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Climate Change and Reinsurance, Part II

Part I made the case for a clear conflict of interest when reinsurers attribute or project increasing disasters because of climate change. Part III will explore the question, to what extent will climate change be responsible for increasing disasters and disaster costs in the future?

Now in Part II we turn to the merits of these claims, which are made by many beyond just some in the reinsurance industry. This post looks backwards and asks, is climate change responsible for the growth in disasters and disaster costs up to the present? The answer, detailed below, is "Not at all." There is no scientific basis for attributing the increasing trend in disasters to changes in climate, regardless of cause. This is for two reasons. First, the IPCC has found very little evidence for trends in weather extremes, both in its 1996 and 2001 reports. Second, given the magnitude of growth in disasters, there is clearly much going on beyond any possible changes in climate. The reason for increasing loses lies entirely with changes in societal vulnerability to disasters. Dan Sarewitz and I make this case in an article in The New Republic this week.

I was first drawn to this subject in 1995 when I was working at the National Center for Atmospheric Research with Mickey Glantz as a post-doc on a project on extreme weather events and impacts. At that time the trend of increasing disasters and disaster costs was clear. Munich Re observed this in a 1996 press release:

" the trend towards ever more and ever costlier catastrophes continues. In comparison with the 1960s, five times as many natural catastrophes occur nowadays, costing the world's economies - taking inflation into account - eight times and the insurance industry fifteen times as much. The Munich Re sees the main reasons for this trend in the increasing concentration of population and values in the cities, which are constantly growing in size and number and are often located in high-risk zones, and in the greater susceptibility of modern industrial societies to disruptions in the infrastructure."

And in this press release Munich Re was cautiously speculating at changes in climate as a factor contributing to the increasing disasters:

"What is more, in many regions of the world the increasingly discernible changes in the environment and climate are leading to a greater probability of new extremes in terms of temperatures, amounts of precipitation, water levels, wind velocities, and other parameters that are often finally reflected in catastrophes. This is why the Munich Re has long been pleading for measures to be taken with a view to curbing man-made changes in the environment."

But that same year the IPCC released its Second Assessment Report in which it found that while weather extremes varied over different times and places, it could find no coherent secular global trend of increasing extreme events:

"There are inadequate data to determine whether consistent global changes in climate variability or weather extremes have occurred over the 20th century. On regional scales there is clear evidence of changes in some extremes and climate variability indicators (e.g., fewer frosts in several widespread areas; an increase in the proportion of rainfall from extreme events over the contiguous states of the USA). Some of these changes have been toward greater variability; some have been toward lower variability."

So if extreme weather events were not clearly increasing in frequency or magnitude, but disasters were increasing dramatically, then the obvious explanation had to do with, as Munich Re stated, changes in characteristics of populations vulnerable to disasters. So we initiated a range of research projects to explore the sensitivity of trends and projections in disasters to climate factors and societal factors. The results of this research have been about 20 or so peer-reviewed papers that present a consistent message: The historical trend of growing disasters and disaster losses can be explained entirely by changes in society that create greater vulnerability to those losses. Given that the IPCC found in 1996 that there were no apparent trends in weather extremes, this conclusion makes perfect sense. When Munich Re speculated in 1996 about changes in the climate as a cause of increasing disasters, they were simply wrong. They were right when they concluded that the main reasons for the trend of increasing disasters was to be found in societal change.

Now, have things changed in scientific perspectives on extreme events over the past decade? No.

Losses have continued to increase, and the IPCC still has not identified any secular trends in weather extremes, with only one exception. The IPCC found no long-term global trends in tropical or extra-tropical cyclones (i.e., hurricanes or winter storms), in "droughts or wet spells", or in "tornados, hail, and other severe weather". What it did find was "a widespread increase in heavy and extreme precipitation events in regions where total precipitation has increased, e.g., the mid- and high latitudes of the Northern Hemisphere." But perhaps paradoxically, it also found "an increase (or decrease) in heavy precipitation events may not necessarily translate into annual peak (or low) river levels". Indeed, while the IPCC found some changes in streamflow, it did not identify changes in streamflow extremes, i.e., floods, and concluded on a regional basis, "Even if a trend is identified, it may be difficult to attribute it to global warming because of other changes that are continuing in a catchment."

So the picture painted by the IPCC in 2001 had considerable more nuance than in 1996, but the underlying message changed very little. The IPCC found no trend in extremes that could explain any of the increasing losses related to extreme events. During this time I was participating in several projects looking at the complex relationship of precipitation and flood damages. We concluded,

" an analysis of the damage record shows that at a national level any trends in extreme hydrological floods are not large in comparison to the growth in societal vulnerability. Even so, there is a documented relationship between precipitation and flood damages, independent of growth in national population: as precipitation increases, so does flood damage. From these results it is possible to argue that interpretations in policy debate of the various recent studies of precipitation and streamflow have been misleading. On the one hand, increasing "extreme" precipitation has not been the most important factor in documented increase in flood damage. On the other hand, evidence of a lack of trends in peak flows does not mean that policy makers need not worry about increasing precipitation or future floods. Advocates pushing either line of argument in the policy arena risk misusing what the scientific record actually shows."

So yes, increasing precipitation contributes to increasing flood damage, but the precise amount of this increase is small and hard to identify in the context of the much larger effects of growing societal vulnerability to flood damages. For the details of our analysis, and an explanation for why regional and local trends are much more significant than global trends for considerations of flood damage, see this paper:

Pielke, Jr., R.A., and M.W. Downton, 2000: Precipitation and Damaging Floods: Trends in the United States, 1932-97. Journal of Climate, 13(20), 3625-3637.

And this report:

Pielke, Jr., R.A., M. Downton, J. Z. B. Miller, S. A. Changnon, K. E. Kunkel, and K. Andsager, 2000: Understanding Damaging Floods in Iowa: Climate and Societal Interactions in the Skunk and Raccoon River Basins, Environmental and Societal Impacts Group, National Center for Atmospheric Research, Boulder, CO, August.

The Bottom Line

The bottom line is that there is absolutely no scientific basis for attributing any part of the global, decades-long trend of an increasing number of disasters and disaster losses to changes in climate, irrespective of the reasons for those changes. As Dan Sarewitz and I argued in The New Republic this week those who perpetuate such claims, whether they are in the reinsurance industry, the UN, advoacy groups, or the scientific communtiy, are either "ill-informed or dishonest."

Having discussed the past, in Part III we will turn our attention to the future and ask, to what extent will climate change be responsible for increasing disasters and disaster costs in the future?

A Final Note:

To be fair I should be cautious about tarring the reinsurance industry with too broad a brush. Many in the industry are very responsible in making claims about the science of disasters. For example,

"Swiss Re is a specialist in reinsurance: it insures smaller insurers against large-scale disasters. Its records of disasters since 1970 indicate that the rate of natural catastrophes accelerated in the 1990s, which is also the decade when rising global temperatures have become clearly apparent. But Swiss Re executive Henner Alms said the company was "cautious" about attributing this directly to man-made climate change."