Analysis shows climate change is already increasing financial losses from weather-related catastrophes
Global warming is already causing an increase in financial losses from extreme weather events according to the latest report by the Intergovernmental Panel on Climate Change (IPCC) and Risk Management Solutions (RMS).
Dr. Robert Muir-Wood, chief research officer of Risk Management Solutions (RMS) and a lead author of one chapter for the IPCC report, said: "It is clear that weather-related hazards are already increasing in some regions of the world due to climate change, and as a result, financial losses from extreme weather catastrophes, such as floods, droughts, heatwaves and storms, are also increasing. The increases in extreme weather have placed our current systems for risk management, such as insurance, under stress. Future predicted increases in extreme weather events will require accelerating investments in adaptation strategies for human populations."
Dr. Muir-Wood's analysis of insurance industry and economic loss data has shown that financial losses from weather-related catastrophes have increased by an average of 2% per year since the 1970s, even when changes in wealth, inflation and population growth are taken into account. The research was used by Sir Nicholas Stern in his review of the economics of climate change to calculate that the costs of extreme weather alone could reach 0.5%-1% of world GDP by the middle of the century, and that the costs will keep rising as the world continues to warm.
Dr Herweijer, RMS Future Climate principal scientist, commented: "It is not only governments that will have to adapt to these greater hazards, but also businesses. In addition to the issue of corporate social responsibility, companies must evaluate how climate change may impact their services, infrastructure and investments."
