31 March 2014 News

World is ill-prepared for climate change

The world is ill-prepared for the potentially devastating consequences of global warming, according to an influential report, which could shape the strategic thinking of insurers and reinsurers.

The Intergovernmental Panel on Climate Change (IPCC) has issued a report that says the effects of climate change are already occurring on all continents and across the oceans, but the world is ill-prepared. It reports that increasing magnitudes of warming increase the likelihood of severe and pervasive impacts that may be surprising or irreversible.

The report, titled Climate Change 2014: Impacts, Adaptation, and Vulnerability, from Working Group II of the IPCC, details the impacts of climate change to date, the future risks from a changing climate, and the opportunities for effective action to reduce risks.

The report found that risk from a changing climate comes from vulnerability (lack of preparedness) and exposure (people or assets in harm’s way) overlapping with hazards (triggering climate events or trends). Each of these three components can be a target for smart actions to decrease risk.

The report concludes that responding to climate change involves making choices about risks in a changing world. The nature of the risks of climate change is increasingly clear, though climate change will also continue to produce surprises.

“We live in an era of man-made climate change,” said Vicente Barros, Co-Chair of Working Group II. “In many cases, we are not prepared for the climate-related risks that we already face. Investments in better preparation can pay dividends both for the present and for the future.”

Adaptation to reduce the risks from a changing climate is now starting to occur, but with a stronger focus on reacting to past events than on preparing for a changing future, according to Chris Field, co-chair of Working Group II.

“Climate-change adaptation is not an exotic agenda that has never been tried. Governments, firms, and communities around the world are building experience with adaptation,” Field said. “This experience forms a starting point for bolder, more ambitious adaptations that will be important as climate and society continue to change.”

“With high levels of warming that result from continued growth in greenhouse gas emissions, risks will be challenging to manage, and even serious, sustained investments in adaptation will face limits,” said Field.

Adaptation can play a key role in decreasing these risks, Barros noted. “Part of the reason adaptation is so important is that the world faces a host of risks from climate change already baked into the climate system, due to past emissions and existing infrastructure,” said Barros.

Field added: “Understanding that climate change is a challenge in managing risk opens a wide range of opportunities for integrating adaptation with economic and social development and with initiatives to limit future warming. We definitely face challenges, but understanding those challenges and tackling them creatively can make climate-change adaptation an important way to help build a more vibrant world in the near-term and beyond.”

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