When it comes to achieving the climate goals set forth in the Paris Agreement, optimism has waned among experts worldwide. What has not changed is the urgency with which the world must act. We need to reduce greenhouse gas emissions, but we also have to more rapidly adapt to our changing climate. After all, weather-related natural disasters are increasing in both frequency and severity – in many regions around the world, including within Europe.
This upward trend continued in 2023 in the form of extreme heat, furnishing further proof that climate change is already making hazardous weather more commonplace. As late as September of this year, there were a number of severe weather events in Europe – with heavy rain, flooding and significant hail damage resulting in aggregate losses that once again meant considerable burdens for insurers. There are also more and more one-off weather-related events generating insured market losses in excess of €1bn.
Two different approaches to dealing with climate change proceed on different time scales, but both are imperative. The first approach consists of prevention and adapting to things that are already inevitable. Greenhouse gases such as carbon dioxide persist in the atmosphere for some 100 years, which means that the next two to three generations of humans will have to endure the consequences of the CO2 concentration already in the atmosphere.
We therefore need to better adapt to the impacts of climate change – including more intense storms, heavier rainfall, worse flooding and more severe droughts. If we fail to adapt, then the losses will only get higher, regardless of whether insurers, companies or private individuals bear the brunt of the costs.
One great thing about prevention is that it works right away; people simply need to be able to accurately assess their situation. How exposed to risks are residences? To what extent are businesses in jeopardy? What is the degree of danger for communities? Just how great is the vulnerability to damage? Information that can help answer these questions is indispensable.
Although the insurance industry in Germany has played a crucial role here, few laypeople are aware of the zoning system for flooding, backwater and heavy rain. This is a pity, as the system ensures greater transparency and supplies a wealth of information on the risks posed by flooding. After all, people first need to understand the local hazards they face before they can take suitable preventive action, such as deploying drainage solutions or watertight basement windows to protect buildings from floods.
The second approach to dealing with climate change is avoiding the emission of greenhouse gases. Although doing so is every bit as important as improving resilience, reducing emissions while striving for net-zero emissions will take considerably more time. The concentration of greenhouse gases in the atmosphere will be similar tomorrow even if we reduce emissions today; but we must shrink emissions all the same.
Yet how can we do that? We need to foster renewable energies, modernise infrastructure and phase out fossil fuels as quickly as possible – while replacing them with green hydrogen and other net-zero sources of energy wherever possible. This needs to happen across the world. This is the only way forward – and winning this battle will take a very long time.
* Contributed by Ernst Rauch, chief meteorologist, Munich Re