Sunday, December 18, 2016

An Eighth Year - Some Rain


We've had a recent winter rainstorm now, they're very infrequent in Southern California these days. Finally a series of cool days but not like there used to be. The winters are definitely changing, and this is creating issues around the globe. There's a dialogue emerging in Britain because climate change threatens ability of insurers to manage risk. Earlier this month, ClimateWise, a global network of 29 insurance industry organisations which is convened by the University of Cambridge Institute for Sustainability Leadership, has warned of the urgent need to address the growing $100 billion annual climate risk 'protection gap' in two new reports; Investing for Resilience and the ClimateWise Principles Independent Review 2016.

Bank of England chief Mark Carney is very clear that he has warned that the fight against climate change will be jeopardized unless companies with big carbon footprints come clean about their exposure to global warming risks.Carney, writing jointly with the former New York City mayor, Michael Bloomberg, said citizens, consumers, businesses, governments and international organizations were all taking action in response to extreme weather events. Bloomberg’s Task Force on Climate-Related Financial Disclosures has published its recommendations for a voluntary disclosure code. It will cover four areas considered by Carney and Bloomberg to be vital to how businesses operate – governance, strategy, risk management and metrics:

The FSB Task Force on Climate-related Financial Disclosures (TCFD) will develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.

The Task Force will consider the physical, liability and transition risks associated with climate change and what constitutes effective financial disclosures across industries.

The work and recommendations of the Task Force will help companies understand what financial markets want from disclosure in order to measure and respond to climate change risks, and encourage firms to align their disclosures with investors’ needs.


Financial disclosure is essential to a market-based solution to climate change. A properly functioning market will price in the risks associated with climate change and reward firms that mitigate them. As its impact becomes more commonplace and public policy responses more active, climate change has become a material risk that isn’t properly disclosed. The areas America could abandon first is discussed by Bloomberg with respect to a managed withdrawal from disaster-prone areas that require frequent financial assistance from FEMA. It's becoming necessary even for the Federal government to limit its exposure to climate change events.

A broader discussion comes from an article published last year in the Financial Times about what's needed to tackle climate change. In his book Why Are We Waiting?, Nicholas Stern, author of the Stern Review on the economics of climate change, lays out the challenges and opportunities with clarity and passion. Again, it's about the cost of not facing this most devastating issue of our time.

Update 12/18/16:  Why Doesn't It Snow in L.A. Anymore?

Update 12/31/16: Projected Sea Level rise in Los Angeles 2100

Update 1/1/2017:  Miami, as we know it today, is not going to exist