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I. The Science
A. Intergovernmental Panel on Climate Risk (IPCC)
Third Assessment Report, 2001

1. Mid 1800s ½ present

global atmosphere warmed 0.6 C (1 F)
CO2 concentrations 280 ppmv to 379 ppmv
2. CO2 levels higher than at any time in the 400,000-
400,000-
year ice core record
3. Current rate of increase in CO2 concentration
unprecedented during at least the past 20,000 years
4. Projected 1990-
1990-2100
Warming range 1.4 C (2.5 F) ½ 5.8 C (10.5 F)
Warming midpoint 3 C (5.4 F)
CO2 concentrations 560 ppmv ½ 840 ppmb
`. Sampling of Scientific Findings

1. Glaciers and ice fields melting all over the world

30 years project no glaciers in Glacier National
Park
Mount Kilimanjaro ice fields may be gone in 15
years
Andean glaciers retreat threatens water supplies
to Peru and `olivia
2. Arctic Climate Impact Assessment, 2004
Arctic warming twice as fast as rest of the world
Some areas warmed 2.2-2.2-4.0ºC (4-
(4-7ºF)
Ice cap has shrunk 20 percent
Ice is 40 percent thinner
Impacts indigenous Inuits, polar bears and
increases sea levels
3. Antarctic (Ô
(Ô
 2004)
2004)
Glaciers are thinning and moving faster into the
sea
Numerous ice shelves have collapsed
4. Smoking Gun (Ô
(Ô
  2005)
Measurement of ocean temperatures
Earth is absorbing more of the sun¶s energy than it
is radiating back to space as heat
NASA¶s James Hansen, Director of Goddard
Institute for Space Studies: ³There can no longer
be genuine doubt that human made gases are the
dominant cause of observed warming. This energy
imbalance is the smoking gun that we have been
working for.´
Corroborating ocean research by the Scripps
Institute, 2005
Tim `arrett
`arrett--Scripps project leader: ³The debate
over whether there is a global warming signal is
over now at least for rational people.´
II. The Risks

A. Specific

`. Cultural and Regional Disparity

C. Ecosystem and Environmental

D. Regulatory
A. Risks ± Specific

1. Property
Munich Re, since 1960s
- frequency of weather disasters has tripled
- insured losses increased 10 fold
- natural disaster damage = $90 billion(2004)
- insured losses = $35 billion(2004)
Catastrophe Losses
- U.S. (Hurricane Andrew, 1992)
- Poland (floods, 1997)
- China (floods, 1998)
- Central Europe (floods, 2002)
- Korea (Typhoon Maemi, 2003)
Research predicts
- more intense rainfall
- stronger storms
- more hurricanes
- sea level rises
2. Liability
Sue countries and industries
U.S. and fossil fuel industries (coal, oil)
Coalition of environmental groups
- Greenpeace - WWF - NRDC
- FOE - Climate Justice
Island States
- Maldives
- Tavalu
- Kiribati
Inuits
- human rights violations
- threatens their existence
3. Health
Heat stress
- France, 2003
- 15,000 deaths
Malaria spreads north/south
Insect borne diseases spread more easily
`. Risks ± Cultural and Regional Disparity

1. Poorer Nations Hit Harder

Hurricane Mitch, 1998 ± Nicaragua, 10,000 deaths
Mozambique, 1997 ± floods, 45 percent decrease in
GDP
Pacific Tsunami, 2004 ± 200,000+ deaths
World `ank
- cost per capita of natural disaster in relation to GDP
- 20 times higher in developing world
Poor nations do not have
- strong building standards
- insurance
- government funding
2. United States
Western drought
Alaska much warmer
- summer + 5 5º
ºF
- winter + 10
10º
ºF
- melting permafrost
- beetle infestation destroying spruce trees
C. Risks ± Ecosystem and Environmental

1. Species Extinction
j
 2004
 global warming as significant as habitat
loss
- 15
15--37 percent of 1,103 species studied
extinct by 2050
2. Great `arrier Reef, Australia
If 2º
2º C + warmer
Loss of most coral by 2050
Collapse by 2100
D. Risks ± Regulatory

