Category: Global Warming

bookmark_borderClimate Change Disasters Scare Off Insurance Industry

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Australian insurance companies are becoming leery of insuring high risk properties.

Climate change disasters could scare off the Australian home insurance industry

“The idea of parts of Australia being so exposed to natural disasters that they aren’t able to get home insurance seems scary but that’s exactly what insurers are warning of as climate change boosts the frequency of extreme weather events.”

The rise of red zones of risk

Dramatic hikes in insurance premiums combined with tighter lending in response to climate risk could trigger a wider property market correction, according to leading climate risk analyst Karl Mallon.

The warning comes as new analysis from his firm Climate Risk shows the number of “uninsurable” addresses in Australia is projected to double by the turn of the century to nearly 720,000 — or one in 20 — if nothing is done to address escalating risk from extreme weather and climate change.

Thousands more will see their insurance premiums double or even triple within decades, the data reveals.

bookmark_borderFinancial Risks From Climate Change

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A New York Times Report on Federal Reserve Bank of San Francisco

* Home values could fall significantly.

* Banks could stop lending to flood-prone communities.

* Towns could lose the tax money they need to build sea walls and other protections.

* Volatility related to climate change has become “increasingly relevant” as a consideration for the central bank.

The Full Federal Reserve Report
Volume 14 , Issue 1, 2019Community DevelopmentINNOVATION REVIEW

climeate-change-risk-federal-reserve

bookmark_borderClimate Change, Real Estate Mortgages, Flood Insurance and You

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From https://www.reuters.com/article/us-climatechange-mortgages-idUSKBN1WE0D3

“The market’s failure to integrate climate science with investment analysis has created a mispricing phenomenon that is possibly larger than the mortgage credit bubble of the mid-2000s”

“a key culprit for the mispriced risk in the U.S. mortgage market is outdated flood maps drawn by the federal government.”

“Due to budget cuts, more than three-quarters of the maps have not been updated in at least five years”

“Outdated maps mean far fewer people are required to have flood insurance than are at risk,”

“The gaps are evident: About 70% of all damages to homes that were flooded during Harvey were not covered by insurance”

“the gaps mean the risk is not properly priced. The cost for an average policy in low-risk Green Bay, Wisconsin, for example, is three times that in Gulfport, Mississippi, a town devastated by Hurricane Katrina”

“The Federal Emergency Management Agency has said it aims to fix some of these problems with a major risk re-rating on Oct. 1, 2020.”

“Burt’s bet is that the move will result in significant cost increases. That in turn will lead to home price declines and mortgage losses, which would increase volatility in RMBS prices.”

“He expects a correction beginning in the next 6-18 months. ”

“Investors also have been taking on more risk. Some RMBS issued by Freddie Mac and Fannie Mae since 2017, called credit risk transfer (CRT) deals, move the risk of default to the investors. In traditional agency RMBS, Fannie and Freddie cover those losses. “

bookmark_borderThe Ocean and Cryosphere in a Changing Climate

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The latest Intergovernmental Panelon Climate Change (IPCC)Special Report high lights the urgency of prioritizing timely, ambitious and coordinated action to address unprecedented and enduring changes in the ocean and cryosphere.

The report states the sea level is rising much faster than previously forecast. The Intergovernmental Panel on Climate Change (IPCC) warns one billion people will be affected as soon as 2050 because of rising sea levels, water shortages and food insecurity.

SROCC Press Release ENGLISH

SROCC_FinalDraft_FullReport

bookmark_borderOcean Front Property

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Sidd said:

It has been fifteen years i think i said
“The ocean is very large and wants in your basement”

Nyhoo, here’s an article

https://news.sky.com/story/dont-buy-coastal-properties-un-scientists-issue-stark-warning-on-climate-11819030

No part of the planet will be spared a climate crisis as oceans warm and glaciers and ice sheets melt, according to a report by United Nations scientists.

The Intergovernmental Panel on Climate Change (IPCC) warns one billion people will be affected as soon as 2050 because of rising sea levels, water shortages and food insecurity.

The report, compiled by more than 100 leading climate scientists, calls for urgent, ambitious and coordinated action.

