Lloyd’s report notes ‘natural variability’ in extreme perils but warns of greenhouse gas emission threat

Lloyd’s of London recently released a report that suggests global warming could either increase or decrease thunderstorm risk in the United States, but a rise in sea levels on the east coast could increase losses from storms similar to Hurricane Sandy.

Catastrophe Modelling & Climate Change, which was produced by the exposure management and reinsurance team at Lloyd’s, was released May 8. In it, the authors review the latest research in climate change and the history of catastrophe modelling. Another section includes case studies provided by catastrophe modelling vendors.

“For many extreme perils the natural variability to date is larger than the underlying climate change tendency,” Lloyd’s notes. “Future projections show that in the coming decades the underlying tendency is expected to emerge more clearly.”

The contributing authors are Ralf Toumi, an atmospheric physics professor at Imperial College London  and Lauren Restell of Lloyd’s Exposure Management.  They warn that the levels of carbon dioxide, methane and nitrous oxide levels in the atmosphere “are higher than at any time” during the last 800,000 years.

“The Summary for Policymakers of the IPCC’s Fifth Assessment Report (2013) reports an unequivocal warming of the climate system,” Lloyd’s noted. “Changes are observed in atmospheric and oceanic temperatures, the extent of ice and snow coverage, and the concentration of greenhouse gases in the atmosphere.”

But this is not necessarily contributing to an increase in thunderstorms in the United States, according to a case study, provided by Verisk Analystics Inc.’s Boston-based AIR Worldwide unit, in the Lloyd’s report.

The AIR Worldwide authors — senior research scientist Ioana Dima and  Shane Latchman, AIR’s manager of research and consulting and client services — note there are  “two competing mechanisms” by which global warming can change thunderstorm risk in the United States.

One effect of global warming that could reduce the probability of severe thunderstorms is a “weaker lower level global temperature gradient between equator and poles which in turn causes a weakening of the vertical wind shear.”

However, Dima and Latchman note, an “increase in vertical instability and low-level moisture would result in an increased probability of severe thunderstorms in the future, since both these factors are important for the formation and development of thunderstorms.”

Their paper was on both U.S. severe thunderstorms and tropical cyclones in a region of the Pacific encompassing a wide area, including Papua New Guinea, Fiji and Samoa.

Global warming “has a direct impact on the intensity and life cycle” of tropical cyclones “by providing more energy to the storms and allowing for a possible increase in severity and frequency,” they wrote.

Another case study — on north Atlantic hurricanes — was also included in the Lloyd’s report.

Periods of high and low frequency of hurricanes “can persist for decades,” wrote Paul Wilson, senior director of model development at Newark, Calif.-based Risk Management Solutions (RMS) Inc.

“Debate still exists as to the driving mechanism behind such variability” Wilson added, whether it is natural oscillations such as the Atlantic Multi-decadal Oscillation or Atlantic Meridional Mode or aerosol pollution in the 1970s and 80s.

RMS included a storm surge model recreation of Hurricane Sandy, which was downgraded to post-tropical storm status when it made landfall about 200 kilometres south of New York City in October, 2012.

One figure in the RMS report shows sea levels recorded monthly at the Battery in New York City from 1900 until 2012. Another figture shows the “modelled full ground-up surge only losses for New York with between plus and minus 85 centimetres” of sea-change.

“The approximately 20 centimetres of sea-level rise at the Battery since the 1950s, with all other factors remaining constant, increased Sandy’s ground-up surge losses by 30% in New York alone,” Wilson wrote. (The Battery is a park on the southern tip of the island of Manhattan). “Further increases in sea-level in this region would non-linearly increase the loss potential from similar storms.”

Lloyd’s suggested in a press release that if fossil fuel use continues to increase rapidly, “there is a chance that sea levels could rise” by about 70 centimetres.

“There are credible (though unlikely) extreme scenarios that would lead to even greater increases in sea level of up to 1.9m.”

Elsewhere in the report, a case study from EQECAT predicts a “shift in the latitude of European windstorms towards central Europe.”