1. Kyoto Treaty ± Effective February 16, 2005

Signed Not Signed Exempt
E.U. U.S. China
Japan Australia India
Canada
Russia
Reduce greenhouse gasses (GHG) 5.2% below
1990 levels by 2010
U.S. based companies - uncertainty
U.S. global companies ± operate under two
standards
Ill will towards U.S. as largest contributor to
greenhouse gases
2. California legislation
Reduce greenhouse gases from cars and trucks
Other states to follow
3. If ignored and not prepared, later ratification
could cause large losses for corporations
Carbon Disclosure Project report estimated
that the market value of some heavy carbon
emitters could be slashed by as much as 40
percent
Innovest Strategic Value Advisors report found
similar results with as much as 45 percent of
earnings and 35 percent of market
capitalization being at risk
4. CERES Report ± Mindy Lubber
Power Sector
Financial Risks from Climate Change
III. Risk Management and Insurance
Implications
A. Property

1. Risk managers of coastal properties-

properties-
increasing risks
2. Insurers and re-
re-insurers will
Increase premiums
Increase deductibles
Reduce limits
Lessen concentrations/aggregates
May cancel or not renew
`. Directors and Officers

1. Directors and Officers need to prepare

companies to reduce GHG emissions
2. Consumer boycotts decrease revenues and
damage reputation
3. Shareholders resolutions
4. D&O insurers like Swiss Re are underwriting
companies on their GHG emissions
strategies

C. Liability

1. Little or no liability claims yet

2. Insurers may exclude like they excluded
pollution
D. Life and Health

1. Ô
  2002
Global warming increasing epidemics in
plants, animals, and humans
2. Pathogens and carriers spread further
3. Milder winters less control over germs and
parasites
4. Life and health insurers can expect more
claims
5. Employers health care costs could expand
IV. Mitigation Strategies
A. Voluntary Reductions in GHG Emissions

1. DuPont ½ 65 percent below 1990 levels

2. Alcoa ½ by 2010, 25 percent below 1990 levels
3. Pew Center on Global Climate
38 mostly Fortune 500 companies
Accept global warming science
Reduce GHG emissions
Support Kyoto treaty
4. CERES ½ Mindy Lubber
`. Prudent Development in High Risk Zones

1. National Oceanic and Atmospheric Administration (NOAA)

estimates 153 million (54%) of U.S. population live in
coastal areas.
2. Most populous, high risk and fastest growing states
California
Florida
Texas
2030--25% of population
2030
3. Some countries totally coastal
U.K.
Japan
Korea
4. Reduce subsidies in
National Flood Insurance Program
Federal Disaster Assistance
5. Strengthen and enforce building codes
C. Increase Fuel Efficiency of Automobiles

1. Reduce GHG emissions

2. Reduce oil dependency
V. `usiness Opportunities

A. Jeffrey Immelt, CEO, General Electric

³said he would double G.E.¶s investments in energy

and environmental technologies to prepare it for
what he sees as a huge global market for products
that help other companies ± and countries like China
and India ± reduce emissions of greenhouse gases,´
j 

 May 19, 2005.

`. Prevention

1. U.S. Secretariat for the International Decade of

Natural Disasters
2. $1 spent on prevention, worldwide, for every
$100 spent on rescue efforts
C. CO2 Emissions Trading

1. Component of Kyoto Treaty

2. Chicago Climate Exchange

D. Weather Derivatives and Insurance

1. Financial Products
Ê

 

  magazine
magazine

E. Renewable Energy Market

1. Carbon Disclosure Project Study

2. 2020-
2020-$1.9 Trillion market
VI. Final Thoughts
A. EarthM
EarthMs Atmosphere is getting warmer and
will continue to get warmer ½ 22 of 23
warmest years since 1980

`. `est strategy is to slow warming and

employ mitigation and adaptive strategies

C. `iggest risk is abrupt climate change

1. Hit threshold like throwing a light switch
2. Gulf Stream slows down or stops
D. Some industries hurt, but business
opportunities for development of new
technologies are huge
1. We will develop new ways of doing things,
2. but -The most difficult values to jettison are
those that have helped you in the past, Jared
Diamond, author |  and
and 
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E. `y 2010, the U.S. will have mandatory

CO2 emissions controls
1. Even if Jeb `ush is President and Republicans
control the Senate and the House
2. World pressure
3. Corporate pressure
4. States pressure
5. Cities pressure