Insurance and Climate Change column

Report: California Wildfires Will Get Worse, Blame Climate Change

By | July 18, 2019

Hot, dry weather in California has resulted in a dramatic increase in wildfires. It will get worse – and you can blame climate change, according to a new report out.

The report, Observed impacts of anthropogenic climate change on wildfire in California, published on Monday shows that California experienced a five‐fold increase in annual burned area from 1972 to 2018.

This increase was primarily driven by a more than an “eight‐fold increase in summer forest‐fire extent,” according to the report, which was authored by professors from universities including Columbia and University of California Los Angeles.

“Increased summer forest‐fire area very likely occurred due to increased atmospheric aridity caused by warming,” the report states.

Since the early 1970s, warm‐season days warmed by roughly 1.4°C as part of a centennial warming trend, according to the report.

The report blames manmade global warming.

“These trends were consistent with anthropogenic trends simulated by climate models,” the report states.

Key points in the report include:

  • Annual burned area in California increased five‐fold during 1972–2018, mainly due to summer forest fire.
  • Anthropogenic warming very likely increased summer forest fire by drying fuels. This trend is likely to continue.
  • Large fall fires are likely to become increasingly frequent with continued warming and possibly gradual declines in fall precipitation.

Banana Skins

Climate change can be likened to a discarded banana peel in the road waiting for an unobservant traveler. Even by another name – the British call them banana skins – they pose a risk worth paying attention to.

The Centre for the Study of Financial Innovation, a non-profit think-tank that examines future developments in the international financial field, recently issued its seventh Insurance Banana Skins survey.

The survey has been published since 2007. This is the second survey in which the risks surrounding technology and cyber have come out as the top risks.

The report was conducted in March and April, and is based on 927 responses from 53 territories.

The questionnaire sent to participants came in three parts: respondents were asked to describe their main concerns about the insurance sector over the next two to three years; they were asked to rate a list of potential “Banana Skins” or risks; they were asked to rate the preparedness of insurance institutions to handle the risks they saw.

Three-quarters of respondents were from the primary insurance industry, non-life and life, and the remainder were from the reinsurance and broking sectors, as well as as regulators, consultants, analysts and other professional service providers.

The report outlines the “Big movers,” or changes in the rankings of some concerns.

Those making their way up the list of concerns include:

  • Regulation (No. 4). A heavy regulatory agenda including IFRS 17 (an International Financial Reporting Standard that was issued by the International Accounting Standards Board in 2017) and consumer protection increases compliance risk and implementation costs.
  • Climate change (No. 6). The spate of natural catastrophe events has increased the urgency of this risk, and could be undermining insurance pricing models.
  • Reputation (No. 13). Data security, populist politics and “declining social relevance” could all damage insurance.

Those that went down include:

  • Interest rates (No. 10). The industry has learnt to live with low interest rates, and the next move may be up.
  • Guaranteed products (No. 14). For similar reasons, products which offer guaranteed returns appear less problematic.
  • Social change (No. 18). The industry is preparing for the challenge of meeting social demands created by greater longevity, growing medical and care needs etc.

Climate change ranked at the bottom half of the survey just four years ago because it was considered a long-term risk.

“This year, it would have placed even higher up the table but for the perception that it has little impact on the life side of the industry, which had it at No. 19,” the report states. “It was No. 3 for P&C insurers and No. 2 for reinsurers – and many respondents saw it as the top threat beyond the near future.”

A common theme echoed by respondents about climate change was the growing economic destructiveness of extreme weather events, including hurricanes and typhoons, floods, droughts and wildfire.

End of the Road

The life spans of pavements may be sharply reduced with climate-change-induced temperature rise, according to a study from University of New Hampshire professors published in the journal Transportation Research Record.

The study, Seasonal and Long-Term Changes to Pavement Life Caused by Rising Temperatures from Climate Change, examines the impact of changing pavement seasons and temperatures on pavement life with incremental temperature rise from 0 to 5°C at a site in coastal New Hampshire.

“The winter pavement season is projected to end by mid-century, replaced by a lengthening fall season. Seasonal pavement damage, currently dominated by the late spring and summer seasons, is projected to be distributed more evenly throughout the year as temperatures rise,” the study states. “A 7% to 32% increase in the asphalt-layer thickness is recommended to protect the base and subgrade with rising temperatures from early century to late-mid-century.”

This is one of numerous studies in recent years to look at the impact of climate change on roads and highways.

A 2015 study published in the journal Climatic Change warns that changes in temperature, precipitation, sea level, and coastal storms will likely increase the vulnerability of infrastructure across the U.S.

Like the University of New Hampshire study, that study asserted that the cost of the impacts can be reduced.

“The potential for substantial economic impacts across all infrastructure sectors modeled, however, can be reduced by cost-effective adaptation measures,” the study states.

Killer Heat in the U.S.

“Extreme heat is poised to rise steeply in frequency and severity over the coming decades, bringing unprecedented health risks for people and communities across the country,” a new report from the Union of Concerned Scientists states.

The report has results for each of the 3,109 counties in the contiguous U.S. for all extreme heat thresholds and scenarios included in the analysis, which shows rapid, widespread increases in extreme heat projected across the country due to climate change, including conditions so extreme that a heat index cannot be measured.

The report encourages transitioning to low-carbon energy sources, ramping up energy efficiency; electrifying energy systems across the transportation, buildings, and industrial sectors, and investing in land use and forest management practices that help store carbon in soils, trees, and vegetation.

The analysis includes four different heat index thresholds, each of which authors say brings increasingly dangerous health risks: above 90°F, above 100°F, above 105°F, and “off the charts.”

Off-the-charts days exceed the upper limits of the National Weather Service heat index scale, which tops out at or above a heat index of 127°F, depending on the combination of temperature and humidity.

The report has a tool that enables readers to type in a city and then chose how hot it will get as determined by a heat index, or “feels like” temperature.

Typing in the Los Angeles, Calif., and “Above 100°,” shows the area historically had one day per year at this level between 1971 and 2000. By midcentury (2036-2065) the average number of days at or above that temperature is expected to reach 11, and by late century (2070-2099) it will rise to 32 days. By late century, the report shows the area will see an average of 12 days per year above 105°.

In Detroit, Mich., where the average “Above 100°” days was one, the number of days at that heat index will reach 15 by midcentury and 37 by late century. Boston, Mass., will see its average of one “Above 100°” days rise to 15 by midcentury and to 33 by late century, the report shows.

Miami, Fla., with a historical average of 16 “Above 100°” days, will have 114 such days by midcentury, and 153 days by late century. It will see an average of five “off the charts” days by late century, according to the report.

Past columns:

Topics California Catastrophe Natural Disasters Wildfire Climate Change

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Latest Comments

  • November 4, 2019 at 2:42 pm
    FTA says:
    @ Craig Cornell "... if you say something often enough it doesn’t have to be true..." Craig is so smart. Craig is so smart. Craig is so smart. Craig is so smart. Craig is so... read more
  • July 26, 2019 at 1:12 pm
    Also... says:
    We make every effort to remove the human error aspect of it. See parallel park assist, lane drift detection, automatic pre-crash braking, etc.
  • July 25, 2019 at 5:05 pm
    So why says:
    Exactly. So, much like accidents, we make every effort to minimize their occurrences and the damage they cause. See stop lights and seat belts.

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