On the eve of the US elections, Hurricane Sandy rudely popped the bubble of global warming denial that has enveloped the US political system. But we can’t say we weren’t warned. Indeed, less than a week before Sandy first started forming as a tropical storm, global reinsurance giant Munich Re issued a report about the long-term trend of increasing extreme events, and the threats to life and property that they pose.
Severe Weather in North America: Perils · Risks · Insurance runs 277 pages, focusing on the period 1980-2011 – during which losses totalled just over $1 trillion – and notes: “The number of natural catastrophes per year has been rising dramatically on all continents since 1980, but the trend is steepest for North America,” adding, “This increase is entirely attributable to weather events, as there has been a negative trend for geophysical events.”
According to the press release, “The insured losses amounted to US $510bn, and some 30,000 people lost their lives due to weather catastrophes in North America during this time frame. With US $62.2bn insured losses and overall losses of US $125bn (in original values) Hurricane Katrina in 2005 was the costliest event ever recorded in the US. Katrina was also the deadliest single storm event, claiming 1,322 lives.”
After Katrina, seven years ago, I interviewed a climate scientist working for another major reinsurance company, so this report immediately caught my attention. As a reality-based business that has to pay a good chunk of the costs of climate change, I knew their perspective spoke for many others as well who were not being heard from. Then another global warming report came out from the World Bank, which only threw Munich Re’s report into sharper focus.
Turn Down The Heat: Why a 4°C Warmer World Must be Avoided, warns that the world is headed toward a rise of 4°C (7.2°F) by the end of the century, and that current pledges to reduce emissions will only marginally reduce that figure. “All regions of the world would suffer – some more than others,” the report’s press release warns, “but the report finds that the poor will suffer the most.” It also finds that, “the most vulnerable regions are in the tropics, sub-tropics and towards the poles, where multiple impacts are likely to come together.”
The World Bank’s report is not alone. Its focus on future impacts almost a century from now and its highlighting of those who’ve done nothing to cause the problem are important themes that others have struck as well. But worthy as these themes certainly are, they can unintentionally distract from the very substantial costs already being incurred – precisely the subject that Munich Re’s report highlights.
The contrast in geographic focus also stood out. In the current time-frame, losses are rising more rapidly for North America because of two factors, Professor Peter Hoppe, head of Geo Risk Research at Munich Re, explained to me. First, “it’s the connection with the humid air from the Gulf of Mexico, which increases the potential for extreme events,” he explained, “and then it’s the missing obstacle [an East-West mountain range like the Himalayas in Asia] so that these air masses – these artic air masses and sub-tropical air masses – can clash in a plain, the midwest, and out of this the thunderstorms can develop.”
As a result, while other continents face only a limited variety of extreme weather threats, “it’s North America which has it all, and certainly if things are changing, it’s the most sensitive continent for these changes”.
There is a hint of a paradox in Munich Re’s report. Like Katrina before it, Hurricane Sandy represents most dramatically the potential consequences of continuing to ignore global warming. But precisely because hurricanes are relatively rare – a few dozen per year compared to thousands of local temperature records per day, for example – their statistical significance remains elusive.
“We don’t derive our knowledge, our information or our belief that global warming is already changing weather extreme patterns from single events like Sandy, but from the statistics we have,” Hoppe told me. It’s not that there’s no connection. He also noted, “At the time when Sandy made landfall, we had far above average sea surface temperatures there along the East Coast, which made it possible that Sandy kept its strength until it made landfall.”
Others have also highlighted the impact of rising sea levels as well. But there’s a lot more data about more common events, such as thunderstorms, tornados, heatwaves and droughts, and the causal connections to global warming are clearer as well.
Thus, Hoppe said, “Actually, the drought this year in the US, I would rather say this is a foretaste of global warming, rather than Sandy”. Of course, droughts are much less dramatic than hurricanes. They take months, even years to develop. But it’s precisely the methodical sensitivity to different paths of threat development that distinguishes the reinsurance industry’s approach.
Severe Weather is a business report, not a political clarion call. It was written for Munich Re’s clients and the insurance industry community more generally. But for those who read it and heed it, this only adds to the understated power of its message about the need to proactively respond to the growing costs of global warming.
The report is divided into three parts. The first, perils, describes the various weather-related hazards; the second, risks, examines mid-term climate variability from weather cycles such as El Nino/La Nina as well as long-term climate change; the third, insurance, summarises weather-related losses in the United States and Canada.
Types of weather-related perils analysed and discussed in part one include winter storms, tropical cyclones, thunderstorms, inland floods, landslides, subsidence and heave, heatwaves, droughts and wildfires. “For each peril,” the report explains, “the individual sections explain physics and characteristics, provide maps outlining threatened regions, look at outstanding historical events, present statistical analyses and suggest risk-reducing prevention measures.”
The detailed analysis is supported by Munich Re’s database of comprehensive losses from natural catastrophes with more than 30,000 records to draw on – 4,000 from North America alone, 3,800 of them weather-related.
“The insurance industry… reflect the deeper reality that the economy and the environment are deeply intertwined with one another.”
As a result of this approach, the report has a remarkably granular, lived-in feel to it. It is anything but abstract. It places the countless vivid but fragmentary stories we’ve all seen of weather disasters, from hurricanes to hailstorms to heatwaves into a comprehensive unifying perspective. Still, there are clear-cut big facts to consider, such as where the big losses come from. Storms of all sorts are the greatest threat to property, while heatwaves are the greatest threat to life. And the most extreme events tend to be disproportionately to blame, for a variety of reasons explained in the text.
Katrina’s huge chunk of the costs of the last 30 years finds echoes in the major events of other perils as well, such as the 1998 ice storm with an insured loss of almost a billion dollars. Or there’s the unnamed “long-lived, high precipitation supercell thunderstorm [that] crossed almost the whole of Missouri” in April 2001. The report noted, “The insured property loss produced by the storm came to almost US$ 1.4bn in Missouri, most of it due to hail.”
While others tend to see such events in isolation, or at best in fragmentary patterns, insurance companies are in the business of doing the exact opposite – comprehending the big picture. If they don’t do that, they don’t survive. Like it or not, they simply can’t escape from the fact that all these sorts of extreme events are on the rise – and costing them even more money.
“Katrina was the wakeup call for the whole industry,” Hoppe said. Prior to that, “the traditional approach of the insurance industry [was] to expect next year the average loss of the last 30 years or so”. Munich Re had already realised that things were changing.
The North Atlantic experiences a periodic cycle, similar to the better-known El Nino/La Nina cycle in the Pacific, but much slower, lasting for multiple decades, not years. In fact, it’s called the Atlantic Multi-Decadal Oscillation, or AMO. The AMO entered a warm phase around 1995, but Munich Re was initially in a minority in recognising the significance.
“The problem is, if you alone are convinced that things are changing, you have to convince the others. First, to get market opinion on this. And if we are the only ones we cannot sell our products anymore if we get to the results that we have to raise our premiums and the others don’t,” Hoppe explained. Munich Re’s isolation ended with Katrina. “Since then, the whole industry followed that assumption that now we are in a warm phase and the models have to be adjusted.”
More sophisticated denialists sometime try to use El Nino/La Nina and AMO to deny the reality of global warming, but the report provides ample evidence that cyclical changes are superimposed over a longer upward trend in hurricane activity. “If you compare the warm phase right now with the warm phase in the middle of the last century, then you see that the activity in this warm phase is much higher compared to the last warm phase,” Hoppe summarised.
Furthermore, he noted, the upward trend is visible in all oceans, despite their differences in oscillatory behaviour. In the Pacific, in particular, Hoppe said, “We cannot explain an almost continuous increase in the number of extreme events”.
Mitigating global warming
Despite all this, hurricanes are not the most clearly linked to global warming. “There are other weather-related perils where we see much clearer signals, which are most of all the so-called ‘convective events’, which are all the events developing out of the thunderstorms, like tornadoes, like intense precipitation events, like straight-line winds and also hail storms,” Hoppe stated.
“There we already have detected and actually have submitted a scientific paper on these findings. This is in the review process right now,” he added. “We have detected that within the last four decades we see a significant trend toward more days with conditions in the atmosphere which allow the development of these large thunderstorm cells.” A warmer, moister atmosphere is a direct result of global warming, which in turn produces more of these cells.
In addition, “the other ones are certainly heatwaves – which are a direct effect of global warming,” he continued. “And with heat waves there is a connection to droughts,” which is why he feels much more confident pointing to the ongoing drought as a sign of things to come.
|Sandy relief efforts continue|
The report does make mention of one weather threat which is much rarer and more expensive even than tropical cyclones like Katrina, Irene, Ike or Sandy. It’s the 1,000 year version of what’s known as an atmospheric river (AR) storm – an ARkStorm, as it was designated by the US Geological Service in a 2011 impact study referred to in Munich Re’s report. By way of background, the report explains:
In the winter of 1861/62, California experienced weeks of heavy rainfall which caused flooding throughout the state. This heavy rain was the result of a meteorological phenomenon known as an atmospheric river (AR) bringing a stream of warm, moist air from the Pacific into California from the southwest over a period of several weeks. Rain falls when the air masses make landfall or reach the Sierra Nevada Mountains. Almost all major precipitation events in California are caused by atmospheric rivers.
The 1861/62 event left most of the Los Angeles basin under water and turned much of the Central Valley into an enormous lake. The report also mentions AR storms in 1969 and 1986, and provides more detail on another one in 1997, which left 48 counties in a state of emergency, including all of Northern California.
The USGS study projected staggering losses – total property losses around $400bn (more than three Katrinas) with another $325bn in losses due to business interruption, over a period of five years. Just rebuilding basic infrastructure – such as California’s coastal Highway 1 – could take a full year to complete. For all the well-deserved worrying over earthquakes in California, it’s remarkable how little awareness there is about the threat posed by such a massive storm.
“There is no connection yet” between global warming and such a storm, Hoppe said, but it’s not hard to see what such a connection would look like. “If the Pacific Ocean warms up further, then the humidity will even be more, which could be transported to California, which could result in an intense precipitation event,” he told me.
Nothing remotely similar has happened in California since 1862. But Sandy’s storm surge broke a Manhattan record set back in 1821. Statistically, we cannot say with any certainty that this or that particular extreme weather event will happen. We can only say that the odds against us are getting worse and worse, which means the cost of insurance is inexorably rising.
While the corporate media habitually frames the environment and the economy in opposition to one another, the insurance industry generally and reinsurers like Munich Re in particular reflect the deeper reality that the economy and the environment are deeply intertwined with one another. There can be no jobs and no businesses if the environment itself is decimated. But almost no other businesses confront this reality directly.
When questioned about this, Hoppe responded with typical understatement and restraint. “We must have an interest in keeping things calculable,” he said. “If we get global warming of four degrees or so, we’ll reach tipping points and have abrupt changes, then we’ll have a problem with our business model.
“So,” he concluded, “We have an interest in mitigating global warming.”
As do we all.
Paul Rosenberg is the senior editor of Random Lengths News, a bi-weekly alternative community newspaper.