Posts Tagged ‘disasters’
“What is really amazing, and frustrating, is mankind’s habit of refusing to see the obvious and inevitable until it is there, and then muttering about unforeseen catastrophes”*…
One of the effectively-secret ingredients in the world’s economic growth over the last couple of centuries has been insurance. The ability to insure against catastrophic loss has underwritten (pun intended) the trillions and trillions of dollars of loans that have funded the construction and acquisition that has enabled the growth of both commercial endeavor and the the accumulation of personal wealth (directly through home ownership and indirectly through equity ownership in those commercial endeavors or participation in pension schemes that own that equity).
But in a way that was enitrely predictable, climate change is rendering a growing portion of the world uninsurable. Gavin Evans ponders what that might mean…
The Florida peninsula looks like a sore thumb. It juts into the Gulf of Mexico and the Atlantic, where the water is getting warmer year on year, prompting fiercer hurricanes that can blow down houses like collapsing decks of cards. Climate scientists are convinced all hell will break loose sooner or later when a monster-sized, property-destroying storm makes a direct hit on Miami or Tampa-St Petersburg. Given three near-misses in the recent past, the experts view such a calamity as inevitable. It’s a huge risk for anyone living there – they stand to lose everything – but also for those bearing the financial side of this risk, the insurance companies. Some in the industry are seeing this as a portent for their future – an impending existential threat with profound implications for the economic system.
There are no easy solutions for people still paying off mortgages and those who want to buy property along the Florida coast, because the potential payout on the back of a mammoth storm is so high that the reinsurers (who insure the insurers against catastrophe) are refusing to underwrite their clients and, with no reinsurance, there’s no insurance; and with no insurance, no mortgages; and with no mortgages, no property market. Insurance protects investments against loss and is therefore a pillar of the economic system. If it goes, economies are destabilised.
Many panicked homeowners have rushed to make their houses less risky for insurance companies by reinforcing their roofs with hurricane clips, installing impact-resistant windows, doors and shutters, and strengthening their foundations. But it’s not just storms and higher, warmer seas that concern insurers. Rising temperatures mean that the frequency, range and ferocity of wildfires are also on the rise.
So far this year, 3,374 wildfires have burned an area of Florida totalling 231,172 acres (at the time of writing), and it is even worse in California where 7,855 blazes have killed at least 31 people, destroyed more than 17,000 houses and devoured 525,208 acres of land, at an estimated cost of more than $250 billion. Here, too, homeowners rushed to make their properties more palatable to cold-footed insurers – clearing their surroundings of anything flammable, covering yards with gravel, sheathing houses with fire-resistant stucco, and replacing wooden roofs with steel.
But, even for the most diligent, insurance companies have turned tail, dumping existing clients and abandoning fire-prone and storm-prone areas altogether. On the Californian fire front, 2024 was a turning point as several insurers ceased issuing new policies because of fire-associated risks, including the United States’ biggest property insurer, State Farm, which cancelled policies in parts of Los Angeles. It is all too easy to view this cynically, but it’s happening because property insurers have been reporting year-on-year losses from climate change-related payouts.
Insurance companies survive by making more money from covering risk than they lose from these risks, which is why they prefer clients less likely to claim (insofar as they can predict the risk involved) and require them to pay substantial excess to discourage claims. When payouts rise above the premium intake, insurance companies either hike up these premiums or withdraw. But when that risk is considered catastrophic, potentially affecting many thousands of clients, as with Floridian storms and Californian fires, it is the reinsurers who are the first to retreat because they will ultimately bear most of the cost.
Reinsurers aggregate payout patterns to establish the likelihood of having to make huge payouts from future natural catastrophes. They do this by gathering exposure data from existing insurers in a geographical area, and by examining catastrophe models (computer simulations that estimate potential losses from natural perils). When they put all this together with detailed analysis of conditions within the area, they come up with a figure for their total potential loss if a catastrophic event strikes.
