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Interview with Munich Re geoscientist: “Climate change is becoming a social issue”


Interview with Munich Re geoscientist: “Climate change is becoming a social issue” Created: 12/31/2022 8:41 am By: Sebastian Hölzle Flooding in Florida following the passage of Hurricane Ian in September. © Mary Martin/dpa In an interview, the chief climatologist at Munich Reinsurance, Ernst Rauch, talks about the challenges of climate change and a world that is two degrees warmer. Munich - E

Interview with Munich Re geoscientist: “Climate change is becoming a social issue”

Created: 12/31/2022 8:41 am

By: Sebastian Hölzle

Flooding in Florida following the passage of Hurricane Ian in September.

© Mary Martin/dpa

In an interview, the chief climatologist at Munich Reinsurance, Ernst Rauch, talks about the challenges of climate change and a world that is two degrees warmer.

Munich - Ernst Rauch has been attending UN climate conferences for years as chief climatologist at the Munich reinsurer Munich Re, most recently he was in Sharm el Sheikh, Egypt.

We spoke to the geophysicist about his impressions and the growing risks as a result of climate change.

Interview with geophysicist Rauch: Risks from natural disasters are increasing

Why does Munich Re regularly send its chief climatologist to international climate conferences?

There are three reasons for this: On the one hand, we take risks on our balance sheet that arise, for example, from the consequences of floods, storms or droughts.

If the frequency and intensities of weather events change as a result of climate change, we need to understand that.

And the second reason?

As part of our business model, we need to understand the direction in which politics is developing.

For example, when it comes to the political goals of avoiding greenhouse gas emissions.

The climate conferences in Kyoto in 1997 and in Paris in 2015 were decisive for this. As is well known, it was agreed in Paris that the global average temperature should rise to a maximum of two degrees by 2050 compared to the pre-industrial age, or even better only to 1.5 degrees.

Do you attend the conferences primarily as an observer?

Looking at the first two reasons, yes.

But as the world's largest reinsurer, we are also an active participant in the discussion.

This is the third reason why we attend climate conferences.

For example, Munich Re is a member of several organizations that aim to develop financial solutions for developing and emerging countries in order to close the insurance gap there.

"If we continue like this": Chief climatologist expects warming by two degrees

What is different in these countries?

Typically, developing and emerging countries suffer the most from the consequences of climate change, but unfortunately they are the least able to adapt.

Munich Re helps to cushion the climate risks for these countries through insurance solutions within the framework of public-private partnerships.

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Fancy a voyage of discovery?

My space

As a reinsurer, you can typically only assume a risk if someone has previously paid a premium.

where does the money come from

I'll give you an example of how this can work: Years ago, the Caribbean countries, which are at high risk from hurricanes, set up a pool.

These states themselves pay money into this pool to protect themselves against the risks of climate change.

Additional funds come from international funding sources.

In the event of damage, the money from this pool is paid out to the governments.

The pool is public-private managed, Munich Re bears part of the claims payments.

There are similar models in parts of Africa, where the focus is on safeguarding against droughts.

In order to be able to calculate the risk, you need an idea of ​​how the climate is developing.

What temperature rise do you expect by mid-century?

We observe that greenhouse gas emissions have continued to increase in 2022.

If we extrapolate the present, by 2050 we will be about two degrees plus compared to the pre-industrial age.

This means that if we continue as before, our generation will still experience the two degrees.

Interview with climate expert: "Two-degree world is something that mankind has never experienced"

What weather extremes do you anticipate in a two-degree scenario?

A two degree world is something humanity has never experienced.

So we would have a situation that we don't even know what it looks like.

How will the biosphere change?

How is the water cycle changing?

What does the melting of the inland ice masses in Antarctica and Greenland mean?

How is the Gulf Stream changing?

Science assumes that at two degrees, the probability of tipping points in our biosphere increases significantly.

These are irreversible changes in our ecosystems that have the potential to have serious long-term consequences for humanity.

Can you be more specific?

For example, a slowdown in the speed of the Gulf Stream - caused by saltwater dilution from melting Greenland glaciers - would have a significant impact on the climate, at least in large parts of Europe.

The problem is that we just don't know what a two-degree world would be like.

Some expect apocalyptic developments at two degrees - I don't see that again, you have to say that very clearly.

It is possible that we as humanity will succeed in adapting to the new climatic conditions sufficiently well and quickly.

But these are not forecasts.

These are conceivable scenarios.

They are based on scientific knowledge.

That's why I still think it's important that we stay below two degrees - we simply don't have the experience for a two degree warmer world.

Do you understand that in the face of this uncertainty, activists are glued to intersections and blocking runways at airports?

I understand perfectly that the young generation in particular with its various groups has placed the issue of climate change in the foreground in recent years.

This generation is dealing with the uncertainties that exist, and climate change is one of the biggest long-term risks we face right now.

Since we don't know today what the risks are, it is absolutely right when young people say: We don't want to live with these uncertainties, please do something so that in a few decades we don't end up in a situation that we don't know about, if it turns out well for us.

As far as the specific form of protest is concerned, however, one can have different opinions.

The end does not justify the means and does not justify breaking the law.

Incidentally, I am convinced

Munich Re chief climatologist: floods like in the Ahr valley new normal

Is a two-degree world still insurable?

The question is not whether this world is insurable - but at what cost it is insurable.

If risks change, for example floods become more frequent and severe, then the risk increases – and with it the costs.

In Germany we saw that after the flood in the Ahr Valley, after which insurance companies increased premiums.

So, viewed objectively, climate change is not a problem for the insurance industry because it can simply keep increasing premiums?

How can this dilemma be solved?

We are already observing in the USA, for example, that the state is subsidizing insurance premiums because of the strong hurricanes.

In other words: In industrialized countries, climate change is increasingly becoming a social issue that can only be solved politically.

We are also observing this in the Ahr valley: Here things are being rebuilt - with state aid.

Are floods like in the Ahr Valley the new normal?


If you turn a blind eye to this, you have a risk management gap, to put it mildly.

In the Ahr Valley, the insured loss was four times as high as the second largest insured loss from a natural catastrophe in Germany, that was the floods of 2013.

What makes you so sure that the flood in the Ahr valley was not a statistical outlier?

Because we observe such jumps worldwide, we see that in our own databases.

Take the California wildfires, for example. Insured losses used to range from $1 billion to $3 billion each year.

In the forest fires of 2017, the insured loss suddenly jumped up by more than a factor of five.

We were around the same level in 2018 as well.

Munich Re expert on climate change: "We all have to adapt to this new reality"

Does this also apply to the hurricanes in the USA?

It's similar there.

With the hurricanes, we already had such a new dimension in 2005 with Katrina, which was 60 billion insured losses at the time.

This year we're likely to end up with a similar level of damage from Hurricane Ian.

The proportion of particularly strong hurricanes in the total number of hurricanes is tending to increase.

And most of all, they got wetter.

This leads to more secondary damage from flooding.

Incidentally, as far as the damage premium is concerned, the floods in Australia have also reached a new high this year.

What does that mean for the near future?

In the coming years we will see events for which we no longer have any historical comparisons.

What you would not like to imagine becomes reality.

We must be prepared - and we must all adapt to this new reality.

Interview: Sebastian Hölzle

Source: merkur

All news articles on 2022-12-31

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