The fairly unlikely coalition of Michael Bloomberg, Hank Paulson and Tom Steyer announced the launch of an initiative to assess the potential impact of climate change on the U.S. economy in a recent Op-Ed in the Washington Post: http://www.washingtonpost.com/opinions/a-climate-change-risk-assessment/2013/10/03/d4f70e3c-2bb5-11e3-8ade-a1f23cda135e_story.html?hpid=z4
According to their website, www.riskybusiness.org, the initiative will help answer the question: "How much economic risk does the United States face from the impacts of climate change?"
"An independent risk assessment will combine existing data on the current and potential impacts of climate change with original research that will quantify potential future costs. The results, to be released in the summer of 2014, will reveal the likely financial risk the United States faces from unmitigated climate change.
An engagement effort will target the economic sectors most at risk from a changing climate, and begin the process of helping leaders from across these sectors prepare a measured response to the risks they face. The engagement will be led by a risk committee composed of top national and regional leaders from across the American economic and political spectrum."
It all sounds very admirable and will hopefully raise awareness of climate issues but I find it hard to believe that this is something new. Indeed, the Casualty Actuarial Society announced a partnership with insurance associations in the U.S. and Canada to achieve something very similar in 2012: http://www.casact.org/press/index.cfm?fa=viewArticle&articleID;=2094 (and produced its first report later that year: http://www.casact.org/research/ClimateChangeRpt_Final.pdf)
Am I missing something? How robust are the insurance industry's climate models and what do they show about the future? Do we expect to see massive premium inflation and increased demand for disaster coverage and, if so, where will the capital come from to fund it all?
Category: Climate/natural disasters: Climate change, Disaster risk, Resilience
Location: United States