This is why reinsurers focus so intensely on climate change. Take a glance at the websites of big ones like Swiss Re and Munich Re and you get a sense of how central this is to their calculations – a concern that has spread to property insurers who are starting to hire climate consultants. Even more than market volatility, climate is their biggest headache. ‘You won’t meet a single insurance or reinsurance CEO who doesn’t believe in climate change,’ the insurance investor and former Lombard Insurance CEO James Orford told me. ‘They see it in the numbers – a combination of more extreme, less predictable events, combined with big losses of sums insured. All the modelling suggests these are uninsurable risks.’…
[Evans recaps the history of insurance, starting in Genoa, in the mid-14th century, with the insuring of maritime expeditions; examines the current state of play; examines the efforts (and gauges the weaknesses) of state’s efforts to step up with coverage when insurers step away; then considers another role for states…]
If states do withdraw from insurance and reinsurance, some of the most lucrative areas of the US, Canada, Europe, Asia, Africa and Australia will be devastated: no mortgages and no banks, leading to more ghost towns and villages. ‘It ends with depopulation and abandonment,’ said Agarwala. ‘Climate change reduces the operating space for humanity.’ In the UK, rising sea levels and coastal erosion could literally reduce operating space, putting 200,000 British homes at risk by 2050. There’s no coastal-erosion insurance, which puts more burden on the state, mainly to pay for new defences, but also to help people move.
Governments can take action in other ways, by investing greater sums in risk-prevention and management. There are signs of this happening such as the ‘fire-hardening’ and storm-prevention efforts in Florida, and improved flood defences in the UK; meanwhile, the EU’s Recovery and Resilience Facility is being used in several countries to build and renovate operations centres to cope with wildfires, and to buy firefighting helicopters.
In future, it is likely that voters will demand that their state and national governments do far more, regardless of the cost. They will want tougher building codes, including limitations on building in risky areas; expensive fire-prevention and fire-fighting schemes; better flood and storm defences; improved early catastrophe management, involving relocating people from risky areas and, when disaster strikes, rapid life-saving interventions such as large-scale emergency evacuations. If the insurance industry is forced to retreat by the climate crisis, all of this infrastructural investment will require vast chunks of taxpayers’ money. It is hard to avoid the feeling that this is part of our destiny, and that the sore thumb of the Florida peninsula is pointing us to the future…
Whole regions of the world are now uninsurable, bringing radical uncertainty to the economy: “The insurance catastrophe,” from @aeon.co.
See also: “An Uninsurable Country” (a report form NRDC), “The Insurance Crisis Is So Desperate People Are Turning Socialist” (a gift article from Bloomberg), and “The Uninsurable Future: The Climate Threat to Property Insurance, and How to Stop It” (from Yale Law Review)
* Isaac Asimov
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As we cover up, we might send highly-charged birthday greetings to a man who made foundational contributions both to the detection of climatic conditions and to a technology that may help allieviate climate change: John Frederic Daniell was born on this date in 1790. Named the first professor of chemistry at the newly founded King’s College London in 1831, he was an avid meteorologist. He invented the dew-point hygrometer known by his name and a register pyrometer; in 1830 he erected a water-barometer in the hall of the Royal Society.
But Daniell is better remembered as a chemist (and physicist), especially for his invention of the Daniell cell, an element of an electric battery much better than voltaic cells, the standard before him. Indeed, the Daniell cell is the historical basis for the contemporary definition of the volt (the unit of electromotive force in the International System of Units). All advances in battery technology since then were “from” the base that Daniell laid.
“I’d rather fight 100 structure fires than a wildfire. With a structure fire you know where your flames are, but in the woods it can move anywhere; it can come right up behind you.”*…
The devastation in the Los Angeles area is just the latest reminder that wildfires are a massive problem that continues to grow. Caleb X. Cunningham, Grant J. Williamson, and David M. J. S. Bowman put the threat into alarming perspective…
Climate change is exacerbating wildfire conditions, but evidence is lacking for global trends in extreme fire activity itself. Here we identify energetically extreme wildfire events by calculating daily clusters of summed fire radiative power using 21 years of satellite data, revealing that the frequency of extreme events (≥99.99th percentile) increased by 2.2-fold from 2003 to 2023, with the last 7 years including the 6 most extreme. Although the total area burned on Earth may be declining, our study highlights that fire behaviour is worsening in several regions—particularly the boreal and temperate conifer biomes—with substantial implications for carbon storage and human exposure to wildfire disasters…
An unlocked article from Nature Ecology & Evolution: “Increasing frequency and intensity of the most extreme wildfires on earth.”
Looking forward: “Five Climate Realism Insights on California’s Wildfires.”
Apposite: “Climate Change, Disaster Risk, and Homeowner’s Insurance,” from the Congressional Budget Office.
