions for corporate adaptation. Based on a new framework of adaptation strategies and on unique data from a survey of Swiss ski lift operators, this paper therefore empirically examines such determinants. In this respect, the scope of corporate adaptation (measured by the total number of adaptation measures) as well as measures that companies take to follow specific strategic directions of corporate adaptation (such as to protect the affected business) are analyzed. We consider the case of ski lift operators because they are highly affected by climate change due to their dependency on natural snow availability, making adaptation strategies seem especially relevant (Scott et al., 2003, Scott et al., 2008, Wolfsegger et al., 2008).

Building upon previous case study research, Section 2 develops a general framework of corporate adaptation strategies and derives hypotheses for an econometric analysis. In Section 3 we discuss to what extent winter tourism and particularly ski lift operators are specifically affected by climate change. Section 4 describes our data set and the variables in our econometric analysis, while Section 5 presents the empirical results. The final section discusses these results and concludes by developing recommendations for policy makers.

Section snippets

Scope and strategic direction of adaptation

Corporate adaptation can be understood as the result of measures that a company chooses to implement in order to adapt to climate change (Adger et al., 2005). The scope of corporate adaptation describes the degree of adjustment required (Smit and Wandel, 2006) or the extent to which the company adapts by, for example, pursuing a number of adaptation measures simultaneously. However, adaptation measures can pursue different strategic directions to reflect several objectives a company might have

Adaptation to climate change by ski lift operators

Snow sport resorts and in particular ski lift operators as part of these resorts are affected by climate change and will continue to be affected in the future since their economic success directly relies on natural snow availability (Scott et al., 2003, Scott et al., 2008, Abegg et al., 2007). For example, projections of temperature and precipitation for the present century in the Swiss Alps entail an increase in average winter temperatures of 0.9–3.4 °C as well as an increase of precipitation

Data

Our empirical analysis is based on data from a nation-wide survey of Swiss ski lift operators, which were collected by ETH Zurich in cooperation with the Swiss national cableway association (SBS). To incorporate the French-speaking part of Switzerland, the questionnaire was also translated into French and a reverse translation was independently conducted in order to guarantee equality in meaning. Subsequently, we conducted a series of pretests with eight climate change researchers, one survey

Results

Table 4 reports (Pearson's) correlation coefficients between all variables in the subsequent econometric analysis. According to this, for example, relatively high positive correlations arise between the ability to adapt variable, on the one hand, and each of the four variables regarding the number of corporate adaptation measures, on the other hand. However, it should be noted that the results in Table 4 only indicate univariate relationships. Therefore, we analyze the estimation results of our

Conclusions

For the analysis of corporate adaptation, researchers predominantly observed and described adaptation strategies by means of case study analysis in various industries (e.g. Smit and Skinner, 2002, Hertin et al., 2003, Arnell and Delaney, 2006). Building upon previous research this paper develops a new framework of corporate adaptation measures and applies unique data from a survey of Swiss ski lift operators to empirically examine the determinants of the adaptation scope (i.e. the total number

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    Further affiliation: University of Zurich, CCRS.

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