Climate Change Costs Could Top $300 Billion Annually
NAIROBI, Kenya, February 5, 2001 (ENS) - One of the world's largest re-insurance firms is warning that climate change could cost the world more than three hundred billion dollars each year.
Only "urgent efforts" to curb emissions of carbon dioxide and the other gases linked with the greenhouse effect, can avert this outcome, says the new report from Munich Re, which has been monitoring the cost of natural disasters since the 1960s.
The report includes information from insurers around the world, members of the United Nations Environment Programme's (UNEP) financial services initiative, which includes 86 companies from 27 countries.
Losses due to more frequent tropical cyclones, loss of land as a result of rising sea levels and damage to fishing stocks, agriculture and water supplies, could annually cost an estimated $US304.2 billion, the insurers predict.
The report assumes that carbon dioxide concentrations will rise to twice pre-industrial levels in 2050. Greenhouse gases are produced by the burning of coal, oil and gas.
The insurers released their report on the eve of the 21st session of UNEP's Governing Council which opens today and continues through Friday. At least 100 environment ministers are expected to attend the meeting at UNEP headquarters in Nairobi. Coping with the rising toll of natural disasters will be high on the agenda.
Dr. Gerhard Berz, head of Munich Re's Geoscience Research group, says, "there is reason to fear that climatic change will lead to natural catastrophes of hitherto unknown force and frequency."
"Studies have indicated, disturbingly, that climatic changes could trigger world wide losses totalling many hundreds of billions of dollars per year," he says.
In the United States, the extra costs of health related measures and more intensive water management may reach nearly $30 billion a year by 2050, the insurers estimate.
"Most countries can expect their losses to range from a few tenths of a percent to a few percent of their gross domestic product each year. And certain countries, especially small island states, could face losses far exceeding 10 percent," says Dr. Berz, who is a certified consulting meteorologist of the German Meteorological Society.
In some low lying states such as the Maldives, the Marshall Islands and the Federated States of Micronesia the losses linked with climate change could, by 2050, exceed 10 percent of their national wealth or Gross Domestic Product.
Klaus Toepfer, executive director of UNEP, said, "The time to act is now. We must all work to reduce emissions of greenhouse gases. But mitigation is not enough. The world has already signed up to a certain level of human induced, climate change, as a result of over a century of industrial emissions primarily from the developed world."
"We must help vulnerable areas of the world, primarily in the developing countries, to adapt to the consequences of global warming. We have a moral responsibility to our fellow men and women to protect them and their families from food shortages to devastating floods," he said.
Toepfer said the latest Intergovernmental Panel on Climate Change report, jointly sponsored by UNEP and the World Meteorological Organization, underscored the need for swift action.
The panel, made up of thousands of scientists from around the world, believes that average temperatures across the world could climb by between 1.4 and 5.8 degrees Centigrade over the coming century.
Globally some of the biggest losses will be in the area of energy, the insurers predict. The water industry worldwide will be facing $47 billion of extra costs annually by 2050.
Flood defense plans to protect homes, factories and power stations from rising sea levels and storm surges may cost on average one billion dollars per year. It is estimated that in low lying countries like the Deltas of Bangladesh and small island nations the cost could be much higher.
Ecosystem losses, including mangrove swamps, coral reefs and coastal lagoons, could run at over $70 billion by 2050, the report estimates. These areas are vital nurseries for fish, upon which many poor communities rely for protein, as well as being homes to marine life.
Agriculture and forestry could lose up to $42 billion worldwide if carbon dioxide levels reach twice their pre-industrial concentrations as a result of droughts, floods and fires.
Natural disasters, including more frequent cyclones and hurricanes, could add a further three billion dollars to the globe's climate related bill.
Munich Re points out that the rise of the so-called mega city with its development of high rise buildings and shanty towns on the outskirts is adding to the risk from natural and climate related disasters.Studies show that cities with more than 10 million people, appear to develop their own weather patterns accompanied by more thunderstorms, torrential rain and hailstorms.
In 1950 only one city, New York, had more than 10 million people. Today there are 20 of which 16 are in the developing world including Bombay, India; Mexico City; Shanghai, China; and Sao Paulo, Brazil.
Dr. Berz says it is vital for the insurance industry to adapt to these future risks by providing long term coverage for natural hazards and by promoting action among nations to reduce the build up of greenhouse gases.
UNEP scientists are developing an early warning system to try and reduce the misery and loss of life as a result of climate related natural disasters.
It hinges on mapping areas where deforestation, destruction of reefs and other environmentally damaging actions are making communities more vulnerable to natural catastrophes including floods, forest fires, mud slides and earthquakes.
Daniel Claasen, a member of the UNEP team, said the aim is to create a "vulnerability index" to give governments and local and regional authorities a measure of how disaster prone areas are.
"A place ranking high on the index might be a mountainside or hilly area where there has been a high rate of deforestation making the soil prone to erosion. Such a site might be especially vulnerable to mudslides and land slips as a result of the kinds of torrential rains triggered by an El Nino," Claasen said.
