Insurance and Climate Change column

Study: Manmade Warming Increasing Drought in Western U.S.

By | January 26, 2024

Manmade warming has increased the prevalence and severity of concurrent drought and heat events, also termed hot droughts, across Western North America in the 20th-21st century, a new report shows.

The authors of the report developed the Western North American Temperature Atlas, a 0.5° C gridded reconstruction of summer maximum temperatures back to the 16th century, to measure the changes.

“Our evaluation of the WNATA with existing hydroclimate reconstructions reveals an increasing association between maximum temperature and drought severity in recent decades, relative to the past five centuries,” the report out this week in the journal of Science Advances states. “The synthesis of these paleo-reconstructions indicates that the amplification of the modern WNA megadrought by increased temperatures and the frequency and spatial extent of compound hot and dry conditions in the 21st century are likely unprecedented since at least the 16th century.”

The authors used a network of tree-ring chronologies as predictors for a spatial reconstruction of summer maximum temperatures extending back to at least 1553. They found that subregional-average reconstructions reflected multidecadal trends in temperature variability, most notably a steady warming trend spanning from 1960 to present.

Sustainable Bonds

Sustainable bond issuance will reach $950 billion this year, a slight uptick from $946 billion in 2023 despite high interest rates and slowing economic growth, according to Moody’s sustainable finance update.

The Moody’s forecast comprises $580 billion of green bonds, $150 billion of social bonds, $160 billion of sustainability bonds and $60 billion of sustainability-linked bonds (SLBs).

“Although our forecast falls short of the nearly $1.1 trillion record issuance achieved in 2021, it reflects our view that the market resilience observed during the past two years will extend into 2024,” Moody’s said in the report.

Key points in the forecast include:

  • Investment in emerging green technologies such as green hydrogen, biofuels, battery storage and carbon capture, will accelerate as transition finance gains prominence.
  • A climate finance gap will spur new funding approaches in emerging markets
  • A gradual shift from voluntary to regulatory standards will advance this year.
  • Market innovation will unlock new opportunities for long-term growth.

New Risk

The insurance industry is grappling with a new kind of weather risk driving its biggest loss category. No single weather event caused more than $10 billion in losses for insurers last year, but there were 37 thunderstorms that each cost at least $1 billion, according to a report by Aon Plc.

That’s more than ever before and way above the average of 14 such storms in a single year, the insurance broker said, Bloomberg reported for a recent article on Insurance Journal.

The development is forcing the industry to rethink some of its risk assumptions amid a clear uptick in convective storms, characterized by heavy rain and intense winds, according to the Bloomberg report.

According to the report, 95,000 people globally lost their lives due to natural hazards in 2023 – the highest number since 2010 – resulting largely from earthquakes and heatwaves.

In terms of climate, 2023 was the hottest year on record with unprecedented temperature anomalies, and all-time highs observed in 24 countries and territories.

Doomsday Clock: 90 Seconds to Midnight

Wars, nuclear threats, failures to address climate change, bio-threats and artificial intelligence have mankind about a minute-and-a-half away from global catastrophe.

The Doomsday Clock this week was reset at 90 seconds to midnight, keeping it at the closest the clock has ever been to midnight.

The Bulletin of the Atomic Scientists operates the clock.

The group pointed to a variety of global threats that “cast menacing shadows over the 2024 clock deliberations,” including: the Russia-Ukraine war, and the deterioration of nuclear arms reduction agreements; the climate crisis and 2023’s official designation as the hottest year on record; the increased sophistication of genetic engineering technologies; and the advance of generative AI, which “could magnify disinformation and corrupt the global information environment.”

“Make no mistake: resetting the Clock at 90 seconds to midnight is not an indication that the world is stable,” said Rachel Bronson, president and CEO of the Bulletin of the Atomic Scientists.

The clock was set at 90 seconds to midnight in January 2023, the closest to midnight the clock had ever been.

Founded in 1945 by Albert Einstein, J. Robert Oppenheimer, and University of Chicago scientists who helped develop the first atomic weapons, the Bulletin of the Atomic Scientists created the clock two years later, using the imagery of apocalypse (midnight) and the contemporary idiom of nuclear explosion (countdown to zero) to convey threats to humanity and the planet.

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