California's Forest Service reports that a total of 600 forest fires ravaged the state last month, which is an all-time high. Five hundred and seventy square miles of forest have been burned out in California, so far, this summer and some state officials report that there are more than 1,000 ongoing blazes.
The fires follow a cruel summer in Greece last year which saw 120 forest fires in just 36 hours in June, sparked by one of the country's worst heat waves. Similarly, in the summer of 2007, temperatures in Bucharest, Romania peaked at 45 degrees centigrade resulting in several deaths. All of these incidents point to - though not necessarily prove - a change in climate.
A study conducted by the University of Oregon's Institute for Sustainable Environment, the Climate Leadership Initiative, the National Centre for Conservation Science and Policy and the US Forest Service's Northwest Research lab in Corvallis found that more needs to be done to prepare for these changes.
Bob Doppelt, co-author of the report, told Oregon-based newspaper the Mail Tribune: "What we've found so far strongly suggests that local, state and federal agencies, as well as private companies and individual households, would benefit greatly by taking into account the risk and stress climate change will bring."
Some insurance brokers are sitting up and taking notice of conservationists' advice. Insurance Australia Group and Swiss Re have been running seminars drawing attention to the risk posed by climate change. Similarly, Lloyd's has teamed up with Catlin, Guy Carpenter and Benfield to create the Lighthill Risk Network. Lloyd’s Emerging Risks Manager, Trevor Maynard, explains that this network seeks to speed up the flow of information from academia to the financial services industry.
Prudent as this may seem, such actions have been met with criticism. Professor R M Carter, Head of the Marine Geophysical Laboratory at the James Cook University in Townsville, writes in the IPA Review that brokers are issuing alarmist warnings about global warming. He says brokers are running seminars to ‘parade the belief that recent sharp rises in claim payouts have been caused by an increasing frequency and severity of natural climate events’. In other words, insurers are exploiting the phenomenon of climate change for their own gain. Furthermore, Professor Carter casts doubt over whether or not climate change is a theory or a certainty.
Met Office weather forecaster John Hammond disagrees with Professor Carter. He says that the Met Office's Hadley Centre, which is an international research facility in the field of climate change, has recorded figures that indicate a clear rise in temperatures. Hammond says: "It is very likely that the increases [in temperature] we have seen are bound to the manmade effects of using stored energy and fossil fuels." He adds that ‘climate change in essence does lend itself to … [more] extreme conditions’.
In light of this and recent spates of extreme weather conditions, the steps being taken by insurance brokers should be seen as cautious rather than exploitative. Trevor Maynard certainly thinks so. He says that Lloyd’s Exposure Management Team believes climate change is already taking effect.
"Sea levels are higher leading to larger storm surges; rain events are becoming less regular and more extreme when they occur, leading to a mixture of short drought followed potentially by flash flooding; we believe that hurricanes are becoming more intense following increases in sea surface temperatures."
To demonstrate its commitment to addressing climate change, Lloyds has joined ClimateWise, which is a group of leading companies and organisations in the insurance industry. By signing up to the scheme, each of the firms agrees to tackle climate change by reporting publicly on their environmental performance.
A number of high-profile environmental thinkers such as the Prince of Wales, who announced this week that his Jaguar, Audi and Range Rover now all run 100% on biodiesel, have endorsed the project. Prince Charles said: "This is just the beginning of the process of real change. Time is a luxury that we do not have and I urge companies both at home and internationally to sign the ClimateWise principles and take the necessary action."
