Everyone’s heard the shibboleth “It’s not rocket science.” This implies that whatever “it” may be it’s easier than flying a rocket. In fact Robert Goddard fired off the first real rocket in 1926. Today rockets are an integral part of modern technology, and a number of people know how to make and fly them.
However, meteorology is a lot harder to understand. The term basically defines the study of the interactions between various elements that combine to produce the planet’s weather. These include: the level of radiation from the sun, cloud cover, ocean currents, sea temperatures, wind speeds and directions, the albedo effect (a measurement of the ratio of light reflected to light received by the earth), the ozone layer and the composition of the atmosphere.
The ongoing debate over climate change is focused on atmospheric change. To what extent have various “greenhouse gasses,” principally carbon dioxide produced by burning fossil fuels (oil, coal and gas], which are retained in the atmosphere, caused less heat to escape into space? If so, to what degree are they responsible for making the world warmer? Given all the variables it’s a bit like trying to put together a 2000 piece jigsaw puzzle without a picture for reference. Each piece is important, but figuring out where they fit isn’t easy.
The role played by greenhouse gasses raises three subsidiary questions: 1) to what extent are they created by human activity? 2) How does their increase affect all of the other elements, which make up the world’s climate/weather? And 3) is it possible to do anything about it?
As an example: For roughly the last 800,000 years the amount of atmospheric CO2 fluctuated in the range of 200 to 300 parts per million (ppm). Today measurements indicate that the atmosphere contains around 370 ppm of CO2, and it is steadily rising.
What does that mean? The simplest answer is “nobody knows.” As far back as anyone has been able to measure it’s never happened before. True, Earth’s climate has always been in a state of flux and always will be. It has been a lot colder, producing ice ages, and a lot warmer, with semi tropical forests at the South Pole. What has alarmed the scientific community is the speed with which this warming trend is occurring. Past climatic trends took many centuries to develop. This one has appeared within the last 150 years.
Making sense of all the data gathered from the studies is difficult enough for meteorologists. They admit that they don’t yet have enough answers to build a truly accurate model of the world’s weather. Therefore it’s not surprising, especially given all the media hype, that the general public remains confused. This isn’t remarkable. It’s been a fact of life at least since the industrial revolution. Understanding complicated systems requires specialized knowledge, frequently in the form of mathematical calculations and models.
The average person just doesn’t have the tools, or the time, to analyze the studies that the scientific community publishes. Even though most of the articles, reports, podcasts, etc. on climate change are straight forward reports on what teams conducting various studies have found, they become subjective the moment they’re released.
People know fires and hurricanes happen, because they can see them on TV or read about them. It’s difficult, however to convince people that the world is getting warmer when they’ve just seen reports of the coldest winter in the UK in 30 years, or when they watch Washington D.C. being snowed in by the worst blizzard to hit the area in 90 years. The divergence between what people see and hear, and what climate scientists are telling them, creates a disconnect that makes subjective analysis almost a necessity.
One can put that analysis of the reactions to the reports on climate change into roughly four groups. At one end of the scale are the “true believers,” who are convinced that the world will end if nothing is done. On the opposite end are the intransigent deniers, like Senator James Inhofe (R-Oklahoma), who believe the whole thing is nothing but a “hoax,” designed by scientists to obtain research grants.
Although these two groups are poles apart in their beliefs, they share some common ground. Their conclusions are based on their underlying political, social and economic beliefs, which in many cases were formed before climate change became an issue. The two groups have simply put the studies into their personal zeitgeist, and more studies are unlikely to change their views.
The majority, however, are more or less in the middle of the debate. One group leans toward believing most of the research that’s been reported and supports efforts to reduce greenhouse gasses. The other believes some, but not all, of the research and is either waiting for more facts, or for further proof that the considerable effort and economic pain it would require to reduce and eventually replace fossil fuels will ultimately make any difference.
The debate would remain largely academic, if it weren’t for the fact that the world’s weather affects everything and everyone on the planet. In the forefront of that debate stands the insurance industry, which largely supports efforts to reduce greenhouse gas emissions.
The industry hasn’t taken this position because its leaders are a bunch of tree huggers. It’s supported the scientific conclusions on the role of greenhouse gasses because, if they’re correct, insurers will be the first ones hit. They’re looking at increased flooding from both rising sea levels and on river flood plains. They will have to cope with more extreme weather, including wind storms as well as forest and brush fires. They will likely face an increase in both the number and strength of tropical cyclones. The potential exposures are huge – more than the combined resources of the industry could bear; therefore insurers literally can’t afford to hope the meteorologists are wrong.
As a result companies, especially reinsurers, led by Munich Re and Swiss Re, have set up their own scientific staffs to advise them on climate change and what steps to take to limit their exposures. Lloyd’s published a 360 report on Climate Change [www.lloyds.com]. Catlin recently sponsored an Arctic Survey. The Geneva Association [www.genevaassociation.org], which conducts studies of insurance economics, has devoted a great deal of its resources to studying the potential impact of climate change. These are just some examples of the industry’s concern.
The debate will continue. But it hasn’t changed much in the last 5 years. Go to an article published in 2005 at:
https://www.insurancejournal.com/magazines/east/2005/11/07/features/62360.htm, for a more complete exposition of the differing views of the two majority groups.
One thing, however, has changed. The summit on climate change in Copenhagen in December failed to agree on any meaningful steps to reduce the production of greenhouse gasses. It has therefore become apparent that the political will simply isn’t there for a coordinated effort to do so. Despite all the happy noises following the summit, the real fact is – industrialized and industrializing countries will not take the chance of jeopardizing their economies to combat greenhouse gas emissions. If and when they ever do, it will probably be too late to make a difference. The “tipping points” (the point where a trend cannot be reversed), which meteorologists have warned of for years, will have been reached.
Europe has taken some small steps, but the U.S. has never done so, and is unlikely to take any really serious measures in the future. China just signed a $60 billion deal with an Australian company to build a new mining complex to give China Power International Development 30 million tons of coal a year for the next 20 years. What does that tell you about the country’s intentions to reduce its reliance on coal fired power plants?
The insurance industry was hugely disappointed by the failure in Copenhagen. It’s now more than ever at risk from forces that it has little ability to control. If it is to cope with the potential losses, it will need to do two things: 1) it must persuade governments to assume more of the risk in the form of national (re)insurance programs, and 2) It must take drastic actions to reduce its own exposures.
Those steps will not be easy. Governments have their own priorities, and protecting insurance companies from losses isn’t high on the list. Nonetheless more programs, such as the National Flood Insurance Program (NFIP) in the U.S., France’s Caisse Centrale de Réassurance, a mutual fund into which both the industry and the government pay into that provides coverage for natural catastrophes, or the Caribbean Catastrophe Risk Insurance Facility (CCRIF), are vitally needed.
As to the second point, the industry already knows how to reduce its exposures. It has both a hoard of models to direct it, and a lot of experienced underwriters who can figure out that it shouldn’t cover coastal property that’s high risk, or buildings in areas that are prone to wildfires, or structures built on flood plains. It can and should support the passage and enforcement of more stringent building codes. Ultimately, if the primary carriers can’t act forcefully, for political or other reasons, the reinsurers can put clauses in their treaties, which limit their exposures and can survey the facultative market as well.
Are those really viable solutions? Not entirely, but they could make a difference. If the impacts of the changing climate are even remotely as severe as many studies indicate, the industry will face the gravest crisis it has ever known within the next 50 or so years. It needs to start putting solutions in place now. Even if it’s all a hoax, it’s better to be safe than sorry – and out of business.
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