And very practically: “Wildfire Prep.”
* Tom Watson
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As we contemplate conflagration, we might recall that on this date in 1949, after two days in which a few flakes fell, Los Angeles “enjoyed” a real snow fall (the first that anyone can recall).
“The last act is the greatest treason: To do the right deed for the wrong reason”*…
Climate change is wreaking an increasing amount of havoc in the U.S. and around the world. Many are worried that the political turn to right in so much of the world will aggravate the situation. But Nathan Gardels suggests that, while the current political temper is out of sync with the planetary imperative, it may still present a path forward.
He begins by recounting his Berggruen Institute colleague Nils Gilman‘s call for a planetary response, then …
… [In sum] What is needed, says Gilman, “is a radical rethink of the very architecture of planetary governance in light of this condition of planetarity.” Or, as I put it… what is now called for is not the old “realpolitik” that seeks to secure the interests of nation-states against each other but a “Gaiapolitik” that aims at securing a livable biosphere for all.As logically compelling as this case may be, the paradigm shift underway is going in the opposite direction. Instead of the global interconnectivity forged in recent decades maturing into a planetary perspective, it is breaking up into a renewed nationalism more emphatic than before the advent of globalization.
In short… the present political temper across the world is out of sync with the planetary imperative.
All of this makes the politics of what can be called “planetary realism” a vexing endeavor. It entails both a recognition of the interdependence of the planetary condition as well as a realistic grasp of what it will take to navigate through what remains a world of nation-states.
This is where such alternative notions as decision-division allocated among appropriate scales of governance, sub-national as well as non-state networks of the willing, and a “partnership of rivals” come in.
For example, when President-elect Donald Trump formally pulled the U.S. out of the Paris climate accord during his last administration, then-California Governor Jerry Brown intensified the state’s cooperation with China’s provinces on de-carbonization strategies, including efforts, among others, to align the metrics of their carbon-trading markets so they could one day be integrated with each other. The present governor, Gavin Newsom, also visited China last year to meet President Xi Jinping to enhance and deepen that collaboration even as U.S.-China relations worsened at the national level.
Acting as a new breed of subnational statesmen, both Brown and Newsom have understood that while the U.S. and China may well survive the decoupling of their economies from each other, the world will not survive the decoupling of climate cooperation between the two largest carbon emitters on the planet. “Divorce is not an option,” Newsom declared in Beijing last year.
Despite all other tensions between these two incommensurate political systems, what Newsom calls the “fundamental and foundational” climate summons must bind the two together in partnership despite rivalry in other realms. This climate cooperation embodies the idea of “a partnership of rivals.”
California is just one case among many where trans-localism can circumnavigate geopolitics. We don’t have to wait for the nation-state as the cumulative causation of local, regional and non-state actors can move the needle. One saving grace of the climate challenge is that, as a distributed reality, it can be addressed in a distributed way.
While climate action does not have to wait for the nation-state, the capacity of nation-states to mobilize domestic populations and resources to shape outcomes remains decisive for crossing the threshold of effective mitigation.
Here, something new is emerging — “green nationalism” — that, in essence, does the right thing for other reasons. Or, to put it another way, it paradoxically advances the planetary agenda on nationalist grounds.
Industrial policies designed to make the green energy transition across America, Europe and China are all competing to protect and promote national self-interest vis-a-vis each other rather than collaborating as a species facing a common threat. Subsidies here are put in place to counter subsidies there. Tariffs or outright bans are blocking the spread of electric vehicles, batteries, solar panels and critical supply-chain minerals across borders. All these policies are aimed at building homegrown industries of the future.
Recently, Italy’s right-leaning prime minister, Giorgia Meloni, put a new twist on the issue. She argues that her country must implement serious climate policies as a key way to keep migrants from the Global South trekking north as climate refugees.
At the COP29 meeting in Azerbaijan, Viktor Orbán, declared Hungary was positioning itself to become “a significant player in electric vehicle development and electricity storage” as a basis for bolstering and sustaining national strength in the fiercely competitive times ahead. Unlike other Western nations, the pugnacious autocrat intends to do so through collaboration with his Chinese friends to leverage their prowess in green-tech development.
It is entirely conceivable that Elon Musk can sell the climate-denier-in-chief on the need for a robust EV industry and infrastructure in the U.S. as the best way to stay ahead of China and, for the same reason, Big Tech can sell him on a revival of non-fossil fuel nuclear energy to power its data centers as part and parcel of national security.
