Some impacts of the climate crisis on specific industry sectors
By Paul Mahony /

My recent presentation “Risk Management, Insurance and the Climate Crisis” focussed on the increase in likelihood and consequences of extreme weather events resulting from climate change. Here’s a sample of points from that presentation and elsewhere, including points relevant to specific industry sectors (with some irony existing in respect of certain high-emissions sectors).


Inundation by sea:

  • Projections of sea level rise by the IPCC (Intergovernmental Panel on Climate Change) do not take into account critical factors such as ice sheet dynamics on Greenland and Antarctica or the melting of permafrost in Siberia, Canada and elsewhere (releasing massive amounts of methane and carbon dioxide). Taking those and other relevant factors into account, the former long-term head of NASA’s Goddard Institute for Space Studies, Dr James Hansen, says that sea level rise of several metres is feasible by 2100 if we continue with “business as usual”, subject to the impact of certain negative feedback mechanisms.
  • A 50 centimetre (18 inch) rise in sea level increases the likelihood of a major inundation event by between several hundred and 1,000 times. That means that what was a 1-in-100 year event could occur nearly monthly.

Storm intensity:

  • A warming climate results in more water vapour in the atmosphere. Water vapour is a key greenhouse gas in its own right, and also causes more energy in the form of latent heat to be present in the atmosphere to fuel storms.
  • The likelihood of a hurricane with the strength of Hurricane Katrina or greater increases 2 – 7 times for every 1 degree celsius increase in global temperature.
  • The extent of building damage increases by around 650 percent from just a 25 percent increase in wind speed from 40 – 50 kmh to 50 – 60 kmh. (10 kmh = 6 mph.)

Bushfire (wildfire):

  • Climate change can affect bushfire (wildfire) conditions by increasing the probability of extreme fire weather days. As an example, many parts of Australia have seen an increase in extreme fire weather over the last 30 years. The projections for the future indicate a significant increase in dangerous fire weather for southeast Australia.

Non-linear trends:

  • Many of the trends in the frequency and intensity of extreme events and in the destructive capacity of those events resulting from climate change are non-linear, meaning that the past history of events is not necessarily a reliable guide to current and future impacts.
  • Given the conservative nature of many of the IPCC’s projections (refer above), other credible sources should also be considered. Australia’s former Chief Climate Commissioner, Professor Tim Flannery, has described the IPCC as “painfully conservative” because of the parties involved and the desire to achieve consensus.

Property and Construction:

  • In Australia, $159 billion worth of buildings are vulnerable to sea level rise, including 8,000 commercial, 6,000 industrial and 274,000 residential properties. Similar problems exist elsewhere.
  • The frequency of hail storms in Sydney, Australia, is predicted to increase by 20 percent by 2050. Australia’s costliest insurance claim arose from a one-hour hail storm in that city in 1999, which caused damage of A$4.3 billion (2011 dollars).


  • Cyclone Yasi and flooding in 2011 shut down 85 percent of coal mines in the state of Queensland, Australia, costing $2.5 billion. (Australia is the world’s second largest coal exporter, and Queensland is a major source.)


  • The US Department of Energy has said that climate change has created an increased risk of shutdowns at coal, natural gas and nuclear power plants due to decreased water availability affecting cooling at thermoelectric power plants.
  • They also say there are higher risks to energy infrastructure located along the coasts due to sea level rise, the increasing intensity of storms, higher storm surge and flooding and that power lines, transformers and electricity distribution systems face increasing risks of physical damage from hurricanes, storms and wildfires.
  • At the Hazelwood power station in Australia, an open coal mine fire started from bushfire in 2006. The coal fire was 2 kilometres (1.25 miles) long and took weeks to control.


  • The storm surge from Hurricane Katrina in 2005 caused the closure of nine refineries, resulting in the total shutdown of oil production in the Gulf of Mexico for six months and reducing annual US oil production by more than 20 percent.
  • The Gorgon LNG project off Western Australia experienced construction cost blow outs of US$15 billion, partially due to cyclones and other extreme weather events.
  • Up to 50 percent of Australia’s oil refineries are on the coast not far above sea level.

Employer Groups and Unions:

  • The 2003 European heatwave that was responsible for more than 35,000 deaths was 6 times more likely due to climate change.
  • An Australian heatwave in early 2009 resulted in 62 percent more heat-related deaths than normal in the city of Melbourne.
  • There is an 80 percent probability that the 2010 Moscow heat wave, responsible for 11,000 deaths, was caused by climate change.
  • According to Dr. Liz Hanna of Australian National University’s National Centre for Epidemiology and Population Health, part of Australia are reaching the threshold where it was impossible for normal life to continue because of the heat. She said, “If employers ask people to continue to work in temperatures above 37°C, they will be killing them in increasing numbers”.

