ÈȵãºÚÁÏ

Even with all the storms the Western U.S. received in the last two years, climate change is baking the region.

That’s because higher temperatures are increasing evaporation enough to cause drought, according to a study by UCLA scientists and National Oceanic and Atmospheric Administration. (For more on the heat, read down to the item on the findings from the Copernicus Climate Change Service).

The unprecedented 2020–2022 Western U.S. drought exemplifies the shift in drought drivers states.

The researchers found that evaporation accounted for 61% of a drought’s severity compared with 39% from reduced precipitation. This “evaporative demand” has played a bigger role than reduced precipitation in droughts since 2000, suggesting that droughts will become more severe as the climate warms.

“Climate model simulations corroborate this shift and project that, under the fossil-fueled development scenario (SSP5-8.5), droughts like the 2020–2022 event will transition from a one-in-more-than-a-thousand-year event in the pre-2022 period to a 1-in-60-year event by the mid-21st century and to a 1-in-6-year event by the late-21st century,” the study states.

The study uses data from the National Oceanic and Atmospheric Administration compiled from 1948 to 2022.

EIOPA

The European ÈȵãºÚÁÏ and Occupational Pensions Authority’s final report on the treatment of sustainability risks within Solvency II recommends additional capital requirements for fossil fuel assets on the balance sheets of European insurers to reflect the high risks of the assets.

The report follows a mandate from the European Commission to assess the potential for a dedicated prudential treatment of assets and activities associated with environmental or social objectives or those that harm such objectives.

The report covers three areas: the market risk of assets exposed to the climate transition; the impact of climate risk-related prevention measures on non-life underwriting risks; and the treatment of social risks.

“EIOPA’s backward and forward-looking analysis of equity and spread risks demonstrates that fossil fuel-related stocks and bonds are more exposed to transition risks than assets connected to other economic activities,” according to from EIOPA. To ensure that European insurers set aside enough capital to withstand potential losses from investments in assets with high transition risks, EIOPA is recommending additional capital charges for these assets. This approach would better align capital requirements with insurers’ actual risk exposures.”

Insure Our Future, a global campaign of NGOs and social movements, said EIOPA’s report is a warning and a positive message to insurers that underwrite coal, oil and gas.

“The insurance industry has an opportunity to catalyze the equitable, clean energy transition for communities, families, and workers,” the statement reads. “By doing so, insurers will mitigate catastrophic losses by reducing pollution, while unlocking the financial benefits from renewable energy insurance that is expected to generate cumulative premiums of $237 billion by 2035.”

2024 Heat

The planet had another year of record-breaking temperatures, the European Union’s Copernicus Climate Change Service said on Thursday.

The data was released ahead of next week’s U.N. COP29 climate summit in Azerbaijan, where countries will try to agree a huge increase in funding to tackle climate change.

The C3S said that from January to October, the average global temperature was so high that 2024 is sure to be considered the world’s hottest year, according a Reuters article on ÈȵãºÚÁÏ Journal this week.

“The fundamental, underpinning cause of this year’s record is climate change,” C3S Director Carlo Buontempo told Reuters. “The climate is warming, generally. It’s warming in all continents, in all ocean basins. So, we are bound to see those records being broken.”

Reuters also reported that scientists said 2024 will be the first year in which Earth is more than 1.5C hotter than in the 1850-1900 pre-industrial period.

The high temperatures have continued into the fall. October 2024 was the second-warmest October globally, after October 2023, at 1.65°C above the pre-industrial level and the month was the 15th month in a 16-month period for which the global-average surface air temperature exceeded 1.5°C above pre-industrial levels, according to .

Climate Initiatives

Climate initiatives fared well across the country in the elections this week, according to Inside Climate News.

The publication, which focuses on climate reporting, compiled and bills related to the climate.

The list shows that from “California to Louisiana, ballot measures on climate and the environment gained voters’ approval. In state legislatures, results were mixed.”

According to Inside Climate News, five of six ballot measures related to climate change resulted in what most environmentalists might consider wins, but state legislative races with the potential to impact climate policy produced “more uneven results.”

Washington voters on Tuesday voted down a measure to overturn the Climate Commitment Act, which authorized a “cap and invest” program to reduce greenhouse gas emissions, while California voters approved a $10 billion bond measure to boost climate resilience across a state.

Voters passed a ballot initiative in Honolulu, Hawaii, to create a climate resiliency fund.

Past columns:

• Report: Climate Risks Increasing ÈȵãºÚÁÏ Rates and Hurting CRE Returns
• Group of Scientists Say Climate Change Drove Helene Impacts
• Climate Change and Rising US ÈȵãºÚÁÏ Rates
• ‘Impossible’ Weather Increasingly Blamed on Climate Change
• CBO Says Mortgage Subsidy Cost from Flood Damage to Hit $395M by 2053

Topics USA Climate Change Aerospace