On the face of it, all this may seem a fatal fragmentation. But there may be another way we are compelled to look at it. We have the legitimacy framework we have — the nation-state — not the one we wish we had.
The hard truth seems to be that competitive green nationalism in the realpolitik mold possesses the kind of political legitimacy required for effective action that would take Gaiapolitik generations to achieve at the planetary level.
As the climate clock is ticking, green nationalism is beginning to appear as the most politically organic way to move forward as fast as possible at this historic juncture. In tandem with subnational and non-state networks, it in some ways manifests the very kind of distributed action that decision-division according to scale envisions. Though each may be going it alone, all are going in the same direction.
That is not an endorsement, but simply a recognition of the best we can probably hope for in the intermediate term.
Making lemonade from the lemons we have: “Green Nationalism,” from @noemamag.com @nilsgilman.bsky.social.
* T. S. Eliot, Murder in the Cathedral
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As we search for silver linings, we might recall that it was on this date in 2021 that a rare and record-breaking derecho and tornado outbreak caused widespread damage that was focused across Kansas, Nebraska, Iowa, Minnesota, and Wisconsin. There were many reports of hurricane-force thunderstorm wind gusts and more than 50 tornadoes causing widespread damage to homes, vehicles, businesses and infrastructure (totaling roughly $2 Billion). This was the first December derecho on record to occur within the United States. This event also produced the first December tornado on record in Minnesota since 1950, with 17 tornadoes reported across southeast Minnesota.
(Your correspondent will note that yesterday, December 14, San Francisco experienced its first tornado warning in recorded history.)
“One of the first conditions of happiness is that the link between man and nature shall not be broken”*…
The estimable Jonathan Watts on the (painfully) pivotal year just ended…
As historically high temperatures continued to be registered in many parts of the world in late December, the former Nasa scientist James Hansen told the Guardian that 2023 would be remembered as the moment when failures became apparent.
“When our children and grandchildren look back at the history of human-made climate change, this year and next will be seen as the turning point at which the futility of governments in dealing with climate change was finally exposed,” he said.
“Not only did governments fail to stem global warming, the rate of global warming actually accelerated.”…
The bright side of this clear dichotomy is that young people may realise that they must take charge of their future. The turbulent status of today’s politics may provide opportunity,” he said.
…
His comments are a reflection of the dismay among experts at the enormous gulf between scientific warnings and political action. It has taken almost 30 years for world leaders to acknowledge that fossil fuels are to blame for the climate crisis, yet this year’s United Nations Cop28 summit in Dubai ended with a limp and vague call for a “transition away” from them, even as evidence grows that the world is already heating to dangerous levels…
Veteran climate watchers have been horrified at the pace of change. “The climate year 2023 is nothing but shocking, in terms of the strength of climate occurrences, from heatwaves, droughts, floods and fires, to rate of ice melt and temperature anomalies particularly in the ocean,” Prof Johan Rockström, the joint director of the Potsdam Institute for Climate Impact Research in Germany, said.
…
Aquino [Francisco Eliseu Aquino, a professor of climatology and oceanography at the Federal University of Rio Grande do Sul and the deputy director of Brazil’s polar and climatic centre] said human influence – through the burning of fossil fuels – had also created “frightening” dynamics between the poles and the tropics. Cold wet fronts from the Antarctic had interacted with record heat and drought in the Amazon to create unprecedented storms in between. Floods in southern Brazil killed 51 people in early September and then returned with similarly devastating force in mid-November.
Aquino said this “record record” was a taste of what was to come as the world entered dangerous levels of warming. “From this year onwards, we will understand concretely what it means to flirt with 1.5C [of heating] in the global average temperature and new records for disasters,” he said.
This is already happening. This year’s deadliest climate disaster was the flood in Libya that killed more than 11,300 people in the coastal city of Derna. In a single day, Storm Daniel unleashed 200 times as much rain as usually falls on the city in the entire month of September. Human-induced climate change made this up to 50 times more likely.
Forest fires burned a record area in Canada and Europe, and killed about 100 people in Lahaina on Maui island, the deadliest wildfire in recent US history, which happened in August. For those who prefer to calculate catastrophe in economic terms, the US broke its annual record of billion-dollar disasters by August, by which time there had already been 23.
