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Climate Change and Re-Insurance: The Human Security Issue

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Climate change, its existence, causes and effects, has been disputed by researchers, academics and policy makers. The given degree of international consensus varies greatly between those most affected by changes to climatic conditions in contrast to those who are estimated to only experience a limited effect.

Controversially, it can also be claimed that some regions are set to gain from climate change such as the polar region nations currently disputing resource claims and logistic networks. In analysis of available data, research suggests the increased intensity of storms, hurricanes, cyclones, flooding, droughts, bushfires, mudslides and hailstorms along with increased temperatures, rising sea levels, and changing to pressure systems. With climate change as a global phenomenon, not isolated to a certain region, the interest of stakeholders remains strongest in those with the ‘smallest’ voice such as the coastal areas, islands, commonly catastrophe prone and ‘future’ catastrophe prone regions in South East Asia.

 

The re-insurance industry does not have the luxury of time in which to debate the ‘possibility,’ of climate change but rather to focus on the ‘probability’ of the consequences. With the cost of natural disasters predicted to rise exponentially in coming decades, the issue of human security is measured in economic terms.  The economic effect of climate change is vague with popular measures of market costs, changes in quality of life, lives lost, species lost and variations in cost distribution and subsequent benefits. These costs are summoned into willingness to pay (the readiness of people to exchange their capital or income for improved human security) and willingness to accept compensation (the amount of compensation needed to see inhabitants forgo certain standards and accept deteriorating conditions).  

With 2005 noted by the insurance industry as holding the highest economic loss (USD $230 billion), the economic implications of natural catastrophes is apparent holding 2-9% of GDP in aggregated monetized damage. As 1-1.5% of this aggregated monetized damage occurs in OECD nations and 2-9% in developing nations the interests of regional stakeholders can be distinguished according to strength of climatic conditions on their area. In response, the re-industry has moved to new catastrophe modeling systems, developed new insurance products, flaunted ‘green’ initiatives and created new defenses against climate-related claims in order to analyse and more effectively assess the probability of risks and integrate problem solving mechanisms.

As in all industries, re-insurance is a case of supply and demand with dominant players holding the reins of the insurance industry to mitigate larger risks by providing financial backing, reduced exposure to insolvency, and stability due to the geographically spread risk. The North American market has long been the most strongly insured of the regional global markets with the Asian region seen as the rising star due to the increased economic development and subsequent demand for insurance. Depending on the region, insurance coverage as well as government relief funding, will be limited in relation to the location’s level of risk. As the South East Asian region hosts increasingly prospering nations, situation in medium to high risk areas for natural disasters, the risk must be carefully calculated; after all, it is a business. This region holds a high propensity for natural disasters including earthquakes, tsunamis, flooding, mudslides, and storms whereby currently effected regions are expected to be joined with newly affected regions due to global warming.

Whilst the economic imperative is addressed through the continuous revision of insurance policy and claim trends, the question of ‘protection’ remains. The role of insurance is that of a safety net; to catch those who stumble and fall in situations which could not have been circumvented.  With the individual and the community at the centre of the human security issue the issue prevails; who will catch them when they fall?

Human security surpasses traditional notions of security to comprehensively include environmental, political, social and economic aspects. In the case of environmental security, the threat thereto is not isolated to a particular individual or community, but rather an intensified affected core with global repercussions. Risk management, as in the case of insurance risk, credit risk, market risk, and operational risk, is the cornerstone of re-insurance with underwriting controlling the limits of insurance and identifying information such as in the case of natural catastrophes and environmental threats. Re-insurance is not a philanthropic concept or support network, but rather an industry interdependent with the global economy and market trends whereby weakened global financial markets and investor pessimism are critical factors.
The re-insurance industry, particularly internationally, is marginally transparent with the safety net not extending to all areas. The series of ‘no-go zones’ demonstrates the economic imperative and business rationalism which conducts the insurance, and indeed protection, of regions. The ‘no-go zones’ are specific geographic regions considered too ‘high risk’ for re-insurance and subsequently insurance companies to insure. Thus, the plight of these areas is dependent on effective fiscal policy and a strong national welfare system to mitigate risks associated with climate change.

In the case of the South East Asian region, particularly in coastal areas and islands, the ‘no-go zones’ will have a profound effect on human security as inhabitants seek protection and welfare support. From this it can be suggested that environmental peril may be grounds on which seek and be granted asylum. This may lead to new migration trends and subsequently strain inter-regional relations, immigration policies and welfares systems as well as setting precedents for future ‘no-go zones’ and other un-protected areas.
The economic paradigms dominating the global must be considered in relation to the interests of human securities by examining the re-insurance market and the implications for humanitarian issues in the South East Asian region and subsequent international policy development to cater for social developments.

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Modern Diplomacy Advisory Board, Chairman Geopolitics of Energy Editorial Member Professor and Chairperson for Intl. Law & Global Pol. Studies contact: anis@bajrektarevic.eu

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Floods in Europe, Turkey, China and India

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The residents of Erfurt in Thuringia, where Martin Luther lived and studied, had never seen anything like it.  The main street became a raging river washing away parked cars and anything else besides that emerged from flooded first floors.

