Tag Archives: Climate Change

New Research Explores Extreme Weather, Climate Change Link

A new study by NOAA and UK Met Office scientists makes the link between global warming and extreme weather events.

The paper, Explaining Extreme Events of 2011 from a Climate Perspective, looks at six global extreme weather and climate events from 2011, including last year’s drought in Texas.

Key takeaways from the paper are:

— Determining the causes of extreme events remains difficult. While scientists cannot trace specific events to climate change with absolute certainty, new and continued research help scientists understand how the probability of extreme events change in response to global warming.

— La Nià ±a-related heat waves, like that experienced in Texas in 2011, are now 20 times more likely to occur during La Nià ±a years today than La Nià ±a years fifty years ago.

— The UK experienced a very warm November 2011 and a very cold December 2010. In analyzing these two very different events, UK scientists uncovered interesting changes in the odds. Cold Decembers are now half as likely to occur now versus fifty years ago, whereas warm Novembers are now 62 times more likely.

— Climate change cannot be shown to have played any role in the 2011 floods on the Chao Phraya River that flooded Bangkok, Thailand. Although the flooding was unprecedented, the amount of rain that fell in the river “catchment† area was not very unusual. Other factors, such as changes in reservoir policies and increased construction on the flood plain, were found most relevant in setting the scale of the disaster.

The  New York Times has more on the study findings.

Release of the study comes along with NOAA’s 2011 State of the Climate report which found that worldwide 2011 was the coolest year on record since 2008, yet temperatures remained above the
30 year average.

NOAA’s climate report also provides details on a number of global extreme events from last year, including the Thailand floods, drought and tornado outbreaks in the U.S., floods in Brazil and the summer heat wave in central and southern Europe.

In the words of Deputy NOAA Administrator Kathryn Sullivan:

2011 will be remembered as a year of extreme events, both in the United States and around the world. Every weather event that happens now takes place in the context of a changing global environment. This annual report provides scientists and citizens alike with an analysis of what has happened so we can all prepare for what is to come.†

Check out information from the Insurance Information Institute (I.I.I.)Â  on climate change and insurance.

Wildfires Renew Calls for Forest Restoration

As wildfires continue to burn in Colorado, New Mexico, Utah, Wyoming and Arizona, we read that U.S. Forest Service chief Tom Tidwell is renewing his call to restore forests to a more natural state in which fire was part of the landscape.

The Associated Press reports that the Forest Service’s plan is to set the clock back to zero, accelerating restoration programs – including prescribed fires and mechanical thinning – by 20 percent each year in key areas that are facing the greatest danger of a catastrophic fire.

According to AP, four million acres are being targeted this year with a $1 billion budget.

Meanwhile, a new report from scientists at the University of California at Berkeley and Texas Tech University says that climate change will cause more wildfires across North America and Europe in the next 30 years.

The study used 16 different climate models to generate its results. Risk Management Monitor has more on its findings.

And a new climate analysis from NOAA notes that the U.S. experienced its hottest spring (March-May) on record, with an average temperature of 57.1 °F, 5.2 °F above  the 1901-2000 long-term average, surpassing the previous warmest spring (1910) by 2.0 °F.

With the warmest March, third warmest April and second warmest May, Spring 2012 marked the largest temperature departure from average of any season on record for the contiguous United States, NOAA says.

In May, ongoing drought, combined with windy conditions, created ideal wildfire conditions across the Southwest.

NOAA notes that the Whitewater-Baldy Fire complex in the Gila National Forest of western New Mexico had charred over 210,000 acres by the beginning of June, surpassing 2011’s Las Conchas Fire as the largest wildfire on record for the state. The Whitewater-Baldy  fire is still burning.

Check out I.I.I. facts and statistics on wildfires.

The Rocky Mountain Insurance Information Association (RMIIA) is a good resource for information on the Colorado wildfires.

Climate Change Insurance Coverage Ruling

Regular readers of our blog will remember a previous post on a public nuisance lawsuit brought by the Alaskan coastal town of Kivalina against 24 energy and utility firms.

Now a state appeals court has decided what is being described as the first climate change liability insurance coverage case – a case that arose out of the underlying public nuisance lawsuit – in favor of an insurer.

Late last week the Virginia Supreme Court upheld a lower court ruling that Steadfast Insurance has no duty to defend and indemnify the energy company AES Corp.

Basically the decision hinged on the definition of occurrence in the commercial general liability (CGL) insurance policies that AES purchased from Steadfast.

In the opinion, Justice S. Bernard Goodwyn noted that under the CGL policies in question, “occurrence† is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful condition.†

Justice Goodwyn wrote:

The relevant policies only require Steadfast to defend AES against claims for damages for bodily injury or property damage caused by an occurrence or accident.†

However, the Kivalina complaint had alleged that AES intentionally emitted carbon dioxide and other greenhouse gases into the atmosphere.

