Running out of time

Running out of time

The IPCC’s Sixth Assessment Report on climate change confirms many impacts of global warming are locked in. The battle now is to avoid an even worse future

By Andy Swales

The latest report from the United Nations’ cohort of leading climate scientists makes unsurprisingly grim reading for the world. To sum up the Intergovernmental Panel on Climate Change’s (IPCC) most indepth examination to date: the planet is heating at an unprecedented rate, humans are certainly to blame and the best we can do is act immediately on carbon emissions to limit the damage.

The key word there is “limit”, because the impacts are already upon us.

And having watched vast areas of the south-east burn in 2019-20, Australians – barring, it often seems, some in Canberra’s corridors of power – know that only too well.

Roshanka Ranasinghe, a climate change expert at IHE Delft Institute for Water Education and Deltares in the Netherlands, and co-ordinating lead author of the IPCC report’s regional chapter on Australasia, tells Insurance News Australia “is already facing several climate change-related hazards”.

“There is high confidence that, over the next 30 years, several climatic impact drivers assessed in this report will change noticeably all over Australia.”

The report finds greenhouse gas emissions from human activities are responsible for about 1.1 degrees of warming since the industrial revolution, and over the next 20 years we are expected to reach or exceed 1.5 degrees – the limit targeted by world leaders in the Paris climate accord of 2016.

“Stabilising the climate will require strong, rapid and sustained reductions in greenhouse gas emissions, and reaching net zero carbon dioxide emissions. Limiting other greenhouse gases and air pollutants, especially methane, could have benefits both for health and the climate,” IPCC climatologist Panmao Zhai says.

Without such action, we can forget about limiting warming to 1.5 or even 2 degrees.

Emeritus Professor Will Steffen, a climate scientist at the Australian National University who contributed to five previous IPCC assessments and special reports, tells Insurance News he was “somewhat surprised by the direct and forceful nature” of the Sixth Assessment Report.

“It didn’t leave any doubt about what the science is saying, and it didn’t shy away from some difficult issues, like breaching the 1.5-degree goal and providing more evidence for the high-end risks of climate change if we don’t rapidly and deeply reduce our emissions.”

The report’s detailed analysis of impacts in Australasia shows land areas have already warmed by about 1.4 degrees in Australia and 1.1 degrees in New Zealand since 1910. Heat extremes have increased, cold extremes have decreased, and these trends are projected to continue.

“Australia has significant vulnerability to changes in temperature and precipitation projected for the next 50 to 100 years… because it already has extensive arid and semi-arid areas and lies largely in the tropics and subtropics,” the IPCC report says.

Relative sea level has risen at a greater rate than the global average in recent decades, with sandy shorelines retreating in many locations, the report finds. Relative sea level rise is projected to continue in this century and beyond, contributing to increased coastal flooding and shoreline retreat along sandy coasts.

That probably means more scenes like those recently at Wamberal Beach in New South Wales, with beachfront homes teetering on the brink as the ocean eats away at the land on which they were built.

The frequency of extreme fire weather days has increased, the report finds, and since 1950 the bushfire season has become longer at many locations.

The intensity, frequency and duration of fire weather events are projected to increase throughout Australia, meaning the conditions will be ripe for a repeat – or worse – of the Black Summer of 2019-20, which resulted in 30,000 insurance claims worth about $2.4 billion.

Heavy rainfall and river floods are projected to increase, and while the frequency of tropical cyclones is predicted to drop, those that do form are expected to be more severe, which could “have serious implications for storm surge heights, wind damage and flooding”.

“If they were to travel further poleward [as some research has suggested] they would be more likely to impact on coastal regions in the southwest of Western Australia, southern Queensland, and the northern NSW coastal region, as well as northern parts of New Zealand,” the report says.

That could mean more damage to supposedly low- or medium-risk communities that are not built to resist the strongest winds, like when Cyclone Seroja hit Kalbarri in Western Australia this year, causing more than $280 million of insured losses.

Professor Steffen says the report paints a “sobering picture of worsening extreme weather for Australia that is already locked in for the next couple of decades”. Some of the other impacts he flags include hotter and more frequent heatwaves, both on the land and in coastal waters, and further increases in drought in the south-east and the south-west.

“We can’t avoid these worsening conditions over the next couple of decades, so we’ll need to learn how to cope with them.”

The extent to which the natural catastrophe threat grows depends on the level of warming we experience.

For example, an IPCC rain map predicts parts of Australia will experience one-day maximum rainfall rises of up to about 10% under 1.5 degrees of warming. At 4 degrees, swathes of the north and northwest are forecast to endure 30-40% rises. At 1.5 degrees of global warming, annual maximum temperatures for much of Australia would rise by up to about 3 degrees; at 4 degrees global warming, annual maximums in Australia climb by up to 6 degrees.

