Climate change futures: health, ecological and economic dimensions

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CONCLUSIONSAND RECOMMENDATIONSJust as we underestimated the rate at which climatewould change, the biological responses to thatchange and the costs we would incur, we may haveunderestimated the manifold benefits we can derivefrom a clean energy transition.The financial sector — having a long time-horizon anda diversified international portfolio — is the centralnervous system of the global economy, sensing disturbanceswhen they begin to percolate in many parts ofthe globe. Energy lies at the heart of all our activitiesand all of nature’s processes. With the energy infrastructurein trouble, insurers may soon be asking if thefuture is insurable.FOSTERING AWARENESS OF CARBON RISKS,EXPOSURES AND OPPORTUNITIESUnderstanding the risks and opportunities posed by climatechange and sensitizing others is the first steptowards taking corrective measures. A broad educationalprogram is needed to better inform businesses,regulators, governments, international bodies and thepublic as to the science and impacts of climatechange. The health of large regional and globalecosystems that support us is at stake.Regulators and governments need to understand thescience in order to frame regulations in climate-friendlyways. Special attention should be given to identifyingmisaligned incentives and market signals that perpetuateenvironmentally destructive practices.Of the three emerging exposures for the insurance andinvestment sectors — climate instability, terrorism andtectonic shifts — the first two may be directly or indirectlytied to our dependence on oil. Exiting from the ageof oil is the first and necessary step toward improvingthe environment and our security and achieving sustainabledevelopment (Epstein and Selber 2002).Together, finance, UN agencies, scientists and civilsociety can seize the opportunities. The combination ofa) focused lending and investment, b) targeted insurancecoverage, and c) sufficient economic incentivesfrom governments and international financial institutionscan jump-start “infant” industries and sustain an economicallyproductive, clean energy transition.POLICIES AND MEASURESThe global nature of the problems associated with arapidly changing climate often seems overwhelming.Multiple measures at various levels are required, butthe political will to undertake them is often difficult toinitiate, much less sustain. Coordinating actions by variousstakeholders can be particularly daunting.Yet change is necessary, and involvement of all sectorsof society is needed. With careful steering and anexpansive dialogue, societies can reduce risks andbenefit from the opportunities. With this in mind, theeditors and authors of this report have divided proposalsinto two categories — fostering awareness andtaking action.Firms can better understand their own exposures to thephysical and emerging business risks — including litigation,legislation, shifts in consumer choices andactivism within civil society. In the energy transitionahead, companies can identify ways to profitablyaddress the challenges.For insurers, climate change challenges all aspects oftheir core business, including property and casualty,life and health, and financial services. Insurers canamass more pertinent information on climate risks asthe past becomes a less informative predictor of thefuture and share this knowledge with other stakeholdersthrough interactive dialogues.Investors and financial analysts can evaluate portfoliosfor climate risks and opportunities, and capital marketprofessionals can add climate screens to their study ofbalance sheets and market possibilities. Capital marketssometimes miss the “signals” coming from climate,paying attention only to large, obvious events such ashurricanes and typhoons.And citizens can learn about their own carbon footprint— the amount of carbon their own activitiesrelease into the environment — driven by their consumptionpatterns and political choices. Civil societyhas a central role to play in building awareness in allsectors and helping businesses, governments and internationalfinancial institutions formulate measures for fundamentalchange to achieve clean and sustainabledevelopment.107 | FINANCIAL IMPLICATIONS
Finally, new technologies need to be clean and safe.Those intended to adapt to climate change and disease,such as genetically modified organisms, need tobe fully evaluated as to their implications for naturalsystems. Those aimed at climate mitigation, includingcarbon sequestration, coal gasification and expandeduse of nuclear power, must undergo thorough scrutinyregarding their repercussions for health, ecology andeconomies. Life cycle analysis of proposed solutionscan form the basis of those assessments.Corporate executive managements can declare theircommitment to principles of sustainability, such asthose of Ceres and the Carbon Disclosure Project, anddevelop codes, such as those enunciated by theEquator Principles, to guide financial institutions inassessing climate-related risks and specifying environmentaland social risks in project financing. Firms canmake their own facilities energy-efficient and encouragecarbon-reducing measures, such as telecommutingand the use of virtual business tools.108 | FINANCIAL IMPLICATIONSACTION: SEIZING OPPORTUNITIES AND CUTTINGCARBON EMISSIONSThe next step is reducing the output of greenhousegases, and this will require concerted efforts by allstakeholders. A framework for solutions is the following:• Significant, financial incentives for businessesand consumers.• Elimination of perverse incentives (Myers and Kent1997) that subsidize carbon-based fuels andenvironmentally destructive practices.