Wednesday, May 7, 2008

Climate change in the golden state

Lloyd’s: Climate change was one of the key subjects on the agenda when Lord Levene and Governor Schwarzenegger met last Monday in Sacramento. California represents the sixth largest economy in the world, and is one of the few states in the US which has adopted Kyoto-style emissions targets independently of the federal government. Climate change is a priority issue for Governor Schwarzenegger, who is under no illusions as to the influence that a state like California can have on this issue. In 2007, he stated to a meeting of the student body at Georgetown University that: “California is big, it's powerful and what we do in California has unbelievable impact and it has consequences."

The importance of tackling climate change is something on which Lloyd’s Chairman Lord Levene fully agrees. At a meeting of the World Affairs Council in Washington, D.C. last year, he said: “We cannot risk being in denial on catastrophe trends. We can expect to see US mega-catastrophes with $100bn insured losses soon. We urgently need a radical rethink of public policy, and to build the facts into our future planning.”

California faces a number of specific risks as a result of climate change. The first and arguably one of the most worrying is the shrinking of the Sierra Snow Pack, the large accumulation of snow in the Sierra Nevada and the southern Cascade Mountains. The tightly-packed snow stores much of California’s water reserves, which flows to lower ground as it melts in spring. If warmer winters lead to rain instead of snow, the result could be water shortages during the warm summer months. Flooding is also a concern: flooding in California generally occurs as a result of excessive rainfall which floods rivers and breaks levees. If excessive precipitation becomes more frequent, flooding will become an even greater issue than it is currently.

Wildfires are another worry for California, with fires decimating the landscape and causing $1bn of damage in 2007 alone. Under many climate change scenarios, dryer conditions will increase the risk of forest fires spreading and getting out of control. Scientists suggest that climate change has already had an impact on this risk….

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