More communication the key, say climate change experts
15 July 2008
Representatives from the insurance, risk modelling and scientific fraternities met in New York last month for the second catastrophe modelling forum, co-sponsored by Lloyd’s.
The forum discussed how best to include climate change risks in the cat modelling process, and touched on a wide range of issues from atmospheric pressure to ocean temperatures to ice sheet reduction.
While there were many varying opinions, those assembled agreed that communicating the risks of climate change are essential and that until the public gains a greater understanding of the complex nature of the issue, it will be difficult to establish the political and social movement required to combat the risks.
“"We know that people in business community have casual conversations with their colleagues about climate change. Many have told us that this "coffee talk" is uncomfortable when confronted by colleagues who are skeptical on the issue. It may be wise to arm the public with a short list of clear and concise statements that clarify why there is a scientific consensus that human-induced climate change is real, serious, and occurring today.” said Stephen Bennett, of the Scripps Institution of Oceanography at the University of California.
This year has already seen major weather disasters around the world, with the majority of forum attendees putting this down to a combination of factors including natural variability, and demographics, all were in agreement that the climate signal was present and having an impact today.
And while there is an apparent upward trend in weather-related losses, the most significant drivers in the coastal regions are socio-economic, noted modelling firm AIR Worldwide. “In the US, there is an increase in risk of roughly 7% every year, equating to a doubling of risk every decade, as a result of the continual increase in the number of exposed properties and the cost to rebuild them,” said Senior Vice President Jayanta Guin.
The impact of climate change on certain risks was also clarified – for example while average rainfall has remained roughly constant, there appears to have been a move from regular small events to less frequent large events, making the combination of drought and flash flooding more difficult for insurers.
The impact of climate change on hurricanes was, unsurprisingly, a big topic for discussion, with some scientists expressing concern with methods using global climate model outputs to infer impacts on hurricanes, because as yet they are unable to replicate important observed climate features.
The possibility for abrupt change was considered, and the forum was informed that some of the Intergovernmental Panel on Climate Change’s projections had been shown to be consistently “underestimating the risks”.
On the subject of sea level rise, Paul Mayewski, an expert in ice sheets, noted that there is a significant chance of a one to two, perhaps even three meter increase in sea levels by 2100. Although it does not mean this is the most likely outcome, the forum concluded that insurers and society at large should at least consider such outcomes and test the robustness of their planning against them.
While the forum’s main focus was on property damage impacts of climate change, there was some discussion around the concept of liability – the subject of research for Lloyd’s 360 risk team for 2008.
Paul Epstein expressed concern that carbon capture and storage, expected to be widely used mitigation method, may acidify aquifers and, he argued, cause “leeching of lead and arsenic into ground and surface water, possibly leading to significant pollution and health issues.”
At the end of the event, forum attendees were asked to vote on a number of statements to test the level of consensus about various modelling aspects. Such statements included: “cat models should be based on the latest view of risk”, of which 80% of insurance industry representatives felt this was essential, 60% of catastrophe modelling firms agreed as did 71% of scientists; and “the industry would benefit from an open architecture modelling approach”, thus allowing modellers to mix and match different hazard, and vulnerability models and to tap into the resources at academic institutions around the world. Sixty percent of insurance industry representatives agreed along with 40% of catastrophe modellers. Some catastrophe modellers cautioned that such a project would be complex, while others felt that the simplest issue to address would be the hazard component which would allow academic knowledge from around the world to be incorporated.
Last updated on 15 Jul 2008