The flooding in northwest Germany and Belgium as the gentle meandering Ahr River transformed into a torrent, overflowing its banks and devastating this wine producing region stunned  Angela Merkel  by the extent of damage in the towns and valleys.  Close by in Schuld nearly half of the houses are completely destroyed, many simply disappeared, washed away, and the rest suffered serious damage.

West of Cologne, the Erft River submerged streets and houses in Blessem.  The sides of a gravel pit gave way as it filled with water and parts of a castle and several houses collapsed into the huge hole.  Southwest of Cologne in the Eifel region, the charming old-world tower of Ban Munstereifel was inundated and the charming pedestrian mall lined with centuries old buildings was ripped up by the waters.

The story was repeated in Liege, Belgium’s third largest city, as the Meuse River spilled over its banks and into the city turning the streets into rushing waters and carrying away cars, furniture and unfortunately, people.  The river had risen by about 10 feet in one day.  Almost all of Belgium was under flood alert as other rivers rose.  By the time it was over at least 20 had died, many were missing and the prime minister had declared a day of mourning.

Across the channel, a fierce storm flooded West London and affected subway tunnels bringing transport to a stop.  Again, roads turned into rivers as a month’s rain fell in one day.  Affecting large portions of southern England, it flooded rail lines even in Southampton.

Earlier in the month, tropical storm Elsa flooded subways in parts of New York.  Meanwhile, torrential rains have flooded subways in Zhengzhou, the capital of Henan province, trapping passengers.

The rains have battered the Chinese province for almost a week.  Home to more than 99 million, the region has suffered an estimated $190 million of damage.  At least 33 people are feared dead, 12 in the Zhengzhou subway when it was flooded.  Terrified survivors on Line 5 report water slowly rising up to their necks as they stood on the seats.  Dams have burst, reservoirs have overflowed as have rivers, affecting almost a half billion people according to People’s Daily. 

Catastrophic floods in Artvin Province in Turkey, this week repeat the story.  Cars washed away down streets turned into torrents when the cities of Artvin and Arhavi were inundated.  Also this week in India the monsoon season in Maharashtra has brought extremely heavy rains with flooding. 

The terms being used for these floods are ‘once-in-a-lifetime’ or ‘once-in-a-thousand-year events.  But the coincidence of so many of these across the globe begs the question of whether the climate crisis has altered the norm.  Will another of these ‘thousand-year’ events hit us next year or decade?  Time will tell.  Our hearts go out to the people who are suffering… those who have lost loved ones and those who have lost what they owned and their peace of mind.

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Climate change could spark floods in world’s largest desert lake

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UNEP/Duncan Moore / 19 Jul 2021

For years it appeared as though Lake Turkana, which sits in an arid part of northern Kenya, was drying up.

Its main river inflows had been muffled by dams and many feared water levels were poised to drop by two-thirds, causing the lake to cleave into two smaller bodies of water. It was, one report said, an African “Aral Sea disaster in the making” – where only 10 per cent remains of the original sea.

But a new study from the United Nations Environment Programme (UNEP) predicts a far wetter future for Lake Turkana – and possibly a more perilous one for the 15 million people who live on its shores.

The report found that over the next 20 years, climate change could likely lead to heavier rains over Lake Turkana’s river inflows, which would raise water levels in the lake itself and increase the likelihood of severe flooding.

The study urged officials in Kenya and Ethiopia, which both border Lake Turkana, to prepare for a future in which once-rare floods, such as those that hit the region in 2019 and 2020, are regular occurrences.

“Many people think that climate change is a problem for the future,” says Frank Turyatunga, Deputy Head of UNEP’s Africa Office. “But as Lake Turkana shows, it’s happening now and it’s already forcing people to adapt to new conditions.”

Lake Turkana, the world’s largest desert lake, is part of the Omo-Turkana basin, which stretches into four countries: Ethiopia, Kenya, South Sudan and Uganda. The basin is home to many rare plants and animals.

Since 1988, Ethiopia has built a series of hydroelectric dams on its main tributary, the Omo River, leading to predictions of Lake Turkana’s demise.

Climate projections

Using sophisticated water resources modelling and climate change scenario analysis, the new UNEP report found that up to eight human settlements around the lake could be inundated by flooding periodically. While severe, abrupt flooding has been rare, climate change projections foresee this becoming more regular and impacting more people if adaptation measures are not put in place.

The report called for improved international cooperation and adaptation measures, including reforestation, agroforestry and avoiding construction in areas at risk of flooding.

“In the last two years, rising water levels in Lake Turkana have damaged pastureland, inundated buildings and forced people to flee their homes,” says Tito Ochieng, Director of Water in Kenya’s Turkana County. ”But there is still a mindset in Kenya that lake water levels are constantly falling, which makes planning difficult.”

The study also found evidence of rising water levels in the eight lakes that line Kenya’s Rift Valley. Severe flooding in those lakes in 2019 and 2020 damaged homes and infrastructure – and even reportedly led to a spike in deadly crocodile attacks.

