climate insight revealed
Unexpected predictions from
and insurance industry on the effects of climate change
by Saul Boyle,
Tom Bosschaert, Mark Ratcliff,
Except Integrated Sustainability B.V.
We continue to face
unprecedented droughts, wildfires, and flooding. All the while, our
leaders and media pundits continue to spout contradictions that reinforce
confusion. It isn't easy to know where to turn and predict how our future
will look - either in terms of environmental disasters or how society
will deal with them.
is light - and some reasoned thinking - at the end of the tunnel of
fear and panic. Our militaries and the global insurance industry, the
world's largest and most powerful sectors, have the most to lose from
climate change and are usually left holding the bag after a disaster.
Despite this, they've been ignored in the climate debate and discussion
of what the future may look like beyond 2030. This article reveals how
they see the world, what they predict, and why we should be listening
from sourcing, refining, and using fossil fuels for energy is the most
significant factor in causing climate change. We are already experiencing
disrupted weather patterns and extreme events, but predicting what the
consequences of climate change will be in another few decades is challenging.
- Image: AP Photo
Losing the signal amongst the noise
Our media and social landscape
are awash with scattered opinions, lies, and mistruths - finding unbiased
and trustworthy information is hard enough to come by, let alone recognize.
On the one hand, doomsday
reports declare we only have a few more years till the apocalypse is
upon us. This reporting style is characterized by overly-simplistic
language and focuses on temperature and sea-level rise measurements.
There's an almost endless
emergence of projects, initiatives, and social enterprises that promise
that it's their solutions that will avert this impending collapse. Each
organization spins its own story in a bid to outshine others and convince
the audience that they are our saviors and the sole tellers of truth.
On the other hand, many
politicians and those supporting the status quo seek to downplay concerns
to prevent alarm or emphasize power and control. Science and research
institutes are often accused of exaggerating and manipulating data to
increase their funding. Likewise, journalists also continue to face
difficulties in the face of collapsing business models and an overly-opinionized
Trying to forecast how
economics and society will behave is near impossible and the current
void of uncertainty and bias has muddied the waters even further. It's
difficult enough to imagine anything about our present let alone our
The military and insurance
industries have the most at stake and can't afford to play games. They
are more pragmatic and realistic in how they view the world and offer
great insight into how humanity will adapt.
Our militaries and insurance industries are the most pragmatic reliable
predictors, not for climate change per se, but how we will overcome
and cope with the regularity and uncertainty of extreme weather events.
- Image: Vallarie Enriquez/NASA
What militaries and
the insurance sector predict
It's not always easy to
find, but accurate and neutral modeling to predict the most probable
socio-economic and political impacts are in the public domain and available
for all to see.
Firstly, the world's militaries,
particularly the largest, have a host of reports available analyzing
and projecting future outcomes. Many are risk assessments focused on
current geopolitical weaknesses and crisis points that climate change
will only expose and exaggerate. Militaries must plan for this and disregard
any grandstanding that too many others in the debate prioritize.
Secondly, predictions and
assessments of the global insurance industry are built from the need
for managing liabilities and preventing losses. In either case, overvaluing
or undervaluing their expenses after the fact will destroy their business
model and their sustainability.
Even though they approach
from different perspectives, these two groups inherently serve pragmatic
needs. Neither engages in the social and political debate on if man-made
climate change is real or not, and neither is seeking to gain support,
validation, or votes from anyone.
Most importantly, neither
group joins in the chorus of souls offering overly-optimistic suggestions
about preventing climate change. Both industries work on the assumption
that it won't be stopped and accept its inevitability, the reality we
will face, and the real risks that will manifest.
These industries talk more
about the impact on economics, the domestic and border security of nations,
and the expectations for how insurance works and the increased financial
Over the past several years, as climate-related disasters have increased
in occurrence and severity, the military has more regularly managed
and facilitated vital rescue and clean-up missions. - Image: AP Photo/Sang
The future state of our
Sober predictions from
the military and insurance world came about after seeing how society
reacted to changes in climate. The observations go back to the early
1990s, but a similar pattern is predicted to shape our future and gives
insight into what life may be like towards 2050.
Very few insiders or academics
worth their weight in salt would be bold enough to suggest they know
exactly how the world and how our climate will be like so far into the
future. However, there is consensus that we won't be experiencing any
dramatic shifts - our world will not suddenly flip upside down. Significant
changes may happen but only in a series of small and incremental steps
- much like the ones we are currently experiencing today.
