Global Warming
Will Bankrupt The
World By 2065
By Michael McCarthy
Environment Correspondent In The Hague
Global warming will bankrupt the world by 2065, when the cost of the damage caused will exceed the value of all the world's resources, an insurance expert said yesterday.
At current projections, damage to property will then be greater than the world's annual GDP, Andrew Dlugolecki told the international climate conference in the Dutch capital.
Dr Dlugolecki, a Scot who is a director of CGNU, one of the world's six biggest insurance groups, and also an adviser to the United Nations environment programme, made his prediction in a briefing on how the insurance industry would respond to climate change.
"Climate change will have an effect, our studies show us, in new areas and new intensities, and we know in insurance that new intensities can produce accelerating damage at an exponential rate," he said. "A 10 per cent increase in wind speed can increase damage by 150 per cent, so that is why I feel so uncomfortable about people who say, 'Let's wait and see what happens', because once it begins,it will happen at a very, very frightening pace."
Property damage was already rising by 10 per cent a year. "The bad news is that most of that is not yet due to climate change it is produced by the fact that we are living in an unsustainable way even before climate change begins to have an effect." Insurance was not the answer to global warming, but part of the answer, he said. "It has to be integrated with a sustainable society where governments and communities accept responsibility for the way they behave.
"Insurers would try to continue to offer cover, but there would be conditions," he said. "Where there is repeated damage with no evidence that anything is going to be done to stop it, we will not give cover. Where the risk of damage increases but is not certain, we will probably continue cover, but with changes in the coverage. Yes, we will insure property, but only if it is protected by physical measures. In general we wish to continue cover, but only where we are part of the solution."
New sources of capital would have to be developed, he said, because "already we're beginning to run out of money in the insurance industry".
The Kyoto protocol, the climate treaty the conference is trying to finalise, was only a "tactical" solution, he said, and a much more fundamental answer was needed, with the world moving to dependence on renewable energy.
"At the current rate of growth of damage of 10 per cent a year, we will actually exceed the world's GDP growth of 3 per cent a year by the year 2065. That shows you how serious it is. By 2065, the damage curve will cross over the GDP curve."
Bob Watson, chairman of the Intergovernmental Panel on Climate Change, the UN's body of 3,000 scientists who are assessing global warming, said in the same briefing that "potentially tens of millions of people" would be displaced by sea-level rise. If carbon-dioxide levels in the atmosphere doubled over the next 70 years, he said, because of the sea's slow response time, sea-level rise would continue, not for 10, not 100 but for more than 1,000 years. "Who are the most vulnerable?" he said. "No question: poor people in developing countries. But still there is no doubt that Europe will be affected, as will North America. Climate change is already occurring."
A woman delegate from a small group of Pacific islands told the conference how her homeland was already being hit by rising temperatures and seas. Youlsau Bells, from Palau, a chain of 200 islands in Micronesia, said causeways connecting the seven inhabited islands, which had always been dry, were now covered half the time. Three islands holding 7,000 people were now just above sea-level, she said, and might have to be evacuated.
Al Binger from Jamaica, said: "Our survival depends on cuts in greenhouse gases, and currently the trends are all the wrong way. Our needs and fears are being ignored. Our people have no place to go."
* Flood warnings remained in place across England and Wales last night after storms dumped an inch of rain on saturated land and swollen rivers. The Environment Agency said further heavy rain at the weekend could bring water levels back to crisis point as the country became locked in a winter cycle of almost constant flood alert.
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