Study Says Climate Change Link in Hurricane Losses Decades Away

Tropical cyclones are expected to cause more damage in the United States and Asia but it could be more than a century before insurers can point to climate change as a factor in losses from storms, scientists say.

In a study that focuses on the predicted threat to the United States from Atlantic hurricanes, researchers say their findings also apply to other regions hit by tropical storms, such as Australia, China and India.

“Disaster losses will continue to increase because of increasing exposure in terms of population and insured assets, irrespective of the trajectory of global climate change and its affect on tropical cyclone activity,” John McAneney, director of Sydney-based Risk Frontiers and one of the authors, told Reuters.

This made it hard to detect if climate change was changing the behavior of storms, though climate scientists expect tropical cyclones to become stronger, even if the overall number of storms declines in some regions.

Underscoring the risks, major reinsurer Munich Re says there were 950 natural catastrophes last year, 90 percent of which were weather-related events such as storms and floods.

“This total makes 2010 the year with the second-highest number of natural catastrophes since 1980, markedly exceeding the annual average for the last ten years (785 events per year),” Munich Re said in a statement earlier this month. The overall losses totaled about $130 billion of which about $37 billion was insured.

McAneney and fellow researchers Ryan Crompton of Risk Frontiers and Roger Pielke Jr. of the University of Colorado, studied a range of computer climate simulations that projected future tropical cyclone activity in the North Atlantic.

They then estimated how long it would take for a clear climate change impact on what are called normalized losses from U.S. tropical cyclones. Such losses are adjusted for known changes in population, wealth and inflation.

Their study is published in the latest edition of the journal Environmental Research Letters and is an attempt to assess the climate change risk to insurers.

Climate scientists say a warmer world will trigger greater extremes of droughts, bushfires, floods and storms, placing crops, mining operations and coastal cities at greater risk.

McAneney’s Risk Frontiers is an independent research centre at Sydney’s Macquarie University that studies and models catastrophe risks in the Asia-Pacific and prices these risks for insurance and reinsurance firms.

LOSSES DOUBLING
Based on the current study, McAneney said the time scales for a climate change signal to emerge for Atlantic hurricanes were between 120 years and 550 years depending on the global climate change model used.

He said the economic cost of U.S. hurricane losses had roughly doubled every 10 to 15 years but added such losses could be explained by more people and industry in the path of storms as well as increasing wealth.

“There may well be a climate change signal present but it is simply overwhelmed at present by the magnitude of the change in societal factors and the large year-to-year volatility in the losses. We do not expect this situation to change soon,” he said.

He also pointed to studies that show a large increase in losses in coastal regions of China and parts of India that can be blamed on increasing population and wealth.

“And given the projections of growth in China and elsewhere in the region we would expect this trend of increasing disaster losses to continue,” he said in emailed remarks. Australia, and particularly Queensland State, was also vulnerable.

“We would expect broadly similar results in the sense that disaster losses will continue to be largely driven by increasing exposure along the coast, particularly in Queensland,” he said.

The state’s rising population and expanding coal mining, agricultural and tourism sectors made future storm losses likely. And the state is also only part-way through the November-April cyclone season that forecasters say will be above-average in the number of storms.

“If we truly want to reduce disaster losses, then we should be focusing on better land-planning decisions and improved building codes,” McAneney said.

(Editing by Miral Fahmy)