The U.S. Department of
Defense in 2019 said that "it is relevant to point out that [the]
future... means only 20 years" time and that "projected changes
will likely be more pronounced at the mid-century mark." (1) They
also reveal that nothing unseen will happen - we are currently dealing
with the impacts of climate change as they have already begun to spread
Both the military and insurance
sectors agree that a slow increase in the frequency of extreme weather
events and the compounding effect on others will be the norm. Looking
even closer into our future, as a primary insurance industry report
on climate change bluntly states: "due to slow, gradual change,
the climate state of 2030 will not differ significantly from today."
(2) In other words, with the passing of another decade, the extreme
weather events will be similar to what we are seeing now - yet slightly
increased in volatility and occurrence. The insurance industry is gambling
an inconceivably large amount on this outcome but has determined it
will work in their favor.
While never offering definitive
or Nostradamus-style predictions and pointing to a specific date, the
military and insurance industries can conceptualize and build a relatively
clear understanding and predict what societal changes will happen.
We will all be in it together
- it will not only be the undeveloped and poorer countries that many
wrongly assume. As the impacts from climate change intensify across
all regions, we may become a species based on recovering from previous
disasters while preparing for the next. (3)
As major rivers are decreasing in flow and aquifers become depleted,
it's predicted desertification and the ability to sustain agriculture
will exponentially decrease in our most vulnerable regions. - Image:
Food supply, rising
costs and political insecurity
The impacts of climate
change are vast and currently unseen by many. However, a place where
everyone will be able to witness it is the rising cost in food prices
and supply chains - a long-term and upward trend for some time already.4
Droughts contribute to
this and as they become more common, so does desertification. We see
this already in cases like the Colorado River, where changing weather
patterns have reduced annual flow, threatening the sustainability of
many large cities and farmlands in the driest parts of the U.S. and
A failed harvest has more
profound and persistent side effects than simply a lack of food. It
threatens farms' economic viability and the survival of entire regions.
This outcome will see a rise in claims by both individual and corporate
farms to mitigate losses, and as risks become more significant, growth
in claims and rise in insurance premiums.
The Department of Agriculture
in the U.S. has mitigated the damage from increased claim-related costs
by capping the amount paid by insurance companies. Anything beyond that,
and most insurance companies get funding via brokers and banks.
However, the financing
of these subsidy schemes comes directly from the U.S. Government's tax
revenue, which utilizes brokers as middlemen.6 This band-aid solution
has already cost U.S. taxpayers approximately US$65 billion between
2000-2016 and will continue to add to future costs and economic woes.
wealthier and more developed nations will have a much better chance
to sustain their economies. As environmental stability and the adaptability
of farmers in poorer countries decrease, the need to constantly reassess
their economic sustainability increases - despite the need for local
action, we also need to look at the viability of such financial programs
from a global and political perspective.
There has been a long and sustained increase in food costs, showing
no signs of easing. Increasing food prices and unaffordability of certain
goods has proven to be a key indicator in social dissatisfaction and
likely unrest. - image: Nathan Denette/The Canadian Press
The credibility of
a nation-state, at least in part, lies in its ability to provide reliable
and affordable food to its citizens. Climate change threatens to increase
and compound the effects of any current food shortages, which will inherently
increase prices and threaten a community's autonomy.
When prices for groceries
increase to unacceptable levels, the most natural outcome is for citizens
to become upset and complain. The next step, if possible, would be to
vote in someone new who promises to address the issue. But when democracy
is weak and elections fail to bring the correct change, food insecurity
acts as a psychological and emotional accelerant, often stoking a relatively
minor issue to become much worse.
The Arab Spring in the
early 2010s was a prime example of this. What began in Algeria as a
single protest for democratic reform against a backdrop of food and
water insecurity across the entire Middle East. Shortly after the initial
demonstration, a dozen other nations erupted in protest and riots, the
side-effects we still see in countries like Libya and Syria. (7)
In the same region, the
U.S. military acknowledged that "a severe drought in Syria from
2009 to 2012 negatively impacted the agriculture industry, stoking unrest
that led the nation into its ongoing civil war." (8)
When looking to the future,
the most pressing climate change-related issue in 2050, from national
security and militarized point of view, will be increased geopolitical
volatility, likely exacerbated by food insecurity and other associated
Sea levels have been rising and will continue to cause large-scale flooding
and erosion. Both militaries and insurance providers agree that it won't
be significant singular events. Instead, we will see a series of small
and incremental damages over many years. - Image: Getty/The Hill
Our seas will
continue to rise
The insurance and military
accept that sea level will rise and produce sustained and costly impacts.