"With careful planning and respect for the environment we can do much to protect the world's citizens. A modest but sustained investment by governments in disaster mitigation and emergency responses can save lives and avoid tragedies," said Toepfer.
Global warming to cost $300 bln a year - UN reportReuters News Service, Feb. 4, 2001
NAIROBI - An increase in natural disasters as a result of global warming could cost the world over $300 billion annually by the year 2050, a new United Nations commissioned report says.
According to the report from leading German re-insurers Munich Re, the losses would result from more frequent tropical cyclones, loss of land as a result of rising sea levels and consequent damage to agriculture and fishing stock.
"Most countries can expect their losses to range from a few tenths of a percent to a few percent of their gross domestic product each year," Gerhard Berz, head of Munich Re's Geoscience Research group, wrote in the latest edition of the UN Environment Programme's Our Planet magazine.
"And certain countries, especially small island states, could face losses far exceeding 10 percent."
Low-lying states most at risk included the Maldives, the Marshall Islands and the Federated States of Micronesia.
Berz conceded in the article that the calculations may need refining but hoped the statistics will jolt governments and businesses into action in the fight against global warming.
UN climate talks called to plan ways of coordinating cuts in greenhouse gas emissions ended acrimoniously in the Hague in November and major economic powers blamed each other for the collapse of the negotiations.
The Hague conference had sought agreement on implementing a pact reached in 1997 in Kyoto, Japan, which called for developed nations to cut their emissions of gases such as carbon dioxide by an average of five percent from 1990 levels by 2010.
Last month a UN report said average global temperatures could rise by up to 5.8 degrees Celsius over the 21st century, much higher than previously thought.
Berz's report said flood defence schemes to protect homes, factories and power stations from rising sea levels and storm surges could cost an average $1 billion dollars.
The losses of ecosystems such as coral reefs, coastal lagoons and mangrove swamps could cost over $70 billion by 2050.
Munich Re has been monitoring the cost of natural disasters since the 1960s.
Other disaster-related problems would bring the bill to $304.2 billion a year.
The extra costs from health-related measures and more intensive water management could cost the United States nearly $30 billion a year and Europe $21.9 billion annually by 2050, the report says.
Climate Change May Cost World $300Billion per year: Insurer
Dow Jones Newswires, Feb. 2, 2001
NAIROBI (AP)--Unless urgent efforts are made to curb air pollution now, global warming will cost the world over $300 billion annually in 50 years according to one of world’s largest insurance companies, the U.N. Environment Program said Friday.
Citing a report in a forthcoming UNEP publication, the agency said emissions of carbon dioxide and other gases related to the so-called greenhouse effect could annually cost the world around $304.2 billion.
The report was compiled by Munich Re (G.MUV), a leading reinsurance company, which has been monitoring the cost of natural disasters since the 1960s.
According to the report, losses will be due to more frequent tropical cyclones, loss of land as a result rising sea levels and damage to fish stocks, agriculture and water supplies.
"Studies have indicated, disturbingly, that climate changes could trigger worldwide losses totaling many hundreds of billion of dollars per year," Gerhard Berz, head of Munich Re's Geoscience Research group was quoted as saying.
"Most countries can expect their loses to range from a few tenths of a percent to a few percent of their gross domestic product each year. And certain countries, especially small island states, could face losses far exceeding 10%."
Berz said the costing was based on losses and gains for the world's major industrialized nations.
He conceded that the calculations need refining "but when that point is reached, they might convince even those governments and businesses still hostile to international action to combat global warming."
The report's findings were released ahead of next week's 21st session of UNEP's governing council in Nairobi which some 100 environment ministers are expected to attend.
"The time to act is now. We must all work to reduce the effect of greenhouse gases. But mitigation is not enough. The world has already signed up to a certain level of human-induced climate change, as a result of over a century of industrial emissions primary from the developed world," Klaus Toepfer, UNEP's Executive Director said. "We must help vulnerable areas of the world,
primarily in the developing countries, to adapt to the consequences. We have a moral responsibility to our fellow men and women to protect them and their families from food shortages to devastating floods."
Toepfer said it is crucial for countries to restart the climate change talks that stalled in The Hague at the end of last year.
The Munich Re report said in some low-lying states like the Maldives, the Marshall Islands and Federated States of Micronesia, the losses linked to climate change could, by 2050, exceed 10% of their national wealth.
The report predicts that eco-sysytem losses, including mangrove swamps, coral reefs and coastal lagoons, could run at over $70 billion by 2050.
Europe's biggest climate-related losses will be in higher levels of mortality and health costs, which are estimated to reach $21.9 billion by 2050.
In the U.S., the additional cost of health-related measures and more intensive water management may reach nearly $30 billion by 2050.
UNEP scientists are developing an early warning system to try to reduce the misery and loss of life as a result of climate-related natural disasters.