Justice Goodwyn further noted:

Kivalina alleges its damages were the natural and probable consequence of AES’s intentional actions. Therefore, Kivalina does not allege that its property damage was the result of a fortuitous event or accident, and such loss is not covered under the relevant CGL policies.†

According to an article in the New York Times by Lawrence Hurley of Greenwire, legal experts caution that this initial opinion in favor of insurers is just one decision that applies to only one state and one insurance policy.

A post at the ClimateLawyers blog states:

This is the first skirmish of what is certain to be a protracted battle between insurers and insureds. There are 50 other jurisdictions (including the District of Columbia) and this is only one issue based on one complaint and one insurer’s policy language. There is a long way to go before we will have clarity here.†

Check out the I.I.I. backgrounder on Climate Change Insurance Issues.

Geneva Association: Key Industry Issues For 2011

Regulation and financial stability will be key issues for the insurance industry in 2011, according to international insurance think tank, The Geneva Association.

Hat tip to Business Insurance for more on this story.

Patrick Liedtke, secretary general and managing director of the Geneva Association, observed that the direction of international insurance regulation is going to be critical for the industry this year.

Major regional projects such as Solvency II, which have gained reference status even beyond Europe, and global projects such as International Financial Reporting Standards (IFRS) reforms and International Association of Insurance Supervisors (IAIS) initiatives will see key decisions in 2011.†

Getting the next wave of regulation right is critically important, not only for the industry, but for continued economic growth and development, he said.

On financial stability, Liedtke noted that while systemic threats do not emanate from insurance activities there are a number of issues that remain poorly understood or simply have not been discussed but where important decisions will be taken by governments in 2011.

The key is to ensure that regulatory imprecision or over-stretch do not hamstring well-functioning industry and damage societal interests.†

Two longer term issues that are also of importance are climate change and demographics.

Climate change presents insurers with both long and far-reaching challenges and also opportunities. The shift towards longer life expectancy and ageing populations will change the way societies view risks.

Check out  I.I.I. facts and stats on U.S. demographics and information on climate change and insurance.

UN Climate Talks Underway

Delegates from more than 200 countries are gathering today at the opening of the United Nations Climate Change Summit in Cancun, Mexico.

The two-week conference will see discussions on reviving the negotiations conducted at last year’s climate conference in Copenhagen, which ended without an agreement on a UN treaty to slow global warming.

According to  a Reuters article in the New York Times, global economic problems and disputes between the United States and China, the top two emitters, are expected to be major obstacles to any agreements on steps to slow climate change going forward.

Despite the current focus on the economy and related risks, Deutsche Bank recently warned that it expects the number of climate change related court cases in the U.S. to continue growing for the foreseeable future.

In its report, Growth of U.S. Climate Change Litigation: Trends & Consequences, Deutsche Bank noted that the number of climate change lawsuit filings doubled between 2006 and 2007, and already in 2010 these cases are on a path to triple over 2009 levels.

The largest increase in litigation has been in the area of challenges to federal action, specifically industry challenges to proposed Environmental Protection Agency (EPA) efforts to regulate greenhouse gas emissions, according to DB Climate Change Advisors.

Check out I.I.I. info on climate change and insurance.

Call For Disaster Reduction In Asia-Pacific Region

Countries in Asia and the Pacific are four times more prone to natural disasters than those in Africa and 25 times more vulnerable than Europeans or North Americans, a United Nations report says.

Its release comes as Indonesia’s death toll rises in the wake of a  tsunami and volcanic eruption that hit separate parts of the country earlier this week. More than 370 people are reported dead and tens of thousands driven from their homes.

The Asia-Pacific Disaster Report 2010 notes that while the region generated one quarter of the world’s gross domestic product (GDP), it accounted for 85 percent of deaths and 42 percent of global economic losses due to natural disasters over the last three decades.

The report  was launched  at the Fourth Asian Ministerial Conference on Disaster Reduction (AMCDRR) by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations International Strategy for Disaster Reduction (ISDR).

Today officials at the AMCDRR meeting  approved a five-year road map to cope with weather-related hazards in Asia. Fifty Asian and Pacific region governments agreed to make risk reduction part of their national climate change adaptation policies to address the increase in more frequent and severe weather-related events.

In a video message to the AMCDRR, UN Secretary-General Ban Ki-moon said disasters such as the recent floods in Pakistan are a reminder that disaster risks due to climate change are increasing and there is an urgent need to invest more in risk reduction.

Check out I.I.I. facts and stats on global catastrophes.

Gulf Coast Climate Risk: Adapt or Bust

Communities along the U.S. Gulf Coast could face $350 billion in economic damage by 2030 due to the impact of climate change, economic growth and land subsidence, according to a new study released last week by energy company Entergy Corp.

Wind and storm surge damage from hurricanes today already costs the Gulf Coast some $14 billion per year in annual losses, according to the study findings.

