According to a recent Swiss Re focus report on the matter, coastal flood damage and winter storms in Northern Europe will become more severe and more frequent, triggering more intense storm surge events and drastic rise in sea levels. "The unfavorable impact of the tides, more intense surges and higher sea levels lead to an increase in peak surge heights of between 36% and 55% compared to today's levels, and consequently to a pronounced rise in coastal damage potential," states the report.
Swiss Re reports that currently, the annual expected loss burden from surge events stands at around €600 million, however, the figure could rise to €2.6 billion annual loss toward the end of the 21st century. Another recent report, issued by the World Wildlife Fund (WWF) and Allianz, focused on the risk that climate change poses to coastlines of the United States. The report estimates that the current assets at risk to a 1-in-100-year storm surge could amount to $1.4 trillion, while a mid-century sea rise of 20 inches (with an additional six inches along the Northeast U.S. coast) could jeopardize assets worth close to $7.4 trillion. And if that rare New York hurricane were to actually make landfall in the Big Apple, the report claims that damage from a Category 4 storm could range from $1 trillion to $4 trillion.
"With each new study, the alarm bells become deafeningly clear that climate change will have devastating consequences for our economy and way of life," said David Reed, senior vice president of policy at WWF. "Time to address this issue is growing short."
The common argument in both studies is that coastal flood damage is inevitable in all coastal areas and the only solution, besides reducing emissions, that countries can do to help right now is to utilize risk reduction and risk transfer measures. More importantly, adapting land-use planning and the continuous strengthening of sea defenses are needed for coastal communities to prepare for and potentially prevent coastal damage caused by climate change. If once-in-a-millennium storm surge events strike Northern Europe or the United States every 30 years, as some experts believe will happen by the end of the century, governments and insurers will have a substantial amount of risk to manage. And though insurance is usually a useful way of managing risk, the world cannot insure its way out of climate change.
"Much of the debate in the U.S. over climate change has focused on the costs of actions to reduce emissions," said Reed. "The findings of this report highlight the enormous costs of doing nothing."