The Heat Is Online

Munich Re Foresees $70 Billion in Climate Losses in 2002

Rising Emissions Push Skyrocketing Climate Costs

NEW DELHI, India, (ENS) October 30, 2002 - The final bill for this year's natural disasters could be over US$70 billion, according to financial experts at Munich Re, one of the world's largest re-insurance firms.

Their analysis, released Tuesday at the international climate negotiations in New Delhi, found that natural catastrophes, most of which have been weather related, have cost countries and communities an estimated $56 billion during the period January to September 2002.

Insured losses are running at an estimated $9 billion over the same period.

A large proportion of these losses are due to the August floods in Europe, the worst in 150 years. Torrential rains flooded buildings, swept away cars, damaged railway, power and communications lines and killed more than 100 people. Insured losses are to date estimated at between $2 and $5 billion.

The re-insurance company, a member of the United Nations Environment Programme's (UNEP) Finance Initiative, has since the 1960s been compiling annual records on natural catastrophes and their costs.

Thomas Loster, a member of the Munich Re team, said, "There have been over 500 major natural disasters already this year, killing thousands of people, making hundreds of thousands homeless and affecting millions. Many of the atmospheric events we have recorded were extreme."

"We have, once more, strong indications that global warming is increasing and will thus have serious affects on societies and economies alike," Loster said.

"Rain intensities reached unique values, marking all time records in the statistics of the meteorologists and climate scientists," he said.

The Munich Re report was presented to delegates at the 8th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC). More than 3,000 people from 169 countries are meeting to determine future climate policies, particularly the entry into force of the Kyoto Protocol, which limits the greenhouse gas emissions of industrialized countries.

The Munich Re report, part of its Topics series, says there have been an estimated 526 significant natural disasters in the first nine months of 2002 with the highest in Asia, 195; followed by the Americas, 149; Europe, 99; Australasia, 45 and Africa, 38.

Over 9,400 people have been killed as a result, with the vast majority, over 8,000, in Asia.

Economic losses are estimated at $56.4 billion with Europe suffering the most. Europe's economic losses for the first nine months of the year from natural disasters are so far estimated to be almost $33 billion followed by Asia, $14.8 billion and North America, $7.7 billion.

This latest report fulfills the warning issued in February 2001 by Dr. Gerhard Berz, head of Munich Re's Geoscience Research group. "There is reason to fear that climatic change will lead to natural catastrophes of hitherto unknown force and frequency," he said.

Damaging weather events have been felt around the world this year. In late August and early September, Typhoon Rusa hit South Korea. The storm downed 24,000 power lines, destroyed 645 ships, resulted in the deaths of 300,000 livestock and cost $ 6.6 billion, the report says.

The Munich Re report underscores the high level of rain related natural catastrophes.

One third of the 526 natural catastrophes in 2002 were floods. The report estimates that 42 percent of fatalities, 66 percent of the economic losses and 64 percent of insured losses were due to floods.

In total, there were more windstorm related natural disasters. But floods killed more people and cost far more than windstorms, earthquakes or other natural catastrophes.

Windstorms, including hurricanes and tornadoes, accounted for 13 percent of fatalities; 23 percent of economic losses and 34 percent of insured losses, said the Munich Re team.

Global warming, linked to the emission of six heat trapping greenhouse gases, is blamed for many of these extreme weather events. The six gases are governed by the Kyoto Protocol to the UNFCCC which has not yet entered into force.

Thousands of scientists on the Intergovernmental Panel on Climate Change (IPCC), jointly sponsored by UNEP and the World Meteorological Organization, have forecast that average temperatures across the world could climb by between 1.4 and 5.8 degrees Celsius (2.5 and 10.5 degrees Fahrenheit) over the coming century.

Godwin Obasi, head of the World Meteorological Organization, today urged the ministers who attended the high-level portion of the conference to act quickly to control greenhouse gases.

Obasi said the atmospheric concentration of greenhouse gases has increased more than 30 percent since 1995. The extreme weather events that occurred this year "characterize a warmer Earth," he said.

Obasi termed "compelling" the IPCC statement that "there is a new and stronger evidence that most of the warming over the last 15 years are due to human activities," and urged that the conference give "serious consideration" to this evidence.

Klaus Toepfer, UNEP's executive director, said, "Climate change, linked with human-made emissions, is already under way. The world is facing a rise in extreme, weather, events of the kind witnessed in 2002 that will impact on every facet of life including agriculture, health, water supplies and wildlife. It will be the poorer parts of the world, the poorer people, who will suffer most because they have neither the financial or other resources to cope."

"The industrialized nations must do all they can to reduce their emissions of greenhouse gases, the first step of which is to ratify the Kyoto Protocol so it can come into force," urged Toepfer, a former German environment minister.

Adaptation to the realities of climate change is one of the key themes of the conference, which follows closely after the World Summit on Sustainable Development (WSSD) in South Africa this summer.

Toepfer said that new funds, pledged in the run up to the WSSD, can be harnessed with those agreed under the Kyoto Protocol so as to boost food, water and health security to help the poorer parts of the world adapt. The industrialized countries have a responsibility "to help them cope with the more unstable and more extreme environments likely in the coming decades," he said.

"This is not charity," said Toepfer, "the richer parts of the world have a debt to pay as a result of the gases they have been pumping into the atmosphere since the dawn of the Industrial Revolution. It is high time that debt was re-paid so that developing nations can not only cope but also be helped onto a sustainable, economic, path, that avoids the mistakes made by industrialized nations."