1. The challenges currently posed by climate change pale in significance compared with what might come. The far-sighted among you are anticipating broader global impacts on property, migration and political stability, as well as food and water security.
2. Since the 1980s the number of registered weather-related loss events has tripled; and inflation-adjusted insurance losses from these events have increased from an annual average of around $10billion in the 1980s to around $50billion over the past decade
3. The horizon for monetary policy extends out to two to three years. For financial stability it is a bit longer, but typically only to the outer boundaries of the credit cycle – about a decade. In other words, once climate change becomes a defining issue for financial stability, it may already be too late.
4. Potential increases in the frequency or severity of extreme weather events could mean longer and stronger heat waves; the intensification of droughts; and a greater number of severe storms. Despite winter 2014 being England’s wettest since the time of King George III, forecasts suggest we can expect at least a further 10% increase in rainfall during future winters.
5. The extent to which European windstorms occur in clusters could increase the frequency of catastrophes. Indeed, there are some estimates that currently modelled losses could be undervalued by as much as 50% if recent weather trends were to prove representative of the new normal. In addition, climate change could prompt increased morbidity and mortality from disease or pandemics.
6. The IPCC’s estimate of a carbon budget amounts to between a fifth and a third world’s proven reserves of oil, gas and coal. If that estimate is even approximately correct it would render the vast majority of reserves “stranded” – oil, gas and coal that will be literally unburnable without expensive carbon capture technology.
7. The combination of the weight of scientific evidence and the dynamics of the financial system suggest that, in the fullness of time, climate change will threaten financial resilience and longer-term prosperity.
Give us some hope Mark…
"While there is still time to act, the window of opportunity is finite and shrinking. The December meetings in Paris will work towards plans to curb carbon emissions and encourage the funding of new technologies. We will need the market to work alongside in order to maximise their impact.
With better information as a foundation, we can build a virtuous circle of better understanding of tomorrow’s risks, better pricing for investors, better decisions by policymakers, and a smoother transition to a lower-carbon economy.
By managing what gets measured, we can break the tragedy of the horizon."