Climate protection or tilting at windmills

Unlike the windmills in Cervantes’ classic, Don Quijote, the threat of climate change is a real giant to contend with. But, in spite of the urgency and significance of the topic, progress is far too slow. The Bonn climate summit – though it was constructive and resolved a number of points of detail – has done little to reverse this trend. Two points are especially worthy of mention, however. For the first time ever, cities and regions from around the world were able to actively participate in the negotiations. Secondly, the summit saw the official launch of the InsuResilience Global Partnership, in which many representatives of G20 and V20 countries, civil society, insurers, scientists and academics are now working together. The aim is to offer insurance protection against climate risks to an additional 400 million people in the world’s poorest countries.

The fact is, the global temperature continues to rise. After the previous three record-breaking years, 2017 also looks set to becomeone of the hottest years on record. According to the Intergovernmental Panel on Climate Change, IPCC, the increase in temperature that has occurred since the second half of the last century in particular is primarily caused by humans, and is having an impact on natural disasters. Following a number of years with low losses, 2017 brought with it a series of devastating hurricanes that reminded us of the incredible damage that natural catastrophes can cause. 

But such individual events cannot be definitively attributed to climate change. The research community expects climate change to result in a greater number of very severe storms, even if the number of actual hurricanes does not increase. As it were, 2017 has given us a taste of what could be in store for us in future.

I do not by any means want to trivialise the progress made at previous climate summits. Indeed, great successes achieved include the 1997 Kyoto Protocol with its Framework Convention on Climate Change; the Copenhagen Accord to limit global warming to two degrees; and the 2010 launch of the Loss and Damage work programme with the Green Climate Fund (GCF) in Cancún, which aims to provide non-industrialised countries with support for climate finance and adaptation to the effects of climate change. Climate insurance can go a long way to helping developing countries in this regard, and the resolution passed at the G7 summit in Elmau in 2015, namely to initiate a project for the insurance of climate risks aims at just that. By 2020, an additional 400 million people in developing countries are to be given basic insurance cover for weather extremes. The InsuResilience partnership launched in Bonn is the logical next step. 

Politicians are now more aware of the acuteness of the problem than ever before, and commitments to reduce emissions have never been so significant. But almost nothing is being done to prevent further climate change. It is true that CO2 emissions have stagnated over the past few years. But they should have fallen. And it is likely that they will actually increase in 2017, including in Germany. Meanwhile, we continue to argue over how much industrialised countries should assist developing countries in dealing with the effects of climate change. And whether China should be considered a developing or industrialised country. In fact, ten years ago, China overtook the USA as the biggest emitter of greenhouse gases. Yet it is heartening to see that renewable energies are being rolled out very quickly in China, leading to reduced use of coal there in recent years.

The top priority for the next few years and decades must be for society and the world to adapt to the now inevitable impact of climate change. Science offers increasingly precise information about the areas in which climate change influences weather extremes. Munich Re, for instance, supports a research project which uses models to investigate the extent to which specific severe weather events have become more probable since pre-industrial times because of climate change. Should this research continue to produce good results, measures to prevent and adapt to the effects of climate change can be tailored further to better protect people and goods.

Our own loss statistics also demonstrate the plausibility of climate change having already an influence on some types of event in a number of regions. By way of example, losses caused by severe thunderstorms in Europe have increased significantly – even if past loss amounts are adjusted to today’s higher values. Given that meteorologists have also observed changes with such weather patterns, it stands to reason that climate change has played a role in the increased losses. Our data also illustrates that prevention works. Protective measures such as flood control for rivers and more stringent building regulations serve to reduce losses

And significant progress has been achieved owing to innovations in financial risk prevention, for example with novel coverage concepts. Thanks to insurance, poor island states in the Caribbean receive millions in pay-outs no later than two weeks after a hurricane. This money can be used for emergency relief efforts and to rebuild infrastructure. Similar insurance pools to the Caribbean’s CCRIF exist in Africa and the Pacific region. Munich Re was already thinking along these lines back in 2005 when it founded the Munich Climate Insurance Initiative (MCII) think tank. The MCII has been hugely successful: at the Bonn Climate Change Conference, the UNFCCC presented it with the Momentum for Change Award for its microinsurance pilot project in the Caribbean. 

I am optimistic about the future: not about progress in climate protection, as clearly too little is being done here, but because I see how people, societies, and companies are developing creative solutions to counter the risks of a changing climate. And also because insurers like Munich Re are willing to assume more risk and, in so doing, offer victims of disasters what they need – including financial help – to get them back on their feet. Of course, this does not allow us to conquer the scourge of climate change – but it certainly helps us to mitigate its impact.