The United States Naval College at Annapolis is a well-documented and
poignant example of how this will happen.
The U.S. Department of
Defense conducted a series of studies about projected flooding rates
at the college site. They concluded that the academy "is expecting
the sea level to rise between 0.6 and 3.6 feet by 2050, putting most
of the campus at risk of flooding. The academy will be faced with the
tough decision of either mitigating the risk by investing a significant
amount of money to install pumps and barriers or by abandoning parts
of the campus altogether." (9)
This base is just one of
the 70 within the U.S. that will be similarly affected within the same
time frame. The DoD focused purely upon the impact upon their bases
only. While military bases rarely exist in residential areas, we can
expect a similar effect on other civilian areas.
The starkest aspect to
the DoD's assessment is the socially pragmatic assessment, despite being
written by a body focused on geopolitical risk assessment. They own
a lot of lands, and to quote them: "The DoD's global property holdings
are worth nearly $1.2 trillion. As the frequency of extreme weather
events has increased, the DoD must consider the related risks and make
wise investment decisions to mitigate the impacts of extreme weather
on the DoD's mission." (10)
If the owner of a US$1.2
trillion property portfolio begins talking about abandoning their sea-front
properties, as they are unviable for the next twenty to thirty years,
how can any other landowner not do the same?
Insurance premiums in these
affected places have already begun to increase, more extreme weather
events will follow, and the cycle will repeat. It will become increasingly
difficult and expensive to live in coastal areas. Hence, it will affect
any region's economic and environmental sustainability.
Wealthier nations will
have better chances of constructing more extensive flood defenses. However,
the increase in government spending may lead to complaints from other
regions about why they should fund such protection.
Despite defense systems,
sudden surges from large storms will still have dramatic and devastating
effects on populations in areas that cannot predict or prepare for them.
A prime example of such an event was when Hurricane Katrina hit New
Orleans and the subsequent departure of over 100,000 people leaving
the region with most yet to return. (11)
The need to pay for the
construction and maintenance of protecting such places will only add
to the difficulties of flood-prone regions. The Bank of England's insurance
industry watchdog revealed that Lloyd's of London estimated that "20cm
of sea-level rise since the 1950s increased Superstorm Sandy's (2012)
surge losses by 30% in New York alone." (12)
and insurance industry acknowledge that rising sea levels are inevitable,
along with widespread flooding and erosion. However, both suggest this
won't happen suddenly and will likely be seen as a more gradual increase
in relatively small events. We will recover, despite how inconvenient
As climate change makes life in some regions more complicated, many
will leave, placing added pressures on existing and introducing new
geopolitical and social tensions. The results of many of these mass
migrations will mean that governments will have even less time and resources
to address climate impacts. - Image: REUTERS/Leonhard Foeger
The displacement of people
caused by political stress, either triggered or made worse by climate
change, is a harsh reality of modern times. Nowhere is it more evident
than on the southern U.S. border.
In July 2021, the Centre
for Climate and Security said that the number of refugees from El Salvador,
Guatemala, and Honduras has increased each year consistently since 2012.
A majority of them "come from Central America's Dry Corridor (CADC)...
where extreme climatic events like prolonged droughts, coffee rust outbreak,
and climate-induced disasters have seriously exacerbated social, economic,
environmental and political vulnerabilities." (13)
These crises are expected
to become more widespread as we move forward and more extreme climate-related
events spread to different regions. In addition to international pressures,
individual nations will also see significant population shifts within
their borders, increasing challenges to those militaries, many of whom
will be forced to deploy assets and help where existing infrastructure
be noted that large movements of people are never solely due to climate
change alone. Instead, it is usually combined with political, economic,
and other social pressures, often resulting from extreme weather events
and changes. The subject of refugees is emotive and takes up much political
capital. Hence, it raises the crucial question of how we will respond
to widespread displacement.
Investors and insurance firms are becoming increasingly more aware of
climate change and how it will affect markets and certain industries.
Something seen to be more sustainable to climate change is less risky
and more attractive for those seeking longer-term gains. - Image: Reuters
Trying to work out how
climate change affects us is difficult enough in the current era, let
alone predicting what it will be like in another thirty years. However,
specific indicators can help gain a more profound overview of the insurance
The economic predictions
for the 2030-2050 period are grim. A recent U.S. government report revealed
that "the impacts of climate change beyond our borders are expected
to increasingly affect our trade and economy... [and] cause substantial
net damage to the U.S. economy throughout this century. Annual losses
in some economic sectors are projected to reach hundreds of billions
of dollars... more than the current gross domestic product (GDP) of
many U.S. states." (14)
A British insurance report
mimicked this stark prognosis by stating how the "2011 Thai floods
caused US$45 billion of economic damage, which resulted in US$12 billion
of insurance payments including claims arising from second-order effects
such as supply chain interruption of global manufacturing firms."
