Have you noticed the weather getting weirder in recent years? Well, you are not alone.
From more heatwaves, cold, droughts; floods, and more oddities, including thunderstorms in Ontario in late February, the dice has become loaded with climate change helping to fuel more of these extreme weather events.
These events have an impact financially on government coffers globally.
Last summer Yangtze flooding in China created astonishing losses worth $28 billion USD, with only $300 million of it being insurable. Extreme rainstorms in Germany and France, caused $6 billion USD in losses, with insurers paying out half of the cost. Last summer’s epic floods in Louisiana also added to the bill of Mother’s Earth’s wrath, at the cost of $10-15 USD billion according to a 2017 report from British company AON.
It’s not just floods which cause such a financial hit, but also droughts.
In 2015, drought in California cost their economy $2.7 billion USD, along with 21,000 jobs as limited water resources hampered their agricultural sector which lost $1.84 billion USD alone. In the previous year, the same drought caused $2.2 in losses.
Analyst suggests as the climate warms, the frequency of these extreme weather events will increase.
In Canada, and Manitoba has not been unscathed, either.
In 2013, torrential rainstorms in southern Alberta created massive flooding costing $6 billion to the Alberta government. That same summer a flash flood in Toronto added to insurers’ misery with an $850 million bill. A 2016 Policy Options article said insurance costs from natural disasters between 2005 and 2015 reached an average of $1.2 billion. Meanwhile, the Parliamentary Budget Officer in said Extreme weather events will cost Canadians in the future $1 billion yearly, according to The Globe and Mail.
Manitoba has also seen its share of costly and bizarre weather events. Spring flooding in 1997, 2009, and in 2011 wreaked havoc on provincial coffers. The Manitoba 2011 flood cost hit over $1 billion by November 2012 and was one underlying factor in the previous government’s decision to increase the PST by 1% to cover infrastructure costs.
If Manitoba was not punched in the gut hard enough, 2014’s summer flooding from a severe rainfall event cost farmers over $1 billion in lost income, according to CBC.
Insurance providers, governments, and other stakeholders must be well prepared to mitigate risks from extreme weather events in the future. Providing overland flood insurance is one key aspect of reducing flooding risks. In June 2016, The Co-Operators offered overland flooding insurance in Ontario to protect homeowners from these incidents.
Governments could also help reduce extreme weather costs by improved urban planning. Saying no to urban sprawl in low-lying areas on the outskirts of cities from newly developed areas (which are at high risk from flash floods), while improving density within downtown core areas could reduce the potential of governments and insurance companies bearing the financial burden.
Moving forward, extreme weather events will be the new normal as governments face already challenges in stretching their dollars to meet social needs within their fiscal constraint. Understanding these financial risks from more adverse weather events is key to be prepared for the worst effects of such scenarios.
Adam Johnston is a freelance writer on cleantech and renewable energy issues. He owns a part time social media and cleantech writing business. Got a question on renewable energy markets? Contact him at firstname.lastname@example.org.