Preamble

"Imagining the unmanageable" was to be the subtitle for the Climate Change Futures report. But the devastating series of intense, immense fall hurricanes besetting the United States displaced it. What were once extreme scenarios for the US have occurred, and the consequences have cascaded across the physical landscape, overwhelming the capacities of health, ecological and economic systems to absorb, adapt to and manage the change.

Hurricane Katrina killed over 1,000 people, displaced over a million people, and spread oil, toxins, microorganisms and deep losses throughout the US Gulf Coast. It revealed deep-seated inequities and vulnerabilities, and the shock waves have reverberated through all sectors of society. The need for prevention has become embedded into our future political landscape.

While no one event is diagnostic of climate change, the relentless pace of unusually severe weather since 2001—prolonged droughts, heat waves of extraordinary intensity, violent windstorms and more frequent "100-year" floods—is descriptive of a changing climate.

The reasons for the changed weather patterns are well understood. Five

7Reprinted with permission from the Center for Health and the Global Environment. 2005. Climate change futures: health, ecological and economic dimensions. Cambridge, MA: Harvard Medical School. Sponsored by Swiss Re and the United Nations Development Programme.

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years ago, Levitus and colleagues at the US Department of Commerce's National Oceanic and Atmospheric Administration reported that the world's oceans had warmed to a depth of two miles in five decades. This year Barnett and colleagues at the Scripps Institution of Oceanography reported that the oceans had absorbed 84% of the globe's warming and that the warming pattern is unmistakably attributable to human activities.

Because of the natural cycles on which global warming is superimposed, the overall frequency of hurricanes ebbs and flows. But, since the 1970s, tropical storm destructiveness (peak winds and duration) (Emanuel 2005) and the frequency of category 4 and 5 storms (Webster et al. 2005) have essentially doubled. These observations are correlated with warming tropical seas, and the scientists project that continued warming will likely enhance the frequency of large storms still further.

Warm sea surfaces evaporate quickly and, with the deep ocean warming, the water replenishing that which evaporates is also warm and fuels subsequent storms. A warmer atmosphere also holds more water vapor, and the accelerated water cycle generates more droughts and more floods (see Figure 1-9; Trenberth, 2005).

This fall's succession of megastorms is, at the very least, a harbinger of what we can expect more of in a changing climate (Kerr 2005). The series may also mark a turning point in our understanding of how an energized climate system is exaggerating natural phenomena and of just how rapidly climate has changed.

This multidimensional assessment of climate change includes trends, case studies and scenarios—with a focus on health, ecological and economic dimensions. One surprise is the vulnerability of the energy sector—the primary source of increased heat in Earth systems. The risks to oil production compound the threats to the electricity grid from heat waves and the instabilities of pipelines grounded in thawing tundra.

At the same time, recovery, adaptation and prevention open the door to enormous opportunities. Developing a diversified portfolio of safe, well-distributed and nonpolluting energy sources, with hybrids and complementing technologies, can fortify energy security, bolster public health, promote economic activity and help stabilize the climate. Bold initiatives and innovative measures spearheading a well-funded, well-insured clean energy transition may be just the components needed to build a sustainable engine of growth for the 21st century.

Paul Epstein and Evan Mills

Executive Summary

Climate is the context for life on earth. Global climate change and the ripples of that change will affect every aspect of life, from municipal budgets for snow-plowing to the spread of disease. Climate is already changing, and quite rapidly.

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CLIMATE CHANGE CHALLENGES 81

FIGURE 1-9 Warm ocean waters fuel hurricanes. This image depicts the three-day average of sea surface temperatures (SSTs) from August 25-27, 2005, and the growing breadth of Hurricane Katrina as it passed over the warm Gulf of Mexico. Yellow, orange and red areas are at or above 82°F (27.7°C), the temperature needed for hurricanes to strengthen. By late August SSTs in the Gulf were well over 90°F (32.2°C). SOURCE: NASA/Goddard Space Flight Center/Scientific Visualization Studio.

FIGURE 1-9 Warm ocean waters fuel hurricanes. This image depicts the three-day average of sea surface temperatures (SSTs) from August 25-27, 2005, and the growing breadth of Hurricane Katrina as it passed over the warm Gulf of Mexico. Yellow, orange and red areas are at or above 82°F (27.7°C), the temperature needed for hurricanes to strengthen. By late August SSTs in the Gulf were well over 90°F (32.2°C). SOURCE: NASA/Goddard Space Flight Center/Scientific Visualization Studio.

With rare unanimity, the scientific community warns of more abrupt and greater change in the future.

Many in the business community have begun to understand the risks that lie ahead. Insurers and reinsurers find themselves on the front lines of this challenge since the very viability of their industry rests on the proper appreciation of risk. In the case of climate, however, the bewildering complexity of the changes and feedbacks set in motion by a changing climate defy a narrow focus on sectors. For example, the effects of hurricanes can extend far beyond coastal properties to the heartland through their impact on offshore drilling and oil prices. Imagining the cascade of effects of climate change calls for a new approach to assessing risk.

