FWD Climate Change seminar by Bill McGuire
- 1. CLIMATE CHANGE: to lead or follow? Bill McGuire Professor of Geophysical and Climate Hazards University College London The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 2. Content Where are we now? Where are we going? Hothouse Earth: impacts on the insurance industry To lead or follow? Setting an example In Conclusion The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 3. Where are we now? The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 2 º C 0.74 º C 1.34 º C 2 º C 280 387 450 ppm CO 2 Where next? Dangerous Climate Change (DCC) threshold? 387 450 280 387 450 280 387 450 ppm CO 2 280 387 450 ppm CO 2 280 387 450 Where next? 450 Where next? 387 450 Where next? 280 387 450 Where next? 280 387 450 Where next? 0.74 º C DCC threshold may be well below 450 ppm UK Met Office study: only 20% chance that holding levels at 450 ppm would prevent a 2 º C rise ppm CO 2 280 387 450 Where next?
- 4. Where are we going? Emissions The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 “ high” “ medium high” “ medium” © Crown copyright Met Office Current trend
- 5. Where are we going? Temperature The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 Medium emissions scenario (A1B) © Crown copyright Met Office
- 6. Not the whole picture: the carbon-cycle time-bomb The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 © Crown copyright Met Office 1850 – 150 – 100 – 50 0 50 100 1950 2000 2050 2100 Carbon removals from atmosphere (Gt C) vegetation carbon soil carbon 1900 Carbon uptake by plants in 20 th century has buffered the past CO 2 rise But climate change may put this into reverse
- 7. A more likely scenario The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 Medium emissions scenario (A1B) © Crown copyright Met Office
- 8. Towards 2100: temperature change by 2090s compared to 1990s ( °C) The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 © Crown copyright Met Office
- 9. The bottom line: just how bad? Unmitigated emissions will result in a probable 4 °C rise by 2055 (2070 in best case) Land temperatures up to 8°C or more T rises of up to 15°C at high latitudes Arctic CO 2 already at highest level for 50 million years Almost certain loss of Greenland and West Antarctic ice sheets By 2100 annual economic losses arising from climate change forecast to be as high as USD22 trillion The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 Greenland seasonal melt zone expansion
- 10. The front line: impacts on the insurance sector? Insurers are in the front line of climate change battle Arguably more exposed than most other business sectors Direct impacts Extreme weather events Permanent sea-level rise Health implications General operating environment The world of 2030 and beyond unrecognizable The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 11. Hothouse Earth: extreme weather Extreme rainfall events already 2-3 times more extreme than predicted Annual number of major floods up from ~100 in early 90s to ~ 250 >2ºC rise Up to 170 million more affected by coastal flooding increased flood risk for 1 – 5 billion people By 2080 UK annual flood losses could be as high as £22 billion 3.5 million at risk Average number of extreme cyclones up from 13 to 17 a year since 1981 More intense European windstorms predicted The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 305 km h winds 2,200 km across
- 12. Hothouse Earth: sea levels IPCC AR4 18 to 59cm by 2100 Current consensus 1 – 2m by 2100 Commitment to > 10 m? Major implications for all coastal towns and cities Threat to UK nuclear programme 1 m rise threatens ~ 1 billion people + 1/3 world’s agricultural land 1mm rise -> 1.5 m coastline retreat The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 7 m rise
- 13. Hothouse Earth: health effects Peak Temperatures expected to rise twice as fast as average temperatures Europe: by 2040 a 2003 summer will be normal; by 2060 cool UK: By 2050 – 2003 heat-wave every other year Malaria kills 1.5 million a year Suitable breeding conditions in Europe (incl parts of UK) by 2050 Northward spread of malaria, Dengue Fever, Yellow Fever, West Nile virus etc The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 2050 Mean T rise: 4 - 6 º C
- 14. Operating in a Perfect Storm: 2030 and beyond NOT JUST CLIMATE CHANGE! By 2020 PEAK OIL Peak oil production likely by 2020 Production ceased to grow between 2005 and 2008 By 2030 PEAK ALL Global society will need resources of 2 planets to supply needs 50% more food; 50% more energy; 30% more water Peak oil and Peak All critical Massive impact on state of global economy In turn affects ability to mitigate and adapt to climate change Act as multipliers in relation to climate change impact on society and economy The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 15. Water: the new oil Climate change has already affected one-third of the world’s rivers 2/3 of these show reduced flow (incl. Ganges, Yellow, Niger and Colorado) One third of world’s population already suffering water shortages By 2025, 2 in 3 people living under water-stressed conditions Major implications for food security, energy, civil strife and international conflict 158 water war flashpoints identified by UN The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 16. Some predictions USGS 2008: US SW will enter ‘permanent drought state’ in 21 st century Colorado River Basin Provides drinking water for 36 million people Supplies energy to 3 million people Nourishes 15% of US crops Himalayan glaciers that supply water for 40% of world’s population gone by 2050 By 2030 more than half China’s major cities facing water deficit Perth derelict within decades? The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 Himalayas and Tibetan Plateau
- 17. The crop crunch Water crisis is playing an increasingly critical role in global food security Climate change is driving a growing global food crisis: Reduced water availability Desertification Sea-level rise Compounded by Population growth Environmental degradation Biofuel expansion Supplies are at a 50 year low Situation is progressively worsening The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 18. Tropics and sub-tropics especially susceptible to climate change Host to 3 billion people Crops less resilient to higher temperatures Predicted result: 20 – 40% reduction in yield of staple crops (rice and maize) 2050 global food production could be 25% down Half the world predicted to face serious food shortages by 2100 Africa; Asia; South America Global food supply prospects in a warmer world The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 19. To lead or follow? To avoid catastrophe need at least 80% global emissions cut by 2050 in developed nations Translates to a 3% emissions cut year-on-year Will happen in 2009 but took worst global recession since WW2 Insurance industry has no choice but to lead – if only through self-interest Alternative: the sector will face progressively more difficult operating conditions The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 20. Leading the way Direct Introduction of low-carbon products that reward low-emissions lifestyles Hybrid/electric cars Home energy generation Home insulation Similar approach to businesses and facilities E.g. products that reward businesses that buy renewable energy or use electric vehicles Reconsideration of policy in relation to re/insuring high-carbon businesses and facilities The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 BYD E6 all-electric car Range 400 km
- 21. Doing more…. Insurance industry in UK and worldwide has enormous clout Lobby CBI, UK government and international community to support emissions cuts in line with science Get involved in climate change activities: Fund research Fund adaptation measures HSBC USD100 million into climate-change related research and adaptation Munich Re: €100 million investment in renewables The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003
- 22. Setting an example Prioritise emissions reductions within the company Get carbon audited Commit to 10:10 – a 10 percent emissions reduction in 2010 (Waitrose, Microsoft, 02) Buy renewable energy (Co-op uses 99% renewable sources) The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003 http://www.1010uk.org/
- 23. In conclusion Currently on course for climate catastrophe Augmented by resource depletion the global picture from 2030 looks dire 5 days of talks left to reach agreement ahead of Copenhagen (at least 25% cut by 2020) Maybe 6 years to stabilise emissions Lobbying by business is increasingly critical Insurance sector must now play its part to the full.....or suffer the consequences The information contained in this document is strictly proprietary and confidential ©Benfield Hazard Research Centre 2003