(introduction...)

Insurability of losses
Oil pollution
Nuclear damage
Implications
The insurance scheme proposed by AOSIS
The Climate Change Convention
Notes and references
Appendix: Scheme proposed by AOSIS for inclusion in the Climate Change Convention

Michael Wilford

The Reports of the Intergovernmental Panel on Climate Change (IPCC) recognize that the human settlements most vulnerable to climate change are those which are especially exposed to natural hazards, that is, to coastal or river flooding, severe drought, landslides, severe wind storms and tropical cyclones. The IPCC also recognized that the most vulnerable populations are in developing countries; and that in small island countries as well as in coastal lowlands, inundation due to sea level rise and storm surges are a particular hazard (see box on page 170).

The IPCC Working Group II (Impacts) used various scenarios based on a number of different scientific studies. The main scenario upon which Working Group II based its assessments was:

1 an effective doubling of CO₂ in the atmosphere between now and 20252050;
2 a consequent increase of global mean temperature in the range of 1.5C to 4-5C;
3 a sea level rise of about 30-50 cm by 2050 and of about 1 metre by 2100, with a rise in the temperature of the ocean surface layer of between 0.2C and 2.5C.

This scenario pre-dated, but is in line with, the assessments of IPCC Working Group I.

In assessing the effects of climate change on the oceans and coastal zones the IPCC reports point out that global warming would not only accelerate sea level rise, but would also modify ocean circulation and change marine ecosystems, with considerable socioeconomic consequences. These effects will add to the present trends of rising sea level and damage to coastal resources from pollution and over-harvesting. A 30 cm sea level rise will threaten low islands and coastal zones. A one metre rise would render some island countries uninhabitable. The Coastal Zone Management Subgroup also emphasized that:

Vulnerability of the Maldive Islands to sea level rise

The current environmental problems of the Maldives are in large part the result of the high density population (650/km2) which is aggregated onto relatively few islands within each atoll. The problems of the capital island, Male, have reached a critical level in several areas increasing the island's susceptibility to episodic events such as storm generated high waves. In other areas and atolls the problems are also locally severe increasing the susceptibility of such areas to future climatic change and sea level rise. This increased susceptibility is due to

• coral mining for construction and road surfacing;
• land reclamation, particularly on the seaward edges of islands;
• construction of coastal infrastructure including sea walls, breakwaters, jetties, piers, groynes and harbours;
• aquifer depletion and saline intrusion.

All of the current environmental problems are exacerbated by:

• high population growth;
• a lack of mechanisms within government for taking environmental problems into consideration in the planning process;
• a lack of guidelines and procedures for the evaluation of environmental issues;
• a lack of an adequate in-country data base covering many physical and biological parameters;
• a shortage of trained manpower at all levels.

The current, environmentally unsound, practices will increase the susceptibility of the Maldives to changes predicted to occur as a consequence of global warming and the greenhouse effect. Assuming a sea level rise of 12-18 cm by the year 2030 one might anticipate profound effects on those islands of the Maldives which have been structurally modified, since the normal processes of sand genesis, deposition, removal and flux between sinks have been altered by changes to the micro-climate and current regimes.

The impact of 'high waves' will be greater with greater mean sea level and such increases must be taken into consideration in planning future coastal infrastructure. Changes to aquifer volumes may be expected under higher sea levels; however, such changes will be less important on islands where the aquifer is not currently over-exploited. Saline intrusion will be exacerbated in those aquifers which are heavily used for human consumption.

Increased temperatures (of perhaps 1.5C by 2030) will affect the human environment, agricultural production, and marine ecosystems. Given the country's proximity to the equator, the Maldives can expect a lower than average temperature rise which may have little impact on the human environment but may be expected to result in some increased demand for air conditioning. Agricultural production and terrestrial ecosystems are likely to be less affected than marine organisms such as corals, many of which are currently growing at temperatures close to their upper thermal tolerance limits.

Perhaps the area of greatest current concern in the Maldives is the possibility of an increased frequency of storm-generated swells and high waves, particularly given the experiences of the country during 1987. Analysis of the meteorological patterns in the Indian Ocean is urgently required to predict the possibility of an increased frequency of such events.

Situations of high sea level at the coast of the atolls are caused by storm surges and waves setup. A degree of coastal flooding due to high tides has been experienced in the past at various places. Recent flooding has been made more noticeable by its impact on construction such as sea walls and houses near the shore and on low-lying reclaimed land. The July 1988 high water situation at Thulhadhoo (Malosmadulu Atoll) was caused by high southwesterly waves (5 m high, periods 12-15 seconds) in association with high spring tide and a southwesterly wind. The damage caused was enhanced by the absence of beaches and the presence of vertical low seawalls which magnified overtopping and flooding. These events are a reminder that occasional natural events of long distance swells and high water levels due to wave surge and/or high tides, would in themselves cause little damage to the Maldives atolls, were it not for the mismanagement that has taken place in recent years. This mismanagement includes stripping the islands of the natural defences afforded by the outer reefs, the reef flats and the beaches.

Social impacts arising from changes to island stability and/or habitability are likely to be extensive given the nature of Maldivian society which is characterized by generally low mobility and strong attachment to individual atolls and islands. Economic impacts will be most intensely felt if the tourist industry is adversely affected. The present structure of the tourist industry is based on 'resort islands' which are essentially self-contained and as a consequence pack considerable infrastructure on the land and coastline of very small islands. The present tourist industry is concentrated in the Central Maldives, hence increasing the risk to this sector of the economy.

Excerpt from J Pernetta and G Sestini, The Maldives and the Impact of Expected Climatic Changes, UNEP Regional Seas Report 104, UN Environment Programme, Nairobi, 1989, pp 27-8; 38.

Sea level rise could increase the severity of storm-related flooding. The higher base for storm surges would be an important additional threat in areas where hurricanes, tropical cyclones and typhoons are frequent, particularly for islands in the Caribbean Sea, the south eastern United States, the tropical Pacific and the Indian sub-continent ... Many small island States are ... particularly vulnerable. This is reflected in their very high ratios of coastline length to land area. The most seriously threatened island States would be those consisting solely, or mostly, of atolls with little or no land more than a few metres above sea level. Tropical storms further increase their vulnerability and, while less in magnitude than those experienced by some of the world's densely populated deltas, on a proportional basis such storms can have a much more devastating impact on island nations.

These predictions of the increasing impact of severe storms have not been lost upon the insurance industry.

In a review of the effect of climate change on insurance one of the world's largest reinsurers has recently written:

Detailed measurements in the Pacific show that the areas with water temperature at the surface above 27C have expanded by about one-sixth in the last two decades. While substantial fluctuations from one year to the next and additional factors such as El Niake it impossible so far to prove the effect of such higher temperatures on the frequency of tropical cyclones, super-hurricanes 'Gilbert' and 'Hugo' may certainly be regarded as a clear sign of an increase in hurricane intensity. According to estimates, hurricane activities in the Caribbean will increase considerably in the next two to three decades, the loss potential going up by more than 50%. Together with the rising level of the sea, this also means a much greater risk of storm surges in densely populated coastal regions in the tropics and sub-tropics.

These insurers predict that there will be a global increase in catastrophic losses from a current annual average of about US$20 billion to about US$100 billion per year in overall economic terms. And that, it may be assumed, does not take into account the potential longer term consequences of climate change.