Insurance and Climate Change column

Climate Change’s No Justice, No Pancake, No Fly Zone

By Don Jergler | February 18, 2016

A conceivable diminishment in my pancake experience is what I’ll take away from the last two weeks of weird headlines tied to the topic of climate change.

However, it was the rancor over the death of Supreme Court Justice Antonin Scalia that got top play from most news outlets. And that event had no shortage of links to the global battle with climate change.

An article earlier this week from Slate.com, titled “What Scalia’s Death Might Mean for Climate Change,” noted that among the consequences of his passing could be “the fate of the planet itself.”

One environmental journalist on his Facebook page wrote that “in dying, Scalia may have done more to support global climate action than most people will do in their lifetimes.”

These harsh environmentally aligned words prompted by Scalia’s death came shortly after the Supreme Court issued a stay that temporarily blocked the implementation of the Obama Administration’s Clean Power Plan.

The plan would set the first national standards for reducing carbon emissions from power plants, and it was key in securing an international agreement in Paris at the end of last year between 185 countries to reduce carbon emissions. Scalia was the lead conservative in derailing, temporarily at least, the plan.

A New York Times article this week took the outlook that the “Next Supreme Court Justice Will be Crucial to Climate Change.”

“If the Senate were to confirm whomever President Obama nominates to succeed Justice Scalia, one of the most conservative justices on the bench, the Supreme Court would probably become more sensitive to the imperative to combat climate change,” the article states. “That’s not just good news for the Clean Power Plan. It could open the door to more aggressive policies.”


Of greater consequence to pancake lovers everywhere was a story this week from the Chicago Tribune, which reported on how climate change could impact maple syrup production.

Though it outlines no definitive findings that indicate just how bland pancake stacks could become in the future, the article notes that researchers have been “collecting data for the past five years on the quality of maple sap in New England and the mid-Atlantic states.”

The reasoning for the concerns over syrup production and quality is because in warmer winters – a predicted effect of global warming – the season starts and ends early and production is lower than expected. Additionally, this can cause sugar content to vary and therefore impact how much syrup a producer can make.

According to a researcher interviewed for the article, the sugar maple, the matriarch of great syrup, won’t tolerate really warm temperatures.

These sugar maples face also threats from acid rain and the Asian longhorn beetle.


The future looks a even bleaker if it’s your lifelong dream to have pancakes on an affordable international flight.

A scientific paper, “Transatlantic flight times and climate change,” published by Environmental Research Letters this month, shows climate change could result in longer flights.

Changing winter winds in the north Atlantic sector. Blue vectors (one per grid point) indicate the horizontal wind field in the atmosphere at the 200 (hectopascal) level, averaged over 20 winters in the climate model. Panel (a) shows a pre-industrial control simulation and panel (b) shows the equilibrated anomaly in a doubled-CO2 simulation. Colored shading indicates the magnitude of the wind vectors. The black line indicates the great circle route between New York and London. Source: Environmental Research Letters

Changing winter winds in the north Atlantic sector. Blue vectors (one per grid point) indicate the horizontal wind field in the atmosphere at the 200 (hectopascal) level, averaged over 20 winters in the climate model. Panel (a) shows a pre-industrial control simulation and panel (b) shows the equilibrated anomaly in a doubled-CO2 simulation. Colored shading indicates the magnitude of the wind vectors. The black line indicates the great circle route between New York and London.
Source: Environmental Research Letters

The study focused on transatlantic flights between New York and London and shows what happens when the atmospheric concentration of carbon dioxide is doubled.

“We find that a strengthening of the prevailing jet-stream winds causes eastbound flights to significantly shorten and westbound flights to significantly lengthen in all seasons,” the study states. “Eastbound and westbound crossings in winter become approximately twice as likely to take under 5 h 20 min and over 7 h 00 min, respectively.”

However, the eastbound shortening and westbound lengthening do not cancel out, causing round-trip journey times to increase, the report states.

“Even assuming no future growth in aviation, the extrapolation of our results to all transatlantic traffic suggests that aircraft will collectively be airborne for an extra (2,000 hours) each year, burning an extra 7.2 million gallons of jet fuel at a cost of $22 million, and emitting an extra 70 million kg (154.3 million pounds) of carbon dioxide, which is equivalent to the annual emissions of 7,100 average British homes,” the report states.


A report out earlier this month from the European Systemic Risk Board says that extreme weather and increased catastrophe losses aren’t the only risks to the insurance community posed by climate change.

Climate change could impact insurers and reinsurers in their role as an insurer of third-party liability claims.

The report, “Too late, too sudden: Transition to a low-carbon economy and systemic risk,” can be viewed in its entirety below. It outlines a variety of risks and classifies them in scenarios: a benign scenario, where a transition to a low-carbon economy occurs gradually; and an adverse scenario, in which the transition occurs late and abruptly.

In the benign scenario the adjustment costs are manageable, and the repricing of carbon assets “probably does not entail systemic risk.”

The adverse scenario, according to the report, could affect systemic risk through three main channels: the macroeconomic impact of sudden changes in energy use; the revaluation of carbon-intensive assets; and a rise in the incidence of natural catastrophes.

“First, a sudden transition away from fossil-fuel energy could harm GDP, as alternative sources of energy would be restricted in supply and more expensive at the margin,” the report states. “Second, there could be a sudden repricing of carbon-intensive assets, which are financed in large part by debt. Third, there could be a concomitant rise in the incidence of natural catastrophes related to climate change, raising general insurers’ and reinsurers’ liabilities.”

As physical implications of climate change materialize, companies in the carbon-intensive energy sector may face liability claims for their contribution to such change, according to the report.

“The insurance industry might be affected in their role as insurer of third-party liability claims,” the report states. “In the medium- to long-term, these losses – both from natural disasters and from liability claims – might shift even more to the household and non-financial sectors as more risks become uninsurable.”

European Systemic Risk Board Report

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