Military Contractors See Climate Change as Good for Business

Because droughts, floods, and fires could lead to civil unrest, governments and businesses will need to be armed—so goes the thinking at Raytheon, anyway.
(Photo: Khlil Mazraawi/Getty)


Aug 16, 2013· 2 MIN READ
A six-time grantee of the National Geographic Expeditions Council, Jon writes about all things ocean.

There are a million ways to make a buck these days, and no one ever suggested that cashing in on real-life disasters wasn’t fair game, as long as the bigger goal was to help rather than profit. But making money off climate change? Somehow that sounds very wrong.

Financial institutions Morgan Stanley, Goldman Sachs and others have long put money into businesses like wind farms, renewable energy, smart grids and carbon trading. So-called “green finance” is available in every community, for things like car loans and home-equity loans targeted towards more efficient cars and energy-friendly retrofits. In New York, there’s even a new green homeowners insurance policy offered by, of all folks, the Fireman’s Fund.

But now with the majority of people believing that climate change is real, other speculators—venture capital and private equity players—are taking a slightly different course: Investing in companies that will only get rich if the planet heats up.

European and Chinese companies are buying up big swaths of African and Australian farmland, assuming much of their own land will be worthless or worn out one day in the future. Anything related to clean water may be a good investment since pollution and droughts threaten what’s left. Privateers are buying water-treatment plants as precious freshwater resources disappear. One company is investing in efforts to “engineer” tougher mosquitoes to help fight dengue, a disease that will grow as temperatures climb.

While melting ice caps may be sending tremors down the spines of cities built on the edge of land around the globe, hungry oil and gas companies are eyeing newly exposed shorelines in Greenland and Siberia that had long been off limits to exploration due to all that ice. Antarctica’s mineral-rich Peninsula may soon join that list as its ice sloughs off too.

Infrastructure repair—roads, bridges, tunnels, etc—could be a boom business as superstorms, floods and fires grow. The U.N. estimates that by 2030 we’ll be spending more than $130 billion a year (sounds low to me) on repairs and upkeep.

Whether such investments are cynical or smart is up to those holding the (money) bags.

The giant, Massachusetts-based defense contractor Raytheon represents a different kind of industry that could boom as the planet heats up.

A great Mother Jones story details the conundrum for the company that makes everything from communications systems to Tomahawk missiles. While it certainly doesn’t want to be seen as promoting climate change as a growth business, it predicts its military services will grow as the planet warms.

As we’re seeing in the Mideast right now, the triggers to pushing longstanding civil unrest over the edge are often climate-related. Drought wrecks farms; prices of food go up; already impoverished people can no longer afford to feed families; protests ensue; other grievances pour out; and blood is shed.

Any single climate event—drought, fire, flood, storm—could be enough to trigger violent conflict. A combination of more than one could spark civil war. Defense contractors like Raytheon, Boeing and Lockheed Martin pay attention to those kinds of dynamics.

If civil unrest is in the offing, in steps a company that can help governments, and private companies, arm themselves. In response to a recent query about its climate-related opportunities, Raytheon said, “expanded business opportunities are likely to arise as consumer behavior and needs change in response to climate change.”

It imagined seeing a bump in demand for “military products and services as security concerns arise as results of droughts, floods and storm events that occur as a result of climate change.”

The company predicted this “bump” could happen in the next six to 10 years.