Climate Change and Rising Weather Related Disasters
In recent years there have been more and more indicators that climatic change is already influencing the frequency and intensity of natural catastrophes. According to the World Meteorological Organisation (WMO), the years 2001 to 2004 were among the five warmest recorded worldwide since 1861. A study from MIT showed that, since the 1970s, major tropical storms both in the Atlantic and the Pacific region have increased in duration and intensity by about 50 percent.1 Emmanuel projects that this global warming-induced trend will continue in the future.The year 2005 set a record for the hurricanes in the North Atlantic: never before since records have been kept (1850) have so many named tropical storms (7 by the end of July) developed so early in the season, the absolute record of a whole season of 21 (in 1933) was beaten in 2005 with 27 tropical storms.
If the scientific global climate models are accurate, the present problems will be magnified in the near future. These models suggest that we should expect:
- increase in the frequency and severity of heat waves, droughts, bush fires, tropical and extra tropical cyclones, tornados, hailstorms, floods and storm surges in many parts of the world
- new exposures (like hurricanes in the South Atlantic)
- more extensive damage, economic, social, and environmental impacts from weather-related disasters
Changes in many atmospheric processes will profoundly impact the lives, health, and property of millions of people. Of special concern, the impact of climate change will be most acutely felt among the world´s poorest people, and in areas that have made the least contribution to global greenhouse gas emissions. These vulnerable groups have to date also had the least access to affordable insurance.
Decisive question: What strategies will help us adapt to climate change
The decisive question today is not when we will have the ultimate proof for anthropogenic climate change – a small risk of error certainly will remain for some time – but which strategies we should follow to mitigate and adapt to climate change. Insurance-related mechanisms can be an effective part of adaptation strategies.
Insurance-related mechanisms can dampen the negative effects of global warming and minimize the financial risks of an increasing number of natural catastrophes. As the frequency and scope of losses due to major natural catastrophes, especially tropical storms, continues to increase, there is a growing need to explore other options for managing and transferring risks associated with climate change. Market insurance and risk transfer solutions - climate insurance - can be part of the solution in enabling disaster-prone countries to successfully manage the new climate risks on the horizon.