• A regulatory and institutional framework designed topromote sustainable use of resources and constrainthe generation of wastes.A set of integrated, reinforcing policy measures isneeded. The chief issue is the order of magnitudeof the response. The Kyoto Protocol calls for 6-7%reduction of carbon emissions below 1990 levels by2012, while the IPCC calculates that a 60-70%reduction in emissions is necessary to stabilize atmosphericconcentrations. How large an investment wemake in our common future will be a function of theeducational process and how rapidly the reality of climatechange affects our lives.The scenario process enables us to envision a futurewith widespread impacts and even climate shocks(such as slippage of portions of Greenland).”Imagining the unmanageable” can help us take constructivesteps in the short term, while making contingencyplans for even bolder, more rapid transformationsin the future.Each sector can play a part and develop partnershipsto catalyze progress. Individuals and the institutions inwhich they are active (schools, religious institutions,workplaces, communities and municipalities) can makeconsumption decisions and political choices that influencehow our future unfolds.An enormous challenge — that can spawn many economicactivities — is the task of ecological restoration.Large programs are needed to restore Florida’secosystems and the Gulf coast’s barrier wetlands andislands. Other industries will be needed to constructbuildings and new infrastructure, improve transport systemsand plan cities to meet the requirements of thecoming climate.Governments, in partnerships with international organizationsand businesses, can help transfer new technologiesand manufacturing capability to developingnations. Encouraging consumers to purchase productsthat set aside part of the price to pursue climate friendly(‘footprint neutral’) projects is just one commercialinnovation being developed. The global sharing ofbest practices can help reduce the number and intensityof resource wars that may loom if only temporizingmeasures are adopted.Insurers, along with their clients, can facilitate developmentof low carbon technologies through their policiesand new products and can set the pace for othersstriving to become greenhouse gas neutral. Risk perceptioncan be an obstacle to adopting new technologies,and the insurance industry can influence commercialbehavior by creating products that transfer someof the risk away from investors. It was insurance coverageonly for buildings with sprinkler systems, for example,that enabled the construction of skyscrapers in theearly 20th century. Policies today could help redirectsociety’s future energy diet and speed development ofbeneficial technologies.Investors at all levels, and especially institutionalinvestors such as state and union pension funds, candirect capital toward renewable energy technologies.Project finance and new financial instruments can providestimulus for solar, wind, geothermal, tidal andhybrid technologies and help drive the clean energytransition. Capital markets can foster the development
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Climate Change FuturesHealth, Ecolo
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Table of ContentsIntroductionPart I
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EXECUTIVE SUMMARYClimate is the con
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the past decade, an increasing prop
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THE CASE STUDIES IN BRIEFInfectious
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THE INSURER’S OVERVIEW:A UNIQUE P
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Regulators and governments can empl
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THE PROBLEM:CLIMATE IS CHANGING, FA
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Figure 1.3 GreenlandEXTREMESOne of
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20 | THE CLIMATE CONTEXT TODAYWholl
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Figure 1.5 Global Weather-Related L
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Climate signals in rising costs fro
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CLIMATE CHANGE CANOCCUR ABRUPTLYPer
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28 | THE CLIMATE CONTEXT TODAYCCF-I
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communities, salinizing ground wate
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Health is the final common pathway
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34 | INFECTIOUS AND RESPIRATORY DIS
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Figure 2.4 Malaria and Floods in Mo
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Figure 2.61920-1980CASE STUDIES38 |
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A MALARIA SUCCESSThe New York Times
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A new flavivirus, Usutu, akin to WN
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44 | INFECTIOUS AND RESPIRATORY DIS
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One analysis (Vanderhoof and Vander
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BIODIVERSITYBUFFERS AGAINSTTHE SPRE
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Figure 2.15 RagweedMOLDSLong-term f
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ASTHMA COSTSTODAYexamples, the Afri
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Stott et al. (2004) calculate that
Page 57 and 58: In the summer of 2005, northern Spa
Page 59 and 60: a better understanding of subpopula
Page 61 and 62: 60 | EXTREME WEATHER EVENTSFLOODSFO
Page 63 and 64: MOSQUITO- AND SOIL-BORNE DISEASESEC
Page 65 and 66: Table 2.2 Direct and Indirect Healt
Page 67 and 68: HEALTH AND ECOLOGICALIMPLICATIONSOu
Page 69 and 70: 68 | NATURAL AND MANAGED SYSTEMSCAS
Page 71 and 72: Figure 2.27 Soybean Sudden Death Sy
Page 79 and 80: 78 | NATURAL AND MANAGED SYSTEMSTHE
Page 81 and 82: HARMFUL ALGALBLOOMSFigure 2.32 Red
Page 85 and 86: CASE STUDIES 84 | NATURAL AND MANAG
Page 93 and 94: “Climate change is one of the wor
Page 95 and 96: 94 | FINANCIAL IMPLICATIONS• Incr
Page 97 and 98: Extreme weather events are a partic
Page 99 and 100: 98 | FINANCIAL IMPLICATIONSTable 3.
Page 101 and 102: 100 | FINANCIAL IMPLICATIONSdemand
Page 103 and 104: 102 | FINANCIAL IMPLICATIONSClimate
Page 105 and 106: These include:Solar Photovoltaic Pa
Page 107: • Social and economic factors in
Page 111 and 112: 110 | FINANCIAL IMPLICATIONSBRETTON
Page 113: 112 | APPENDICESAppendix A. Summary
Page 116 and 117: Table B.1 Summer Percentage Frequen
Page 118 and 119: Climate sensitivity for small-scale
Page 120 and 121: diffuse and do not manifest in sing
Page 122 and 123: APPENDIX D.LIST OF PARTICIPANTS ATT
Page 124: Carmenza RobledoGruppe OekologieEMP
Page 127 and 128: 126 | BIBLIOGRAPHYBibliographyAAAAI
Page 129 and 130: 128 | BIBLIOGRAPHYChordas, L. Epide
Page 131 and 132: Ford, S.E. & Tripp, M.R. Diseases a
Page 133 and 134: 132 | BIBLIOGRAPHYKalkstein, L. S.,
Page 135 and 136: 134 | BIBLIOGRAPHYMills, E. The ins
Page 137 and 138: 136 | BIBLIOGRAPHYRose, J. B., Epst
Page 139 and 140: 138 | BIBLIOGRAPHYVandyk, J. K., Ba
Page 142: Infectious and Respiratory Diseases
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