In a recent analysis for The Conversation, economists Andrew Wait and Kieron Meagher warned 1.5 degrees of warming would double the frequency of droughts from once every 10 years to once every five, while 2 degrees would make them 2.5 times more frequent.

Professor Ranasinghe says that compared to a 1.5-degree world “in a 2-degree world we have high confidence in seeing more pronounced and more widespread increases in climatic impact drivers such as mean temperature, extreme heat, fire weather, relative sea level rise, coastal flooding and coastal erosion, and medium confidence in seeing such changes in several other drivers throughout Australia.”

Professor Steffen says extreme weather events will not necessarily change linearly with the temperature rise. “A doubling of the temperature rise from 1 degree to 2 degrees above the pre-industrial level will lead to more than a doubling of the frequency and intensity of many of these events.”

And he warns of “tipping elements” that could further accelerate the intensity of extreme weather and lock in other worsening conditions for centuries to come.

“Sea level rise and coastal erosion is a good example,” he says. “Sea level rise is already accelerating and if large polar ice sheets such as Greenland and west Antarctica cross tipping points beyond which their melting becomes irreversible, we will ultimately experience many metres of sea level rise.

“The rate could increase to as much as two metres per century, which would be devastating for much of Australia’s coastal infrastructure and threaten the viability of our economy.

“To put it bluntly, letting sea-level rise – and other aspects of climate change – get out of our control would become an existential threat to the viability of contemporary societies, including ours.”

On a sliding scale that ends in societal collapse, where might Australia’s insurance industry find itself?

The IPCC report states that, according to Insurance Council of Australia (ICA) data, “major climatic catastrophe insurance losses from 1970 through 1996 averaged $208 million a year. Of these losses, nearly half were from tropical cyclones; one-quarter were from hail. Other flooding and storm damage accounted for most of the rest; losses from fire were less than 10% of the total.”

In July, ICA Chief Executive Andrew Hall told a parliamentary inquiry that over the past three years, insurers have paid out more than $7.4 billion in natural disaster claims, with more than $5.6 billion paid out since the 2019 bushfires.

After the IPCC report was published in August, Finity Principal Rade Musulin told Insurance News the findings “should not significantly change strategy or pricing in the near term because … clear trends have been observed in extreme weather for some time”.

But even if climate change is “priced in” and efforts to adapt through flood defences, stricter planning regulations and so on are further stepped up, at some point in the medium or long term, something’s got to give.

Australia has already seen entire communities deemed effectively uninsurable, while underinsurance is a recurring problem whenever disaster strikes.

“I see insurers withdrawing from certain areas, or [from] offering covers for certain risks, elsewhere in the world in recent decades, and this will probably become more widespread in the decades ahead, especially if appropriate risk-informed adaptation measures are not put in place in the next two decades … some localities may become unattractive for insurers to provide cover, at least at premia that are affordable to the average Australian,” says Professor Ranasinghe, who is also the IHE Delft Institute’s Chair on Climate Change Impacts and Coastal Risk, partly supported by global insurer Axa’s Research Fund.

He says while adaptation is a “necessary but temporary fix, deep and sustained cuts in greenhouse gas emissions is the long game that we have to win”.

Australia is widely considered a laggard on emissions action and targets. While many other nations have committed to hitting net zero by at least 2050, Prime Minister Scott Morrison has, at the time of writing, refused to join them.

Could it be time, then, for the insurance industry, which has long accepted the reality of climate change, to push government for

action on emissions with as much fervour as it has – with some success – lobbied for investment in measures such as flood defences and cyclone mitigation?

Professor Ranasinghe says it is time for the insurance sector to throw its considerable weight behind emissions reduction.

“As the report shows, we are already locked into changes in some climatic impact drivers for centuries, for example, those connected with sea level rise…so adaptation is a must to limit or avoid damage. But if there are no reductions in greenhouse gas emissions by the big [emissions] contributors, then we could ostensibly reach a place where further adaptation might become unfeasible.”

Professor Steffen agrees the industry should “absolutely” be part of the drive for lower emissions.

“The insurance industry has a very strong interest in limiting the rate and magnitude of climate change to levels that we might be able to cope with, and the only way to do that is to rapidly reduce our greenhouse gas emissions and hit net zero well before 2050, preferably around 2035 to 2040.

“The industry should be right out in front demanding rapid and deep reductions in emissions. Otherwise, you may not have an industry by mid-century.”