Federal, State and Local Planning Regulators:

  • Possibly inadequate planning controls in relation to flooding, bushfire and other hazards may expose regulators such as local councils and state and federal governments to risk of legal action.
  • A report from Australian National University and the Investor Group on Climate Change stated: “There is a growing recognition of how inadequate current regulatory frameworks are to protect company assets and operations from more intense extreme weather events.”
  • Barbara Norman of the University of Canberra has stated: “As the science on the coastal impacts of climate change gets stronger, the protections for Australia’s coastal communities are getting weaker. If that continues, everyone will pay. Along the eastern seaboard of Australia, where most of us live, state governments are relaxing their policies and largely leaving it to local councils to decide if homes can be built in low-lying areas.”

Other Issues:

  • Various cities are considered to be at extreme risk from climate change, including:
    - Dhaka, Bangladesh;
    - Manila, Philippines;
    - Bangkok, Thailand;
    - Yangon, Myanmar;
    - Jakarta, Indonesia;
    - Ho Chi Minh City, Vietnam; and
    - Kolkata (Calcutta), India.
  • 31 percent of global economic output will be based in countries facing ‘high’ or ‘extreme’ risks from the impacts of climate change by 2025.
  • An advisor to a state government in Australia prepared a comprehensive report for the state’s captive insurer in 2010 (updated in 2011) on impacts of climate change on the insurer’s portfolio, reflecting significant impacts.
  • Researchers from Cornell and Rutgers Universities have suggested that the severe loss of Arctic summer sea ice appears to have intensified Arctic air mass invasions to toward middle latitudes.
  • Records between 2003 and 2008 reflected a 10-fold increase in extreme summer temperatures (hot and cold) relative to the base period of 1951-1980. Extreme temperatures are considered to be more than three standard deviations from the historical mean temperature.

In relation to the final point, the following chart from NASA’s Goddard Institute for Space Studies demonstrates the changing patterns for the period 2000-2010:


I have no doubt that the massive impacts of climate change are being recklessly ignored by key decision makers. Do you concur? I’d welcome your feedback in the comments section below.

Blog Author: Paul Mahony (also on on Twitter, Slideshare and Sribd)

April Saylor, US Dept of Energy, “Climate Change: Effects on Our Energy”, 11 July 2013,

Dr Michael H. Smith, Australian National University/Investor Group on Climate Change: “Assessing Climate Change Risks and Opportunities for Investors: Property and Construction”; “Assessing Climate Change Risks and Opportunities for Investors: Property and Construction”; “Assessing Climate Change Risks and Opportunities for Investors: Oil and Gas”,

James Hansen and Makiko Sato, “Update of Greenland Ice Sheet Mass Loss: Exponential?”, 26 December 2012,

Dr Myles Allen and colleagues, Oxford University, cited in “Cuts in emissions are at a premium” by Liam Phelan, Sydney Morning Herald, 25 January, 2011,

David Spratt, “Parts of Australia reaching threshold where it is impossible for normal life to continue because of the heat, says climate impacts researcher”, Climate Code Red, 17 Nov 2013,

World Coal Association, Coal Statistics (2012),

Maplecroft Climate change and environmental risk atlas:;

Environment Victoria, “Victorian government insurance premiums to soar due to climate change”, 7 Jan 2013,

Tom Arup, The Age, “Climate threat to state assets”, 7 Jan 2013,

Jennifer A. Francis, Stephen J. Vavrus,Evidence linking Arctic amplification to extreme weather in mid-latitudes”, Geophysical Research Letters Volume 39, Issue 6, March 2012, cited in Freedman, A., “Arctic Warming is Altering Weather Patterns, Study Shows”, 30 Sep, 2012,

Hansen, J., Sato, M. & Ruedy, R. “Climate Variability and Climate Change: The New Climate Dice” (Preliminary Draft), 10 Nov 2011,

Tullis, P. “Global Warming: An Exclusive Look at James Hansen’s Scary New Math”, Time Science & Space, 10 May, 2012,

Goddard Space Flight Center Scientific Visualization Studio, 2 Aug 2012 “Shifting Distribution of Northern Hemisphere Summer Temperature Anomalies, 1951-2011”, Animation No. 3975, Australian Climate Commission, Apr 2013, “The Critical Decade: Extreme Weather”,

David Spratt,“Global Warming – No more business as usual: This is an emergency!”, Environmental Activists’ Conference 2008: Climate Emergency – No More Business as Usual, 10 October, 2008, reproduced in Links International Journal of Socialist Renewal,

Barbara Norman, “Scrapping sea level protection puts Australian homes at risk”, The Conversation, 11 December, 2013,

Image: Car hit by Hail © Robert Ruggiero |

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Some impacts of the climate crisis on specific industry sectors