Anthrax warning as climate crisis becomes unstoppable

Swiss Re has warned the increasing impact of climate change will go far beyond global weather patterns and could include the re-emergence of long forgotten deadly pathogens.

The tenth anniversary edition of the reinsurer’s SONAR report warns that climate change will continue to impact the planet but that the threat of the further the thawing of permafrost, which covers a quarter of the northern hemisphere, could have deadly and unexpected consequences.

In a scenario which could have been lifted from a Fredrick Forsyth thriller Swiss Re’s team warn the loss of permafrost has the potential to see the release of deadly pathogens which have long been frozen.

Swiss Re’s SONAR programme stands for “Systematic Observation of Notions Associated with Risk”, and the company’s chief risk officer has described the climate crisis as “unstoppable”.

However threats go way beyond the severity and frequency of extreme weather events according to the report.

“Thawing permafrost also poses risk to health, of both humans and animals,” it explained. “It can release pathogens previously trapped in frozen ground, such as anthrax. Thawing also causes limestone deposits to release toxic substances, such as mercury and radon. Mercury poisoning of water sources has been reported in permafrost regions. And radon is considered a major cause of lung cancer.

“In sum, further thawing of permafrost could have significant health consequences, which could also mean rising claims in L&H lines of insurance business.”

It added: “An estimated 1400 gigatons of carbon is entombed in permafrost, roughly four times the amount that humans have emitted since the Industrial Revolution. A 2°C temperature rise above pre-industrial levels could result in a loss of about 40% of the world’s permafrost by 2100.

“As permafrost thaws, once-dormant microorganisms begin to break down organic matter, releasing CO2 and methane. The latter is an even stronger greenhouse gas. This would further accelerate the path to irreversible climate change.”

Patrick Raaflaub, group chief risk officer at Swiss Re, explained the report made grim reading as it highlighted the emerging risks the world will potentially face in the years to come.

“A global pandemic, geopolitical conflicts, surging inflation and an unstoppable climate crisis – these are just some of the many risks that SONAR has examined over the past decade that have ultimately materialised,” he added. “However, researching new risks is not about forecasting. It is about raising awareness of risks that may impact society and preparing ourselves accordingly.”

Among the emerging risks highlighted are those around crypto assets.

“In the current highly technology-dependent financial system, cryptocurrencies such as Bitcoin and Ether have established themselves as potential challengers to conventional currencies,” the report stated. “Alongside these new forms of currency, further crypto assets have emerged. Tokens, for example, allow people to buy digital representations of real assets such as art works or real estate. They can be traded and grant their owner access to assets, products or services. Nowadays, an art lover can buy a fraction of a Picasso. The fluid ownership, taxation, regulatory issues and other risks related to the new asset classes present insurers with fresh challenges. For instance, are certain crypto assets implicitly covered by existing property or cyber policies?”

The security of the new digital financial economy is also facing new risks. The report said with quantum computing, for example, a new generation of computers is on the verge of completing tasks far beyond the reach of current machines. These hyper-smart technologies offer significant benefits: sophisticated weather modelling, advanced medical research capabilities and financial analysis. With increasing maturity, they can also become a threat to existing IT-security protocols, potentially hacking standard encryption keys used in online communications and data transfer.

On climate Swiss Re said the warnings continue to be ignored by the world.

“Swiss Re identified the threat of climate change as far back as 1979,” the report explained. “More than 40 years later, the consequences of climate risk are very much present in our everyday lives. Beyond what we already see, climate change creates a new generation of emerging risks.

“Agriculture is an activity that is especially susceptible to climate change – yet it is also an area that is struggling to reduce its contribution to global warming. Emissions from global food production account for about 31% of total man-made carbon emissions.

“The challenge for agriculture is to improve productivity and feed more people while cutting emissions at the same time. Insurers can play a vital role in faster adoption and scaling up of sustainable farming practices by offering suitable coverage solutions and facilitating climate-smart and regenerative agriculture.

The security of the new digital financial economy is also facing new risks. The report said with quantum computing, for example, a new generation of computers is on the verge of completing tasks far beyond the reach of current machines. These hyper-smart technologies offer significant benefits: sophisticated weather modelling, advanced medical research capabilities and financial analysis.

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