Africa stands out disproportionately as the most vulnerable region in the world to climate change. This vulnerability is driven by the prevailing low levels of socioeconomic growth in the continent. While climate change is global, the poor are disproportionately vulnerable to its effects.

UNEP’s climate change work in Africa supports countries to implement their climate action commitments – Nationally Determined Contributions (NDCs) – to meet food security, create income and opportunities for youth, and economic expansion.

Regional cooperation

The report was part of a wider project designed to accelerate cooperation in the border areas between Ethiopia, Kenya and Somalia.

The project also developed an open-source information portal on the basin, based in part on satellite imagery. It contains data on land cover, water quality and soil moisture, and examines the various climate change scenarios.

The report follows the launch of the UN Decade on Ecosystem Restoration 2021-2030, a global push to revive natural spaces. It is also part of UNEP’s wider work to monitor and restore freshwater ecosystems worldwide, supporting Sustainable Development Goal 6.

UN Environment

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Six things you can do to bring back mangroves

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Don’t be fooled by their modest appearance: mangroves are important players in some of the greatest challenges facing the world today. They provide a defense between land and sea, absorb carbon, contribute to economic and food security, and are home to some of the most rare and colourful species.

But mangroves are disappearing at an accelerating rate.In some areas of the Western Indian Ocean region – one of the two most important global mangrove hotspots, together with Southeast Asia – more than 80 per cent of mangroves have already been lost.

The United Nations (UN) Decade on Ecosystem Restoration is a global rallying cry to change our relationship with nature – from degradation to restoration. Here are six things you can do to start bringing back mangroves today.

1. Understand the importance of mangroves.

Only with healthy ecosystems can we enhance people’s livelihoods, counteract climate change, and stop the collapse of biodiversity.

UNEP research shows that mangrove ecosystems underpin global and local economies, by supporting fisheries, providing other food sources and protecting coastlines. In fact, every hectare of mangrove forest represents an estimated US$33–57,000 per year.  

They’re also important protectors – sheltering land and coastal communities from storms, tsunamis, rising sea levels and erosion. And with the world at risk of a temperature rise of over 3°C this century, mangroves are also an invaluable ally in the race to adapt. They extract up to five times more carbon from the atmosphere than forests on land, and protecting mangroves is 1000 times less expensive, per kilometer, than building seawalls.

Learn more about mangrove ecosystems in this short video; and their role in climate change adaptation in this animation.

2. Understand what is driving their loss.

Home to forty per cent of the world’s population, coastlines are among the most densely-populated areas on Earth. Consequent development of coastlines – clearing mangrove forests to create space for buildings, and to farm fish and shrimp – is the main driver of mangrove loss. Worldwide, this has caused the loss of 20 per cent of mangrove ecosystems. 

Pollution also plays a role. Because they form a protective line between coasts and ocean, mangroves are effectively a “plastic trap”. When plastic bags and litter cover roots and sediment layers, it can starve mangroves of oxygen; and can harm sea animals.

3. Make sustainable choices.

The choices we make are a powerful way to express our values and to affect consumption and demand. Ask questions about the food you consume; choose foods that are sustainably sourced; say no to single-use plastic and reduce consumption in general.   

Learn more about what you can do through the UN Environment Programme (UNEP) Clean Seas campaign, and see examples of restoration supportive choices in the Ecosystem Restoration Playbook.

4. Learn how restoration works.

Before planting new mangroves, it is important to understand the cause of forest degradation or disappearance. In the case of pollution, over-harvesting or other causes that can be eliminated, mangroves can recover naturally.

When recovery requires human intervention, it is important to follow key steps, like involving local communities, selecting native seedlings and establishing a functioning nursery. To learn more, see UNEP’s Guidelines on Mangrove Ecosystem Restoration, which elaborate each step of the process.

5. Be an advocate and an activist.

Whoever you are, wherever you are, you can begin to take action today. Discuss the importance of mangroves with your friends, family, colleagues and networks. Share information, images and ideas that inspire you.

If you’re not sure where to start, find inspiration in what others are doing. In Kenya and Madagascar, communities have recognized the contribution of mangroves to their own livelihoods and are actively participating in carbon monitoring, reforestation and education to prevent exploitation and ensure the livelihoods of future generations.

To get ideas about actions that could be right for you, play this game; and go to the UN Decade for Ecosystem Restoration Implementers Hub to find out how others are taking the lead in this work.

6. Make some noise.

Despite the scale of the challenge, there are solutions; and some governments are already taking action. Cuba, Haiti, Puerto Rico and the Dominican Republic have prioritized mangrove restoration through the Caribbean Biological Corridor initiative; and in Cuba, mangrove forests still cover 70 per cent of the coastline. Pakistan has committed to planting 10 billion trees by 2023 in an initiative led by Prime Minister Imran Khan and supported by UNEP, and millions – if not billions – of these trees will be mangroves. Restoration pledges from other countries can be found here.

UN Environment

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