Insurance and Climate Change column

Biden’s Climate Accord Move Welcomed by World Leaders

By | January 21, 2021

New U.S. President Joe Biden wasted no time on making known his intentions regarding climate change on his first day in office, saying he was signing an executive order to undo a number of the Donald Trump’s environmental policies.

Biden’s pledge to rejoin the international Paris, reversing Trump’s withdrawal from the landmark agreement, also includes instructing federal agencies to review more than 100 policies, such as fuel economy standards for cars, NPR reported this week.

“A cry for survival comes from the planet itself, a cry that can’t be any more desperate or any more clear,” Biden said in his inaugural address Wednesday.

The Biden administration will also instruct the federal government to consider the long-term economic impacts of climate change when making new regulations, NPR reported.

The Associated Press reported that world leaders “breathed an audible sigh of relief” that Biden is rejoining the global effort to curb climate change, with British Prime Minister Boris Johnson and French President Emmanuel Macron among those welcoming his decision to rejoin the Paris accord.

Japan

Japan’s Financial Services Agency will urge banks and companies “to accelerate decarbonization,” the news site Nikkei Asia is reporting.

The agency is adding climate change measures to bank guidance policies, while favoring companies that want to invest in renewable energy. The financial watchdog will also request companies to disclose information related to climate change.

The agency today was set to convene the first meeting of its Expert Panel on Sustainable Finance to discuss investments that promote sustainable growth and address climate change.

The panel includes experts on economics, banking, insurance and academics. The group plans to compile a set of proposals possibly by this summer.

Japan’s government has pledged to reduce greenhouse gas emissions to net-zero by 2050.

The agency will also encourage corporate disclosure of climate change-related information through such programs as the Task Force on Climate-related Financial Disclosures.

The TCFD, which in 2017 published a voluntary set of disclosures to help inform investors, has said that more than 1,500 organizations worldwide had expressed support for TCFD-aligned disclosures to help cut carbon emissions, up 85% since last year’s update

Hurricanes

By 2050, climate change-related weather events will have a meaningful impact on future hurricane losses, increasing them by 20% or more and in some cases doubling them, even without any increase in the concentration of property exposure along the coast, new research estimates, it was reported in an Insurance Journal article this week.

Catastrophe modeling firm AIR Worldwide released a report exploring how climate change may affect hurricane risk in the U.S. by 2050, specifically related to financial losses to residential and commercial properties.

“The report explores future hurricane-generated storm surge losses for selected study areas around New York, Houston, and Miami, as indicators of the additional risk created by rising sea levels,” the article states. “The results of the analysis show that increased event frequency and sea level rise will have a meaningful impact on future damage. The growth in the number of stronger storms, and landfalling storms overall, increases modeled losses by approximately 20%, with slightly larger changes in areas such as the Gulf and Southeast coasts where major landfalls are already more likely today. The loss increases extend to inland areas as well, as stronger storms may penetrate farther from the coast.”

The report suggests that by 2050 sea level rise may increase storm surge losses by anywhere from one-third to a factor of almost two, with larger impacts possible when combined with increases in the number of major storms.

Researchers believe climate change may affect hurricanes in multiple ways, but the report highlights aspects, such as an increase in the frequency of the strongest storms, and additional storm surge flooding due to sea level rise.

Rain

Climate change will cause a regionally uneven shifting of the tropical rain belt, researchers at the University of California, Irvine and other institutions say.

The tropical rain belt is a narrow band of heavy precipitation near the equator.

This development may threaten food security for billions of people, according to a report covered by Climate Wise.

The report, outlined fully in a study published in Nature Climate Change, says a northward shift of the tropical rain belt over the eastern Africa and the Indian Ocean will result in future increases of drought stress in southeastern Africa and Madagascar, while southward shift of the rain belt over the eastern Pacific Ocean and Atlantic Ocean will cause greater drought stress in Central America.

“Our work shows that climate change will cause the position of Earth’s tropical rain belt to move in opposite directions in two longitudinal sectors that cover almost two thirds of the globe, a process that will have cascading effects on water availability and food production around the world,” said lead author Antonios Mamalakis, a postdoctoral fellow in the Department of Atmospheric Science at Colorado State University.

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