Severe climate change, along with economic growth and land subsidence could drive up expected annual losses by up to 65 percent to an average $23.4 billion by 2030.

These losses also represent a significant annual impact of 2-3 percent on the region’s GDP.

The study recommends a range of economically attractive adaptation initiatives that could prevent a large part of the expected increase in losses.

For example, by investing $50 billion in cost-effective measures over the next 20 years, such as improved building codes, beach nourishment and roof cover retrofits, Gulf Coast communities can avert about $135 billion in annual losses over the lifetime of the implemented measures.

The study on the economics of climate adaptation along the U.S. Gulf Coast considers assets across 77 coastal parishes and counties in four energy-producing states, including Texas, Louisiana, Mississippi, and Alabama.

The analysis was conducted to estimate the potential impact of natural hazards on key sectors of the region’s economy, notably the electric utility and oil and gas industries, and inform coastal communities on how to strengthen their resilience.

Swiss Re was a lead contributor to the research.

Check out I.I.I. information on Catastrophes: Insurance Issues and Climate Change: Insurance Issues.

Global Natural Catastrophes: Rising Tally

Floods in Central Europe, wildfires in Russia and flooding in Pakistan contributed to the second highest number of natural catastrophe events on record for the first nine months of the year since 1980, according to latest data from Munich Re.

A total of 725 weather-related events resulted in insured losses of $18 billion and overall losses of more than $65 billion in the period from January to September 2010, Munich Re said.

Some 21,000 people lost their lives, 1,760 in Pakistan alone, where up to one-fifth of the country was flooded for several weeks.

Munich Re makes the point that in the course of the last three decades there has been a marked increase in the number of weather-related events.

For example, its global database reveals there has been a more than threefold increase in loss-related floods since 1980 and more than double the number of windstorm natural catastrophes, with particularly heavy losses as a result of Atlantic hurricanes.

Note: despite producing 13 named storms, the 2010 Atlantic hurricane season has been relatively benign to date, thanks to the favorable courses pursued by the hurricanes.

In a press release, Munich Re says the rise in natural catastrophe losses is primarily due to socio-economic factors, but it also emphasizes to the probability of a link between weather extremes and climate change.

In many countries, populations are rising, and more and more people moving into exposed areas. At the same time, greater prosperity is leading to higher property values. Nevertheless, it would seem that the only plausible explanation for the rise in weather-related catastrophes is climate change.†

Still, an article in National Underwriter cites a recent report from the Institute for Environmental Studies at Vrije University in the Netherlands indicating that increases in economic and insured losses in recent decades can be tied to increasing exposures and value of capital at risk, rather than climate change.

For related information, check out I.I.I. facts and stats on global catastrophes  and an I.I.I. update on climate change and insurance issues.

SEC Votes on Climate Risk Disclosure

The Securities and Exchange Commission (SEC) yesterday voted to provide public companies, including insurers, with interpretive guidance on existing disclosure requirements as they apply to business or legal developments relating to the issue of climate change. In doing so, the SEC made clear it is neither weighing in on the global warming debate nor considering amending well-defined rules concerning public company reporting obligations. “These rules and interpretations have served investors well for decades, and provide both the framework and flexibility necessary to apply to changing facts and circumstances. If something has a material impact on a company then it is something that needs to be disclosed – that has always been the case,† said SEC chairman Mary Schapiro. Nevertheless, articles in the Wall Street Journal and the New York Times noted this is the first time the SEC has said that public companies should warn investors of any serious risks that global warming might pose to their businesses. In recent months there had been growing expectation that the SEC would act to require all public companies, including insurers, to disclose their climate change risks. However, the SEC guidance does not appear to  create new legal requirements, nor modify existing ones. Check out I.I.I. information on climate change and insurance.

EPA: Greenhouse Gases Threaten Public Health

Yesterday’s announcement by the Environmental Protection Agency (EPA) that greenhouse gases threaten the public health and welfare of the American people has drawn a wide range of responses in the media. In its comments, the EPA also said it found that greenhouse gas emissions from on-road vehicles contribute to that threat. The findings respond to the 2007 U.S. Supreme Court decision that greenhouse gases fit within the Clean Air Act definition of air pollutants. While the findings do not in and of themselves impose any emission reduction requirements, it’s seems likely that the decision may lead to new emissions rules and regulations. The EPA announcement also comes as the UN climate change summit opens in Copenhagen. An item on the Wall Street Journal’s Washington Wire blog makes the interesting point that of the 380,000 public comments received by the EPA in response to its proposed finding, more than 70 percent were supportive of the agency’s move, and less than 30 percent were opposed. While it’s not clear how many of the comments submitted may be duplicates, this appears to indicate a substantial level of support. However, as the Washington Wire notes, recent public opinion polling (here, and here) suggests that the public sees global warming as a less urgent problem than it did a year ago. Check out I.I.I. information on climate change and insurance.