Sink or swim

Torsten Jeworrek, Munich Re Board member responsible for global reinsurance business, drew attention to the marked increase in major weather-related natural catastrophes worldwide since 1950, the number now having more or less tripled. Economic losses from weather-related natural catastrophes in the period since 1980 totalled approximately US$ 1,600bn (in original values).

Overseas countries have already experienced a costs shift from private insurance companies to governments (aka us, the taxpayers) and also back to individuals because insurance companies need to cherry-pick their clients to avoid climate change risks.

Closer to home Reportage Enviro, a branch of the Australian Centre for Independent Journalism magazine, reported that sea level rise could cost Australians $150 billion in uninsured real estate. (It also makes an interesting reference to insurance in terms of lending requirements.)

It’s easy to see that that estimate is realistic: the storms that hit on the 2007 Queen’s Birthday weekend alone cost the industry $1.48 billion. Why wouldn’t private insurers be pulling out of bad risks as their exposure progressively increases?

You’d think a sensible government would see the need - in everybody’s interests - to work closely with insurance companies to allocate and manage risks, and to take logical steps like the Federal Government taking over coastal climate change planning. Have we seen any action like that yet?

The Inquiry into climate change and environmental impacts on coastal communities called for the Productivity Commission to investigate gaps in insurance coverage for owners of coastal property. It’s not clear from the Productivity Commission’s website whether or not the government has actually commissioned a report.

To give it what little credit it deserves, the government at least has allocated funding for several climate change adaptation projects and assessments. It also set up a Coasts and Climate Change Council, though its term is limited to the end of this year. On the back of unmitigated emissions it remains to be seen how successful preventative measures will be, if they actually are instituted.

All of this points to climate change and its consequences being one of these issues beyond the reach of politics. Australia’s political history on the issue in the three years since 2007 begins with promises, passes sequentially through inquiries, reports, “debate” (as a polite euphemism for the squealing of the self-interested), stand-offs on party lines, parliamentary obstruction, and international spruiking not matched by domestic assuredness; ultimately, it ends with abandonment in 2010.

So if you’re interested in watching our governments tackle serious economic, environmental and moral challenges, then I’d suggest you strap on your pasha bulker: the rising sea levels are likely to dampen your seat in the grandstand.