The findings are corroborated by scientists in the Arctic, who showed Sky News evidence of “unprecedented” ice melt. One cautioned against buying coastal property.

bookmark_borderFlood Insurance Risk

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From

https://urbanland.uli.org/sustainability/investors-and-bond-rating-analysts-are-working-to-quantify-risks-from-climate-change/

Bonds, insurance, climate risk: “a cataclysmic issue”

“Going forward, cities that lack the resources to invest in climate remediation may see their credit ratings decline as result”

“Those longer-term risks “are not priced into the market today,”

He cited the difficulty of evaluating the flood risk for a regional mall that sits atop a hill. Whereas the mall itself might not be at risk for flooding, “how do people get to you? Your inventory will be fine, but nobody will be there to buy it,” he said. “It’s more of an issue than just your physical building.”

“damage from rare extreme weather events did not have a significant effect on value because buildings almost always could be repaired. But with catastrophic storms and floods becoming more frequent in some areas, the value of the underlying land will be at risk as well. Insurers are not going to protect property owners against the risk that they will not be able to find a future buyer, he said.”

“By the third flood, prospective buyers know you have a waterlogged building,” Glendon said. “And you lose land value.”

“The rising threat to value from climate change will not be borne by insurance companies because they can re-price coverage, Glendon said. “The risk is for the people who hold the mortgages.”

bookmark_borderVolumetric or Cubical Expansion Coefficients of Water?

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I asked:
I’ve been trying to consider the
Volumetric or Cubical Expansion Coefficients of Liquids
and how it relates to water and climate change

It’s hard to wrap my head around… especially when you add melting sea ice to the equation

What do you think?

Will warmer water increase sea level rise even greater… the warmer the water the higher the rise? If the ocean temperature rises from from 62 to 68 will the increase temperature cause the sea level to rise due to expansion?

And, does it matter if ice starts as sea ice or ice on land?
How about the salinity? I’m guessing salinity will decrease as we add fresh water?

I found a tool box app. but I don’t think it takes any of these factors into account:
https://www.engineeringtoolbox.com/volumetric-temperature-expansion-d_315.html

Sidd replied:
ya, warming causes about a third to a half of current sea level rise but the other 2/3 is melting land based ice

the warming of the surface ocean (0-couple hundred meters) is not that important, it is the deep ocean that holds most of the water and it is warming much slower than the surface, but the expansion of the deep ocean causes most of the sea level rise

deep warming is very small compared to surface, a few thousandths to a hundredth of a degree, but there is a lot of deep ocean

90-95% of the warming due to CO2 goes into the oceans. There is better data now on where that heat is going in the ocean from the Argo floats.

theres a buncha papers on it, Cazenave is a good author to look for.

sidd

The Human Induced Climate Change Experiment

bookmark_borderReal Estate Value and Rising Sea Level

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“A very simple way of thinking about it is that it will be tens of thousands of dollars per resident in places that may not have a large tax base”

“Globally, the question of equity is even more acute, with cities in developed nations far better able to fund climate change adaptation projects than in developing countries.”

“Miami Forever Bond”

“The problem with investing in resilience is where is the cash flow ? What we’re doing is protecting against future damage, but there’s not a new positive cash flow. You’re not creating new value. You’re protecting against the loss of existing value. One way or another we’ve got to pay for this …”

https://e360.yale.edu/features/who-will-pay-for-the-huge-costs-of-holding-back-rising-seas

[ Comment: “Miami Forever Bond” ?!! Sell that sucker short.]

https://insideclimatenews.org/news/04082019/climate-change-ratings-agencies-financial-risk-cities-companies

https://www.theguardian.com/us-news/2019/aug/06/california-collapsing-beach-deaths-highlight-climate-fueled-erosion-crisis

http://climatechangepsychology.blogspot.com/2019/04/science-oceans-tallest-waves-are.html

https://www.fastcompany.com/90391923/the-east-coast-is-sinking-under-water-this-photographer-is-documenting-it-as-it-disappears

https://www.thestar.com/opinion/contributors/2019/08/19/washed-out-family-bike-ride-a-climate-change-harbinger-for-all.html

https://www.climatecentral.org/news/ocean-at-the-door-new-homes-in-harms-way-zillow-analysis-21953

That last link has a zillow study that is quite limited in that it looks only at homes built since 2009, but is useful. That first Yale link has a link to another study as well.

sidd