The worst-case scenarios would portray events so disruptive to human enterprise as to be meaningless if viewed in simple economic terms. On the other

82 GLOBAL CLIMATE CHANGE AND EXTREME WEATHER EVENTS

hand, some scenarios are far more positive (depending on how society reacts to the threat of change). In addition to examining current trends in events and costs, and exploring case studies of some of the crucial health problems facing society and the natural systems around us, "Climate Change Futures: Health, Ecological and Economic Dimensions" uses scenarios to organize the vast, fluid possibilities of a planetary-scale threat in a manner intended to be useful to policymakers, business leaders and individuals.

Most discussions of climate impacts and scenarios stay close to the natural sciences, with scant notice of the potential economic consequences. In addition, the technical literature often "stovepipes" issues, zeroing in on specific types of events in isolation from the real-world mosaic of interrelated vulnerabilities, events and impacts. The impacts of climate change cross national borders and disciplinary lines, and can cascade through many sectors. For this reason we all have a stake in adapting to and slowing the rate of climate change. Thus, sound policymaking demands the attention and commitment of all.

While stipulating the ubiquity of the threat of climate change, understanding the problem still requires a lens through which the problem might be approached. "Climate Change Futures" focuses on health. The underlying premise of this report is that climate change will affect the health of humans as well as the ecosystems and species on which we depend, and that these health impacts will have economic consequences. The insurance industry will be at the center of this nexus, both absorbing risk and, through its pricing and recommendations, helping business and society adapt to and reduce these new risks. Our hope is that Climate Change Futures (CCF) will not only help businesses avoid risks, but also identify opportunities and solutions. An integrated assessment of how climate change is now adversely affecting and will continue to affect health and economies can help mobilize the attention of ordinary citizens around the world and help generate the development of climate-friendly products, projects and policies. With early action and innovative policies, business can enhance the world's ability to adapt to change and help restabilize the climate.

Why Scenarios?

CCF is not the first report on climate change to use scenarios. The Intergovernmental Panel on Climate Change (IPCC) employs six of the very long-term and very broad scenarios representative of the many scenarios considered. Other organizations have explored scenarios of climate trajectories, impacts for some sectors and the mix of energy sources, to explore the potential consequences of trends and actions taken today. Scenarios are not simple projections, but are stories that present alternative images of how the future might unfold. Handled carefully, scenarios can help explore potential consequences of the interplay of multiple variables and thereby help us to make considered and comprehensive decisions.

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The IPCC scenarios, contained in The Special Report on Emissions Scenarios (SRES), make projections into the next century and beyond and assume that climate change will be linear and involve gradual warming. But events of the last five years have overtaken the initial SRES scenarios. Climate has changed faster and more unpredictably than the scenarios outlined. Many of the phenomena assumed to lie decades in the future are already well underway. This faster pace of change on many fronts indicates that more sector-specific, short-term scenarios are needed.

With this in mind, the CCF scenarios are designed to complement the far-reaching IPCC framework. Drawing upon the full-blown, long-term scenarios offered by the IPCC, we have developed two scenarios that highlight possibilities inadequately considered in past assessments of climate change impacts.

Both CCF scenarios envision a climate context of gradual warming with growing variability and more weather extremes. Both scenarios are based on "business-as usual," which, if unabated, would lead to doubling of atmospheric CO2 from pre-industrial values by midcentury. Both are based on the current climate trends for steady warming along with an increase in extremes, with greater and costlier impacts. The compilation of extreme weather events of all types shows a clear increase over the past decade in the number of extremes occurring in both hemispheres (see Figure 1-10, below).

Overall costs from catastrophic weather-related events rose from an average of US $4 billion per year during the 1950s, to US $46 billion per year in the 1990s, and almost double that in 2004. In 2004, the combined weather-related losses from catastrophic and small events were US $107 billion, setting a new record. (Total losses in 2004, including non-weather-related losses, were US $123 billion; Swiss Re 2005a). With Hurricanes Katrina and Rita, 2005 had, by September, broken all-time records yet again.

Meanwhile, the insured percentage of catastrophic losses nearly tripled from 11% in the 1960s to 26% in the 1990s and reached 42% (US $44.6 billion) in 2004 (all values inflation-corrected to 2004 dollars, Munich Re NatCatSERVICE).

As an insurer of last resort, the US Federal Emergency Management Agency has experienced escalating costs for natural disasters since 1990. Moreover, in the past decade, an increasing proportion of extreme weather events have been occurring in developed nations (Europe, Japan and the US) (see chart below).

The first impact scenario, or CCF-I, portrays a world with an increased correlation and geographical simultaneity of extreme events, generating an overwhelming strain for some stakeholders. CCF-I envisions a growing frequency and intensity of weather extremes accompanied by disease outbreaks and infestations that harm humans, wildlife, forests, crops and coastal marine systems. The events and their aftermaths would strain coping capacities in developing and developed nations and threaten resources and industries, such as timber, tourism, travel and the energy sector. The ripples from the damage to the energy sector would be felt throughout the economy.

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