The insurance industry
doesn't just ensure physical objects like buildings and stock. It has
been insuring derivatives and other investments for years. It's their
assessment of future risk management in the economic sector and how
they identify the upcoming risk that is perhaps the most crucial insight
into the needs of the future.
Climate change is affecting
the global financial structure, and The Geneva Report revealed in 2019
how our world is shifting from a valuation perspective to a more systemic
and sustainable approach. It showed that "investors are beginning
to account for the effects that transitioning to lower-carbon economies
may have on the long-term earning potential of carbon-intensive sectors."
Also, there is an increasingly common tendency for investors to "consider
the impact of climate change when making investment acquisition and
disposition decisions." (16)
In other words, carbon-intensive
business is becoming a much greater risk, and investors are beginning
to take note. Sustainable and more systemic investing that takes on
the inevitability of economic disruption and seeks more long-term solutions
becomes about more than just ethics and has the potential to become
industries such as automotive, manufacturing, and air travel are beginning
to move away from a purely profit-driven ideology and to a more rational
one that assesses all possible risks involved in doing business as usual.
This change is a significant and positive step.
The past few years have seen many unforeseen disasters, such as the
devastating flooding of the Ahr Valley in Germany, July 2021. It makes
one wonder - are we now living in the dystopian future we had imagined
for the future? - Image: AP/Michael Probst
Our dystopian present
This article summarizes
the work done and forecasts made by risk management and security experts.
At first, one may think it suggests a rather grim and uncomfortable
world, whereby 2050, the impacts of climate change carry our civilization
from crisis to crisis. Political demagoguery, food insecurity, higher
prices, and shortages will be commonplace for all.
It suggests a world of
increasing economic volatility. The only constant will be the environmental
crises and streams of refugees who we'll be too busy dealing with than
to care about climate change.
It sounds dystopian, but
it's worth considering - could it also be an accurate description of
the world as it is now?
There is one crucial example:
let's consider July 2021.
During this one month alone,
our world witnessed record heat blooms over the Pacific Northwest, killing
over 500 people in British Columbia. (17) At the same time, record heatwaves
were experienced in both Scandinavia and New Zealand. (18) (19) The
sad reality is that excessive heat has killed over 5 million people
since 2000 and will continue to do so. (20)
During the same July, we
also saw unprecedented flooding and damage in Europe and China. (21)
(22) It was estimated all worldwide flooding impacted up to two billion
Had we, in
1991, said that in thirty years, events of this scale and disruption
would be witnessed in just one month, people would have dismissed it
as a dystopian and exaggerated view. And yet, this is not the case today.
Both the military and insurance industries seem to be less driven by
mitigating against disaster, and instead focus more on adaptation and
coping with their inevitability and subsequent rebuilding. - Image:
Fairfield City Champion
We have successfully
normalized the encroachment of climate change and extreme weather events
over the last 30 years. While the entire world recognizes the dangers,
we still don't see a coming together of nations in cooperation.
Instead, we see widespread
complacency and an acceptance of these events. In reality, most of these
weather events are localized and don't affect most. Those who live through
disastrous events continue to exist and cope with whatever life brings
What was once unseen and
horrific has become the norm. There's no evidence to suggest that as
we approach 2050, and as these events happen more often, we will respond
The world described in
the reports from our militaries and insurance industries work upon these
simple unspoken axioms. However, the nations where these industries
work will continue doing what they do; although perhaps a little differently.
Our world will gradually experience another new normal where, sadly,
the world's less fortunate will be the most impacted. While relatively
undisturbed, the rest of the world is likely to become accustomed and
perhaps numb to the new realities.
A source for hope
Based on this assessment,
one may easily conclude there is little we can do to avoid the disaster
to come, right?
Nothing could be further
from the truth. Making projections like this, paying close attention
to stakeholders and their future assessments, is invaluable for those
seeking pragmatic and practical solutions.
We can't avoid the effects
of climate change, but we can shape our response. We can prevent errors
and inaction by developing sustainable policy and behavioral changes
now that will help us face the next century's inevitable climate realities.
Until we invent time travel,
these predictions remain the closest to empirical data. Recognizing
this and respecting parameters offers the most practical and effective
way to plan and shape our future.
Integrated Sustainability B.V.