The Fugue Playing Behind Obama’s Climate Speech — Or Swampland in Florida…
…is looking to be an even worse investment than legend would have it.
The Republican Party may not believe in global warming, but those realists with money on the line clearly do. As reported by Alistair Gray and Pilita Clark in the Financial Times blog, Alphaville, it’s getting harder — and may soon become impossible — to insure areas vulnerable to sea level rise:
Parts of the UK and the US state of Florida were already facing “a risk environment that is uninsurable”, said the global insurance industry trade body, the Geneva Association.
That’s close to all I can quote from the piece under the FT’s copyright/use policies, but you get the idea. This is at least part of the backdrop to President Obama’s (to me) very significant speech today. Digging a little deeper into the report the FT cites [PDF], you can see why:
Recently, improved observational records and the increased length of reliable time series have provided new evidence of the degree of global ocean warming and the distribution of energy within the ocean (e.g. Levitus et al., 2012). A positive temperature trend in the ocean is now detectable and has already changed selected but relevant metrics for extreme events away from what we have observed in the past (e.g. Elsner, 2008)…
There is a significant upward trend in the insured losses caused by the extreme weather events discussed in Chapter 2. [Tropical cylones.; extra-tropical cyclones; convective storms]…This is true for primary insurance, which is impacted by an increasing attritional loss burden caused by severe local weather events, as well as for reinsurance losses caused by large scale catastrophic extreme events.*
And the money quote:
The interplay between the potential of rising risk levels and insurance demand, but decreasing self-protection, could create a risk environment that is uninsurable in some regions (Herweijer et al., 2009). Examples for markets with this potential are U.K. flood or Florida wind storm insurance.
So, to sum up: those with actual money on the line agree that (a) global warming is real; (b) that significant human and environmental consequences are already in train; and that the way we live now — especially on the coasts — is not sustainable.
The report goes on to advocate coupling the ongoing provision of insurance to climate-risk-prone property be conditional on real climate-change mitigation efforts, which is to say, building the new infrastructure needed to protect coasts from the new normal. In that vein. check out this look at what that might entail in a short film made by three of my students a little over a year ago: