Changes in the global climate will significantly affect the health of humans, resulting in worldwide economic consequences, according to a recent study by the Center for Health and the Global Environment at Harvard Medical School, in conjunction with Swiss Re and the United Nations Development Program. The insurance industry will be at the center of this issue, absorbing risk and helping society and businesses to adapt and reduce new risks, the study contends.

“We found that impacts of climate change are likely to lead to ramifications that overlap in several areas, including our health, our economy, and the natural systems on which we depend,” said Paul Epstein, the study's lead author and associate director of the center. “A comparable event would be the aftermath of flooding, contamination, and homelessness witnessed after Hurricane Katrina hit the U.S. Gulf coast in August. Analysis of the potential ripple effects stemming from an unstable climate shows the need for more sustainable practices to safeguard and ensure a healthy future.”

The study, “Climate Change Futures: Health, Ecological, and Economic Dimensions,” tallies existing and future costs associated with climate change and the growing potential for abrupt, widespread consequences. Two scenarios examine possible impacts of climate change that may impose severe strains on the financial sector, while 10 case studies outline the current effects of climate change with regard to infectious diseases such as malaria, West Nile virus, Lyme disease, and asthma; extreme weather events, such as heat waves and floods; and ecosystems such as forests, agriculture, marine habitat, and water.

Overall costs from catastrophic weather-related events rose from an average of $4 billion per year during the 1950s to $46 billion per year in the 1990s, and almost double that in 2004, the researchers discovered. In 2004, combined weather-related losses were $107 billion, setting a new record. With Hurricanes Katrina and Rita, 2005 had, by September, broken all-time records yet again. At the same time, the insured percentage of catastrophic losses increased from 11 percent in the 1960s to 26 percent in 1990s, reaching 42 percent, or $44.6 billion, in 2004.

Industries and the financial sector must work with governments and United Nations agencies to fund new strategies and technologies for addressing climate change, according to the study. Insurers can influence the behavior of other businesses through revisions in coverage, such as easing the risk of adopting cleaner technologies, by developing their own expertise in low-carbon technologies, and by working with their clients to develop new products, the study's authors believe.

These measures would be sound even in the absence of climate change, as disaster losses will rise due to increased population and exposures alone, the study argues.

Special Reports /

Climate Change Affects Economy, Human Health

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