The Insurers Bet on Global Warming


February 02, 1993|By GWYNNE DYER

London. -- "The waves now are fantastically high on average,'' said Sheldon Bacon of the Institute of Oceanographic Sciences in England last August. ''And why? Goodness knows. What pings around in the brain is the greenhouse effect.''

Mr. Bacon was discussing the astounding fact that wave heights in the North Atlantic Ocean have risen by fully 25 percent over the past quarter-century, although average wind speeds have remained steady. That doesn't make any sense, and Mr. Bacon suspects that global warming is to blame.

But he can't prove it. The global interactions between sun, atmosphere, land areas and seas are so ferociously complex that nobody can even produce a reliable 30-day forecast of the weather, let alone a 30-year forecast of the climate.

Almost everybody fears that the extra carbon dioxide and other ''greenhouse gases'' released by human industrial and agricultural activities will change the global climate. But you can't even be certain what is happening in the present, given how much global temperature fluctuates from one year to another. Now, however, we have a different way of measuring warming: money.

The trillion-dollar global insurance industry takes a keen interest in weather patterns, because it naturally wants to limit large pay-outs to cover storm damage. The cost of Hurricane Andrew, which struck the U.S. Gulf Coast last year, for example, was around $20 billion.

Hurricane Andrew, by traditional standards, was a ''100-year storm,'' a once-in-a-lifetime event. But so was Hurricane Gilbert in 1988, the strongest-ever Caribbean storm, and Hurricane Hugo in 1989 ($6 billion insured losses).

Then there was Cyclone Ofa in 1991, the biggest tropical storm ever seen in the South Pacific. And Cyclone Val a year later, which devastated both Western Samoa and American Samoa, and Cyclone Iniki last autumn, the strongest to hit Hawaii in over a century.

Last year Munich Re, the world's largest reinsurance company, commissioned a report on windstorm damage. It found its worst suspicions confirmed. Total economic losses from windstorm damage in the '80s were three times greater than in the '60s. Insured losses were five times greater. ''We definitely have a trend which, without exaggeration, may be regarded as dramatic,'' concluded the report's authors.

What does this have to do with global warming? Like the mysteriously bigger waves in the North Atlantic, more and bigger storms give us no direct proof of temperature change. But tropical storms require a tremendous amount of energy, which means that they can only form over warm water.

The sea's surface has to be a minimum of 27 degrees Celsius, in fact. So if there are more and bigger tropical storms around than ever before, then more of the sea's surface must be at least 27 degrees, or the same area stays that temperature longer, or both.

The actual change in sea temperature may be slight, but the results are already quite dramatic. Not only are traditional hurricane regions getting an unprecedented battering, but Western Europe has been hit repeatedly by near-hurricane storms in the past few years.

The Munich Re report predicts that it will just go on getting worse, with full-scale hurricanes visiting Western Europe and the Mediterranean for the first time in recorded history. If the insurance industry does not change the way it assesses storm damage risk, it concludes, ''catastrophe'' payments will rapidly escalate from $20 billion to $100 billion a year.

What the insurance industry cannot tell us, unfortunately, is how much warming, and how fast: it's like a canary in a coal-mine. And the specialists are still confused and divided among themselves.

In 1989, for example, the British Meteorological Office predicted that global warming would amount to 3 degrees Celsius over the next 70 years. But in 1991 the same group of meteorologists revised their forecast downwards by half, predicting that it would be only 1.5 degrees warmer by 2060.

Then early last year Sir John Houghton, former head of the Meteorological Office and now chairman of the United Nations Intergovernmental Panel on Climate Change, released a report saying that things are probably even worse than they seem. Volcanic dust from the Mount Pinatubo eruption and sulphur dioxide from power stations, he suggested, are temporarily cooling the planet and masking the greenhouse effect.

But when the volcanic dust washes out with the rain, and sulphur dioxide emissions are cut by the scrubbers that power stations everywhere are now having to install, we may suddenly discover that the planet got a lot hotter while we weren't looking. ''It will be like a curtain being drawn back to let in the sunlight,'' one scientist said.

How much warmer? How fast? Who knows? But a poll of climate scientists taken a year ago revealed that 13 percent now believe that an unstoppable ''runaway'' greenhouse effect is likely, and another 32 percent think it is possible. We live in interesting times.

Gwynne Dyer syndicates a column on world affairs.

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