Germany’s Munich Re, one of the world’s largest and leading reinsurers, released on January 7 its review of natural catastrophes in 2014 – measuring the economic impact of natural catastrophes on its reinsurance business bottom line. Attributing the much lower 2014 financial losses vis-à-vis previous years to the “absence of very severe catastrophes and a quiet hurricane season in the North Atlantic” – with also fewer people killed – Munich Re Board member Torsten Jeworrek further detailed in a statement that “this development is not a mere coincidence. In many places, early warning systems functioned better, and the authorities consistently brought people to safety in the face of approaching weather catastrophes.”
According to Munich Re, overall losses from natural disasters for 2014 on its balance sheet amounted to $110 billion, thereof $31 billion insured (read about the five largest natural catastrophes in 2014 ranked by overall and insured losses, as well as number of fatalities here). Nevertheless, he warned against “a false sense of security, because the risk situation overall has not changed.” “There is no reason to expect a similarly moderate course in 2015. It is, however, impossible to predict what will happen in any individual year,” he added.
Overall, 980 loss-related natural catastrophes were registered in 2014 (see map below). According to Munich Re, “more than nine out of ten (92%) of the loss-related natural catastrophes were due to weather events” with “[l]oss-related severe weather caused by thunderstorms, technically known as convective events, (…) demonstrably increasing in various regions like the USA and Central Europe.” Moreover, two things stand out when comparing loss events in 2014 with 2013 (see map below): the visibly increasing occurrence of severe weather events year-on-year and the fact that climatological events appear now to entail significant economic costs for affected regions and/or countries. This alone is likely to induce countries to take adequate measures in order to mitigate climate change-related impacts.
Source: Munich RE
Source: Munich RE
All the above only highlights what Adil Najam, Dean of the Frederick S. Pardee School of Global Studies at Boston University, stated in the World Economic Forum’s Outlook on the Global Agenda 2015 report in November 2014: “Extreme weather events are a major consequence of climate change [- i.e. what Mr. Jeworrek of Munich RE above referred to as the “risk situation overall has not changed“ -], and are becoming more frequent, powerful and erratic.” Most importantly, Dean Najam makes the following fundamental point by attempting to recalibrate the focus of the climate change debate on something more tangible than just carbon dioxide emissions, which are notably not all man-made:
“Severe weather events are changing perceptions about climate change. However, when we think of climate change we think less about its already evident impacts and instead more about emissions, particularly around energy production and carbon. Unfortunately, this means most climate change discussion gets reduced to a discussion about carbon management. Carbon management is undoubtedly the essential challenge in mitigation, but in a world defined by climate impacts and adaptation – and that’s the world we currently live in – it’s not enough to focus on carbon management alone.”
In order to dismiss any doubts – like the above being a yearly anomaly – about the increasing occurrence of severe weather events, check out the trajectory on the chart below.
Number of Occurrences of Natural Disasters (1980-2013)
Source: World Economic Forum
Lastly, an unintended – by some definitely intended and thus foreseen – consequence of the increasing occurrence of severe weather over Europe showed up in the latest December data on German wind power generation. Germany generated 8.9 terawatt-hours (TWh) using more wind power – with wind turbines mostly located in the North and, in particular, offshore in the North Sea – than in any other month before, according to the German IWR Institute (International Wirtschaftsforum Regenerative Energien). In this respect, Germany’s Der Spiegel Online draws a nice comparison, noting that all remaining German nuclear power plants together generated on average 8 TWh per month in 2013.
