Human influence on the climate system is clear, according to a new assessment by the Intergovernmental Panel on Climate Change (IPCC). The findings fly in the face of climate change scepticism.
Trevor Maynard, Lloyd’s head of exposure management, is dubious on whether there has been a pause in warming over the past 15 years as some have claimed.
“The sceptics are just trying to push the debate and they start at 1998, which was one of the hottest years on record, ” he explains. “It’s a bit like someone breaks the world record for running 100 metres and then in the next ten races people say, ‘Runners are getting slower’.”
The UN’s climate panel says in the IPCC report that any pause in warming over the past 15 years is too short to reflect long term trends. Among its findings is the agreement that climate change has already had an impact on some climate extremes.
This will continue to be the case as we move into the future. “Changes in many extreme weather and climate events have been observed since about 1950, ” says the IPCC report. “It is very likely that the number of cold days and nights has decreased and the number of warm days and nights has increased on the global scale.”
“It is likely that the frequency of heat waves has increased in large parts of Europe, Asia and
Australia, ” it continues. “There are likely more land regions where the number of heavy precipitation events has increased than where it has decreased. The frequency or intensity of heavy precipitation events has likely increased in North America and Europe.”
“If climate change continues it will increase the risk of droughts and also lead to higher temperatures which may mean we’re going to see more wildfires, ” notes Sandra Gonzalez, executive of Emerging Risks & Research on Lloyd’s Exposure Management team. In September, Lloyd’s Emerging Risks team published the report, Wildfires: A Burning Issue for Insurers?
More climate extremes
The IPCC’s findings are particularly pertinent following recent extreme weather events, including floods in Central Europe and Colorado, and last year’s US drought and Superstorm Sandy.
“Climate change acts as a ‘threat multiplier’, ” explains Maynard. “It doesn’t necessarily cause events to happen, but it does make them worse.”
“There’s more humidity in the atmosphere leading potentially to more flooding, there’s more heat in the oceans which is a source of power for hurricanes and the sea levels are higher and that will make storm surges worse, ” he continues. “Storm surge was a big impact with Superstorm Sandy and that is likely to have been made worse by climate change because sea levels are higher.”
The report predicts that extreme temperatures and heat waves will continue to become more frequent and last longer in the future. Extreme precipitation events over most of the mid-latitude land masses and over wet tropical regions are very likely to become more intense and more frequent by the end of the century. Global sea level will continue to rise during the 21st century.
“Estimates show that the mean temperature of the Earth could rise an additional two to four degrees Celsius by the end of the century, ” says James Waller, PhD, research meteorologist for GC Analytics. “This may seem like a relatively small increase, but the impact of rising temperatures, even by a few degrees, could cause a shift in weather patterns, with considerable impacts worldwide.”
Maynard says: “In some parts of the world we expect there will be more flooding and drought and food shortages, we just don’t know where exactly. It means all regions need to think about becoming more resilient.”
Sea level threat
As the polar ice caps continue to melt, rising sea levels are ranked as the biggest climate change threat, according to a report published in September 2013 from Guy Carpenter “Global Warming: The Evolving Risk Landscape”. Melting ice capsare expected to increase coastal flood frequency and severity from tropical cyclones, extratropical cyclones and tsunami events.
According to the IPCC, a sea-level rise of at least one to two feet can be expected by the end of the century. The growing urban footprint and increasing population density in coastal areas has also amplified the financial and societal impacts of such events.
“Climate change makes the risk worse, but so does overpopulation, urbanisation and concreting over green fields because it makes the flooding worse as the soil cannot absorb the water, ” says Maynard.
“Different countries are all at different stages of development, so it’s a huge political problem and you can understand why it’s proving to be so difficult to solve, ” he continues. “It’s about making fundamental changes to the way we choose to live – weaning ourselves off carbon dioxide is not going to be easy but it is essential.”
The insurance industry has a clear role to play in shaping the climate change agenda, given its access to climate and claims statistics, sophisticated models and its essential risk transfer role. Claims from natural catastrophes are likely to continue to rise in the future and it is thought part of that increase will be due to climate change.
Many re/insurers and brokers have invested heavily in predictive models and analytics in an effort to determine future vulnerabilities.
The industry also has a role to play in encouraging the shift towards more sustainable power generation, by providing cover for renewable energy projects and other green technology.
In 2007 the ClimateWise initiative was launched by the insurance industry to respond to the myriad risks and opportunities posed by climate change. Lloyd’s is a member along with brokers and insurance and reinsurance companies from across the globe.
All members commit to action against six key principles that encompass how the industry can push forward climate awareness, shape public policy making and conduct their individual businesses more sustainably. “As a framework for the insurance industry to collaborate it’s a great thing, ” says Maynard.