…
…as science has proved beyond any doubt, global temperatures would continue to rise as long as humanity continues to burn fossil fuels and forests.
In the years ahead, the heat “anomaly” and catastrophes of 2023 would first become the new norm, and then be looked back on as one of the cooler, more stable years in people’s lives. As Hansen warned, unless there is radical and rapid change, failure will be built into the climate system…
Bracing, but critically important– eminently worth reading in full: “World will look back at 2023 as year humanity exposed its inability to tackle climate crisis, scientists say,” from @jonathanwatts in @guardian.
* Leo Tolstoy
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As we face facts, we might recall that it was on this date in 1870 that Congress authorized the formation of the U.S. weather service (later named the Weather Bureau; later still, the National Weather Service), and placed it under the direction of the Army Signal Corps. Cleveland Abbe, who had started the first private weather reporting and warning service (in Cincinnati) and had been issuing weather reports or bulletins since 1869, was the only person in the country at the time who was experienced in drawing weather maps from telegraphic reports and forecasting from them. He became the weather service’s inaugural chief scientist– effectively its founding head– in January, 1871. The first U.S. meteorologist, he is known as the “father of the U.S. Weather Bureau,” where he systemized observation, trained personnel, and established scientific methods. He went on to become one of the 33 founders of the National Geographic Society.
“These are the times that try men’s souls”*…
Last January, (R) D looked, via Adam Tooze, at the concept of the Polycrisis: “I know it is relentless. That is also a feature of the polycrisis we are in. It comes from all sides and it just doesn’t stop.” He’s developed his thinking, summarizing in a recent Financial Times piece…
Pandemic, drought, floods, mega storms and wildfires, threats of a third world war — how rapidly we have become inured to the list of shocks. So much so that, from time to time, it is worth standing back to consider the sheer strangeness of our situation…
Of course, familiar economic mechanisms still have huge power. A bond market panic felled an incompetent British government. It was, you might say, a textbook case of market discipline. But why were the gilt markets so jumpy to begin with? The backdrop was the mammoth energy subsidy bill and the Bank of England’s determination to unwind the huge portfolio of bonds that it had piled up fighting the Covid-19 pandemic.
With economic and non-economic shocks entangled all the way down, it is little wonder that an unfamiliar term is gaining currency — the polycrisis.
A problem becomes a crisis when it challenges our ability to cope and thus threatens our identity. In the polycrisis the shocks are disparate, but they interact so that the whole is even more overwhelming than the sum of the parts. At times one feels as if one is losing one’s sense of reality. Is the mighty Mississippi really running dry and threatening to cut off the farms of the Midwest from the world economy? Did the January 6 riots really threaten the US Capitol? Are we really on the point of uncoupling the economies of the west from China? Things that would once have seemed fanciful are now facts.
This comes as a shock. But how new is it really?…
“Welcome to the world of the polycrisis” (gift link)
Then, in his newsletter, he goes more deeply into the concept and its roots…
Polycrisis is a term I first encountered when I was finishing Crashed in 2017. It was invoked by Jean-Claude Juncker to describe Europe’s perilous situation in the period after 2014. In the spirit of “Eurotrash”, I rather relished the idea of picking up a “found concept” from that particular source. On Juncker check out Nick Mulder’s wonderful portrait of “Homo Europus”. It turned out that Juncker got the idea from French theorist of complexity and resistance veteran Edgar Morin, who is a whole ‘nother story…
“Polycrisis – thinking on the tightrope“
Both pieces are fascinating and useful; both, eminently worth reading in full…
* Thomas Paine, The American Crisis
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As we ponder profusion, we might recall that it was on this date in 1898 that an American institution was born.
The University of Minnesota football team (for our non-American readers out there, I’m of course referring to the kind of football where you’ll get a penalty for using your feet) was playing their final game against Northwestern University. The U of M’s team had been having a lackluster year, and there was a general feeling on campus that this was due to lack of enthusiasm during the games. So several students, lead by Johnny Campbell on a megaphone, decided to lead the crowd of spectators in a chant: “Rah, Rah, Rah! Ski-U-Mah! Hoo-Rah! Hoo-Rah! Varsity! Varsity! Minn-e-so-tah!” The crowd went bananas, as they say, and an energized Minnesota team won the game 17-6.
That day Johnny Campbell and his (presumably drunk) friends became the first cheerleader squad.
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