Industry Issues | ERM & Emerging Risks

U.S. Climate Report Forecasts Dire Changes by 2050

Climate Change - News

Federal scientists warned in a U.S. climate science report that changes in the climate will disrupt the economies of every region in the country in the coming years, with costs threatening to reach hundreds of billions of dollars annually by the middle of this century.

The report is expected to energize a new class of progressive Democrats set to take control of the House in January, many of whom are already pushing for an expansive "Green New Deal" as one of their campaign rallying cries in 2020.

The report warns that the planet is due to undergo devastating changes in the coming years that will permanently alter the coastlines, worsen droughts and storms and foster the outbreaks of dangerous diseases as temperatures climb. And while the report said quick action to reduce greenhouse gas pollution could dramatically affect the state of the planet by the end of the century, many of the impacts the U.S. will see in the next two decades appear irreversible.

"The impacts of climate change are already being felt in communities across the country. More frequent and intense extreme weather and climate-related events, as well as changes in average climate conditions, are expected to continue to damage infrastructure, ecosystems, and social systems that provide essential benefits to communities. Future climate change is expected to further disrupt many areas of life, exacerbating existing challenges to prosperity posed by aging and deteriorating infrastructure, stressed ecosystems, and economic inequality," said the Fourth National Climate Assessment Vol. II.

"Communities, governments, and businesses are working to reduce risks from and costs associated with climate change by taking action to lower greenhouse gas emissions and implement adaptation strategies. While mitigation and adaptation efforts have expanded substantially in the last four years, they do not yet approach the scale considered necessary to avoid substantial damages to the economy, environment, and human health over the coming decades," the report adds. 

The climate science report, which Congress requires to be issued every four years (Global Change Research Act of 1990), was released by the U.S. Global Change Research Program. It is the product of 300 scientific experts under the guidance of a 60-member federal advisory committee, and it was open to review by the public, 13 federal agencies and a panel at the National Academy of Sciences.

It is the first climate report that is wholly a product of the Trump administration. A previous volume, the Climate Science Special Report published a year ago, was started under the Obama administration but published under Trump. That report determined the 1.8 degree Fahrenheit increase in global temperatures since 1901 had lifted temperatures to their highest level in the history of modern civilization, and that it was extremely likely human activities, especially emissions of greenhouse gases, were the dominant cause of the warming since the mid-20th century.

The 2018 federal report provides a regional outlook for the country.

  • Groundwater depletion is exacerbating drought risk in many parts of the United States, particularly in the Southwest and Southern Great Plains.
  • Climate change is  projected to alter the geographic range and distribution of disease carrying insects and pests, exposing more people to ticks that carry Lyme disease and mosquitoes that transmit viruses such as Zika, West Nile, and dengue, with varying impacts across regions in the Southeast. 
  •  While some regions of the Northern Great Plains may see conditions conducive to expanded or alternative crop productivity over the next few decades, overall, yields from major U.S. crops are expected to decline as a consequence of increases in temperatures and possibly changes in water availability, soil erosion, and disease and pest outbreaks, particularly in the Midwest.
  • Flooding from heavy rainfall, storm surge, and rising high tides is expected to compound existing issues with aging infrastructure in the Northeast.
  • Lasting damage to coastal property and infrastructure driven by sea level rise and storm surge is expected to lead to financial losses for individuals, businesses, and communities, with the Atlantic and Gulf Coasts facing above-average risks.
  • Declines in snow and ice cover caused by warmer winter temperatures are expected to negatively impact the winter recreation industry in the Northwest, Northern Great Plains, and the Northeast.


UN Environment's Finance Initiative (UNEP FI) - Insurers Join Forces to Develop New Risk-Assessment Tools for Climate Change 

S&P Global - California's Deadliest Wildfire Highlights Emerging Risk

Investors, insurers urge G20 leaders to phase out fossil fuel subsidies by 2020 (attachment)

Arabella Advisors - The Global Fossil Fuel Divestment and Clean Energy Investment Movement

Bloomberg - Cities Threatened by Climate Risk Still Getting AAA Bond Ratings - Yet no downgrades after enduring heavy catastrophes

European Insurance and Occupational Pensions Authority - EIOPA publishes for consultation draft technical advice on possible amendments to Solvency II and the Insurance Distribution Directive concerning the integration of sustainability risks and factors.

California Department of Insurance - 2018 Climate Risk Carbon Initiative Coal Divestment Follow-Up Survey of insurer investments.