Lloyd’s issues list of climate challenges

In the wake of the Rio + 20 conference on sustainable growth, Lloyd’s has developed a ranking of the world’s top potential climate change challenges ahead.

The London insurance market identified wildfires, flood, drought, pestilence (including weeds and infestation), Arctic warming, hurricanes and heat waves as the most pressing concerns related to global warming.

“Lloyd’s believes strongly that insurance has a vital role to play in helping businesses and communities adapt to the effects of climate change,” it noted. “We were a founding member of the ClimateWise initiative, which provides insurers with a framework to set out how they build climate change into their business operations.”

The insurance group made several observations about key risks in climate change. For wildfires, it pointed out that “there is growing evidence that prolonged heat waves are likely to lead to a greater incidence of wildfires, particularly in Southern Europe and the Western United States.”

The severity of flooding on communities is affecting a growing number of people across the world, Lloyd’s observed. In both 2009 and 2011, floods in southern India took hundreds of lives and left millions homeless. The 2011 Thailand floods were the largest insured fresh-water loss in history.

A 2011 European Commission study estimated droughts in Europe had cost their economies $100 billion over the last 30 years, according to Lloyd’s.

In terms of the move northwards of invasive species, Lloyd’s noted that the major impact to date has been on agricultural crops and forestry sectors. “It’s been estimated that the trees destroyed by an outbreak of mountain pine beetles in British Columbia, for example, could release nearly 1 billion megatons of carbon dioxide into the atmosphere — the equivalent of five years of emissions from Canada’s entire transport sector.”

Projections indicate that the Arctic could see its first ice-free summer within the next 25 to 40 years and, as it becomes less white, it will absorb more heat and reflect less away from earth, Lloyd’s noted. This is likely to increase the rate of warming globally in a process known as ‘Arctic amplification.’

While there is no conclusive evidence that climate change causes tropical storms, it may be increasing their severity, according to Lloyd’s. There appears, for example, to have been a poleward shift in the main Northern and Southern Hemisphere extra-tropical storm tracks.

In November 2011, Lloyd’s noted, the Intergovernmental Panel on Climate Change published a report warning that the frequency of heat waves will increase by a factor of 10 in most regions of the world if carbon dioxide and other gases continue to be produced at today’s levels.