What the insurance industry thinks about climate change and sea level rise, and it’s not pretty

WWF International and insurance giant Allianz have released a report called “Major Tipping Points in the Earth’s Climate System and Consequences for the Insurance Sector.” I find reports from the insurance industry quite informative because nobody knows risk better than the people who stand to lose a lot of money from those very risks.

A few high-level takeaways from this analysis:

  • A global sea level rise of 0.5 m by 2050 is estimated to increase the value of assets exposed in all 136 port megacities worldwide by a total of $US 25.158 trillion to $US $28.213 trillion in 2050.
  • The impact of an additional 0.15 m of sea-level rise affecting the NE Coast of the U.S. as a result of the localized SLR anomaly means that the following port megacities may experience a total sea level rise of 0.65 m by 2050: Baltimore, Boston, New York, Philadelphia, and Providence… 0.65 m of SLR is estimated to increase asset exposure from a current estimated $US 1.359 trillion to $US 7.425 trillion. The additional asset exposure from the regional anomaly alone (i.e. 0.65 versus 0.5 m) is approximately $US 298 billion (across the above mentioned cities alone).

The critical issue, according to the report, “is the impact that a hurricane in the New York region would have. Potentially the cost could be $1 trillion at present, rising to over $5 trillion by mid-century.” This is all based on a tipping-point scenario where we see the Greenland Ice Shield and West Antarctic Ice Shield melt away. More takeaways:

  • The annual damages caused by wildfires, mostly in the U.S. southwest, could be tenfold compared to today’s costs and could reach up to $US 2.5 billion per year by 2050 increasing to up to 14 billion by 2085.
  • 70 percent of working population may be put at risk by droughts in India.

Specifically related to Canada, a 0.5 m sea level rise would put an additional $209 billion (Canadian) worth of assets at risk — from $63 billion today to $272 billion by 2050.  “No bank will give you a mortgage if you don’t have insurance, yet Canada still lacks a plan to manage the risk from dangerous climate change,” said Keith Stewart of WWF Canada.

The latest signs of declining ice cover around the world? How about this story in TIME Magazine discussing how the East Antarctica ice sheet, once thought stable and actually gaining snow cover, is now beginning to decline. Or how about this story in the Toronto Star, based on a new report that found Canada’s northern infrastructure — roads, pipelines, communications systems and buildings — is already beginning to crumble as our northern ice cover melts and permafrost thaws.

According to the report:

Canada’s North is the frontline in the global climate change challenge. Nowhere else in our country, or on our planet, are the early effects of climate change so plain. Nowhere else in Canada are communities and traditional ways of life so clearly at risk due to climate change… Making the roads we travel, the buildings we work and live in, the pipelines that carry our energy and wealth … secure in the face of looming climate change is not just a challenge to Canada’s North, but an obligation to us all.

Then there was this just-released story by AP/CP discussing how Canadian scientists incorrectly assumed that certain ice cover in the arctic was permanent, but learned later it was too thin to hold polar bears. Multiyear sea ice used to cover 90 per cent of the Arctic basin but that has shrunk to 19 per cent. Scientists say what used to be 10 metres thick is now 2 metres thick “at most.” How could they get it wrong initially? They based their conclusions on satellite data, but after visiting the area they realized that the ice was nowhere as thick as what the satellite images led them to believe. Their study will be published soon in the journal Geophysical Research Letters.

It’s too bad many of these stories are being missed in the lead-up to Copenhagen as climate deniers and delayers try to blow up the CRU e-mail hack into a conspiracy story it just isn’t.