Global warming exceeded benchmark for the first time
Source: Middle East Insurance Review | Mar 2024
The year 2023 marks the first time on record that every day within a year exceeded 1 degree C above the 1850-1900 pre-industrial level for that time of year according to European Union’s Copernicus Climate Change Service.
The report Global Climate Highlights 2023 said, “Close to 50% of days were more than 1.5 degrees C warmer than the 1850-1900 level and two days in November 2023 were, for the first time, more than 2°C warmer.”
The year 2023 was the planet’s hottest year in global records going back to 1850, while extreme weather events of last year have continued into 2024 according to the report. The y-o-y increase in global-average temperature was exceptionally large from 2022 to 2023, following a transition from three years of La Niña (2020–2022) to El Niño conditions in 2023, although other factors appear to have also played a role.
Other important findings of the report include:
- 2023 had a global-average temperature of 14.98 degrees C, 0.17 degrees C higher than the previous highest annual value in 2016.
- 2023 was 0.60 degrees C warmer than the 1991-2020 average and 1.48 degrees C warmer than the 1850-1900 pre-industrial level.
- It is likely that a 12-month period ending in January or February 2024 will exceed 1.5 degrees C above the pre-industrial level.
The report said the insurance companies could face billions of dollars in losses if they stay on the current course of investments that contribute to climate change.
The report released in February 2024 warns that companies that do not have effective long-term plans in place would face higher costs in the event of a “transition shock,” or a revaluing of fossil fuel-related assets as the world economy moves to cleaner technologies and shows losses could range from $7bn to $40bn on corporate bonds in coming decades.
Life insurers have the most value invested in the oil and gas extraction sector ($150bn), while property/casualty insurers have the smallest share of their listed equity portfolio value in oil and gas extraction (less than 1%) amounting to $6bn in assets. M