Climate Change: The future is in our hands

Trevor Maynard

The authors of the most recent Intergovernmental Panel on Climate Change (IPCC) report note that they are now above 95% sure that mankind is a major contributor to climate change.

I find it fascinating that the consensus around this has grown since 1995 from just 50%. The laws of physics haven’t changed over this period and nor has our general understanding of them: carbon dioxide traps heat; mankind is emitting lots of it – so the earth heats up.

A few years ago climate change was a key topic of discussion on business leaders’ minds. My own feeling is that this has waned in recent years, pushed aside by the financial crisis and its effects. This could also be a natural response to a feeling of helplessness; this is a huge political global problem – how can any single business make a difference? The Copenhagen summit did not appear to achieve what many hoped and some of the optimism around the subject was lost.

Some leaders may also be under the, in my opinion, ‘false’ impression that mankind can engineer its way out of the problem. Our own publication on behavioural aspects to risk taking Cognition: Minding risks notes that “power increases the sense that one can control things.” The problem is that the natural climate system is not well understood and very difficult to control. There is a very long lag between taking action and seeing its effects, and that is what makes climate change such a wicked problem and one far outside of most business leaders’ experience.

Little mitigation action (reduction of CO2 emissions) has happened so far. At present we are still broadly on trajectory to burn much of the fossil fuels that have currently been found. This is called ‘business as usual’. It is highly likely that the climate in 2100 under such a scenario will be extremely unpleasant in many parts of the globe. We have to reduce use of carbon – and the insurance industry has called for this on many occasions – because each year of delay makes it all the harder to catch up later. We have barely started.

It is anticipated that we are headed for heatwaves, droughts, crop failures, higher sea levels and larger storm surges, possibly stronger hurricanes and more flooding, and it is estimated that these will all be suffered by a population that is 3 billion more than it is today. We might find solutions to these issues in building defences, or genetic engineering (for heat, salt and drought tolerant crops) – but we might not. Humanity is fantastically resourceful and the pace of change over the last 90 years has been incredible. But I personally wouldn’t bet our future on it. More specifically I wouldn’t bet my children and their children’s future on it.

We buy house insurance not because we know, or even fear, that our house will burn down, but because we acknowledge that it might. The financial implications are devastating if it does. Negative climate change impacts are far more likely than your house burning down, and because they affect everyone they are far worse. More likely and worse – not a good combination. I can’t remember who first pointed out that mitigating climate change is like insurance for the planet, but they were right.



No comments

Have your say

If you would like to leave a comment, please register. If you already have a account, please login.

Browse By



Lara Green

Lara Green (11)
Executive, Market Intelligence

John Threshie (2)
Senior Manager, International Market Development – Asia

Trevor Maynard

Trevor Maynard (25)
Head of Exposure Management and Reinsurance

Robert Humphreys

Rob Humphreys (1)
Head of Market Operations, Lloyd’s of London

Nick Beecroft (3)
Manager, Emerging Risks and Research

Gabriel Anguiano (3)
Head of Lloyd's Mexico desk and Spanish Latin America

Keith Stern

Keith Stern (17)
Lloyd's Regional Manager for the UK and Ireland