Here we highlight the top stories of 2020 that GC Capital Ideas has presented on managing risks associated with climate change.
1. Protecting our Planet and the Public Purse: Climate change is expensive. A recent Moody’s Analytics study predicts the economic consequences of climate change through six impact channels – sea-level rise, human health effects, heat effects on labor productivity, agricultural productivity, tourism and energy demand. Guy Carpenter’s report on public sector risk, Protecting Our Planet and the Public Purse, highlights how the risk landscape for public-sector entities is changing at an unparalleled rate, with extreme weather set to dominate government agendas for decades to come.
2. Video: The Reinsurance Market and Climate Change: In this video with The Insurer, Jessica Turner, Senior Vice President, Catastrophe Advisory at Guy Carpenter, discusses how crucial it is that companies today, as well as the (re)insurance market, incorporate climate change into business considerations as investors, ratings agencies and financial regulators apply pressure on firms.
3. Wildfire: Understanding and Modeling the Risk: A pattern has emerged related to the joint concept of greater precipitation in winter months coupled with greater evaporation in summer months, both driven by a warming climate. A wet winter allows grasses to grow, which dry out during excessively hot summers, and become receptive fuel for fire, especially during offshore wind events like the Santa Ana Winds. The 2017 and 2018 wildfire seasons are examples of escalating property losses from wildfire associated with average to wet winters followed by record-breaking heat during the summer months, which then extend into warm and dry autumn wind seasons. according to Alexander Van Dijk, President U.S. Branches, and Kimberly Roberts, North America Peril Advisory, Guy Carpenter.
4. Planning for the Unexpected – COVID-19 is a Dry Run for Climate Catastrophes: Minimizing the risk of green swans (complex, hard-to-anticipate, climate-related shocks) requires that global net emissions peak immediately and reduce to zero by the middle of the century. This would require the ambition of national emissions reduction targets to quintuple, necessitating a dramatic step change in policies and regulations that would impose inevitable costs on high-carbon sectors with knock-on consequences for the financial sector, according to Rob Bailey, Director of Climate Resilience at Marsh & McLennan Advantage Insights.