Archives for the month of: April, 2015

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Meat and Livestock Australia has published a series of study guides for primary and secondary school students.

This post focuses on one of the primary school guides, “Cattle and the Environment”, released in 2010. [1] Copyright rules prevent me from showing images from the guide, but in my view, the above image (from elsewhere) gives some idea of the style.

As a general comment, I don’t feel that it’s asking too much to expect a study guide to be factual. If it’s not, could there be an ulterior motive?

Having said that, I anticipate that many kids studying this topic will be too astute to be brainwashed by industry PR.

Soils and vegetation

MLA Claim #1

“Although in the past some agricultural land was cleared, these days farmers understand the importance of balancing plant, animal, insect and bird life with agriculture.”

The reality

So in the past some agricultural land was cleared?

That’s an understatement.

Around 70 percent of Australia’s 7.7 million square kilometre land mass is arid or semi-arid, leaving 2.3 million square kilometres of reasonably fertile land. Against that background, it’s sobering to consider that we have cleared around 1 million square kilometres since European settlement, including around 700,000 square kilometres for animal agriculture, including meat, dairy and wool. [2]

In the 1990’s, Australia was the only country in the top 20 land-clearing nations with a developed first world economy. (We were ranked 6th.) Most clearing in recent decades has occurred in Queensland. In the early 2000s, if that state were a country, it would have ranked 9th in terms of land clearing. [3]

By converting forest and other wooded vegetation to grassland, we have lost an enormous sequestration (carbon absorption) benefit. Figure 1 gives some idea of our poor record, including clearing across most of Victoria (south-east corner of the mainland). [4]

Figure 1: Cleared native vegetation and protected areas in Australia

Slide01

MLA’s statement almost seems to imply that clearing for animal agriculture has ceased. However legislation in Queensland that banned broad-scale land clearing (subject to exemptions) effective from December 2006 was overturned in 2013 in respect of land deemed to be of “high agricultural value”. [5]

Even with the previous so-called ban in place, extensive clearing for pasture occurred, including an estimated 134,000 hectares in 2011/12. [6] That equates to around 2.4 regular suburban house blocks per minute, for every minute of the year. [7]

Former principal scientist with the Queensland government, Gerard Wedderburn-Bisshop [Footnote 1], has confirmed in correspondence that over 95 percent of clearing within the “pasture” category of the government’s Statewide Landcover and Trees Study (SLATS) was estimated to be for cattle grazing.

The forests will always be at risk of further clearing, depending largely on the inclination of the government of the day. The recently signed free trade agreement with China is likely to increase pressure for further livestock-related land clearing.

Similar problems have been highlighted in the The Pew Charitable Trusts‘ October, 2014 publication, The Modern Outback: Nature, people, and the future of remote Australia, in which the authors commented extensively on the destructive environmental impacts of livestock grazing. [8] Problems include tree clearing, introduction of invasive pasture grasses, degradation of land and natural water sources, and manipulation of fire regimes (p. 167-171).

The authors highlighted the fact that the environment improves when pastoralists move away from intense grazing activity.

The sheer scale of grazing in this country is demonstrated in Figure 2. [9]

Figure 2: The location of grazing land in Australia in 2005-06 showing NRM (natural resource management) regions within and outside the rangelands. Source ABARE-BRS

Australian-grazing-lands

While grazing continues, former forest and other wooded vegetation is unable to regenerate.

Without massive reforestation aimed at drawing down existing atmospheric carbon, the world’s pre-eminent climate scientist, Dr James Hansen and co-authors, say we will not return to CO2 concentrations of 350 parts per million (ppm), which is (in their view) a pre-requisite for overcoming the threat of climate change. [10]

The issue was also highlighted in a 2009 report from the PBL Netherlands Environmental Assessment Agency in which the authors stated:

“. . . a global food transition to less meat, or even a complete switch to plant-based protein food [was found] to have a dramatic effect on land use. Up to 2,700 Mha of pasture and 100 Mha of cropland could be abandoned, resulting in a large carbon uptake from regrowing vegetation. Additionally, methane and nitrous oxide emissions would be reduced substantially. [11]

They said a plant-based diet would reduce climate change mitigation costs by 80%. A meat-free diet would reduce them by 70%. Their assessment was based on a target CO2 concentration of 450 ppm. The issue is even more critical when aiming for 350 ppm.

MLA Claim #2

“Trees and plants [that grow where cattle graze] not only provide a home, shade and food for animals, birds and insects, they also help to stop soil erosion.”

The reality

Given the reality of broad-scale land clearing for cattle grazing, it seems bizarre that MLA should try to promote its industry as beneficial in terms of “trees and plants” and soil health. Let’s consider the reality of land degradation (including erosion) and loss of habitat and biodiversity.

The Food and Agriculture Organization of the United Nations (FAO) has stated that livestock production “is one of the major causes of the world’s most pressing environmental problems, including global warming, land degradation, air and water pollution, and loss of biodiversity.” [12]

The plight of the Great Barrier Reef provides a stark example of cattle grazing’s destructive qualities arising from soil erosion.

The journal Water Science and Technology has reported on the impact of run-off from areas used for cattle grazing to the Great Barrier Reef Marine Park (GBRMP) [13]:

“Grazing of cattle for beef production is the largest single land use on the catchment with cropping, mainly of sugarcane, and  urban/residential development considerably less in areal extent. Beef cattle numbers are approximately 4,500,000, with the highest stock numbers in the Fitzroy catchment.”

“Beef grazing on the large, dry catchments adjacent to the GBRMP (in particular the Burdekin and Fitzroy catchments) has involved extensive tree clearance and over-grazing during drought conditions. As a result, widespread soil erosion and the export of the eroded material into the GBR has occurred, and is continuing.”

The 2012-13 report card of the Reef Water Quality Protection Plan (released in 2014) indicated that only 30 percent of graziers had adopted improved land management practices since the plan commenced in 2009. [14]

The 2013 Scientific Consensus Statement also highlighted the livestock sector’s major role in destruction from pollution, primarily in relation to suspended solids (sediment), nitrogen and phosphorus. [15]

The statement confirmed that grazing areas in the catchment were responsible for the following pollutant loads to the Great Barrier Reef lagoon [Footnote 2]:

  • 75 percent of suspended solids
  • 54 percent of phosphorus
  • 40 percent of nitrogen

The release of nitrogen and phosphorus, and the associated nutrient enrichment, contributes significantly to outbreaks of Crown of Thorns starfish, which have had a massive impact on the reef. [16]

I’ve commented further on livestock-related erosion below under the heading “MLA Claim #4 (Carbon sequestration)”.

Water

MLA Claim #3

“The amount of water consumed by an animal to produce 1kg of beef is between 100–400 litres depending on environmental conditions and the productivity of the farm. If you calculate all the rain that falls in an area where cattle are raised then the figure rises to around 50,000 litres. But that rain will still fall whether there are cattle there or not, so to say it takes that much to produce a kg of beef is not really correct.”

The reality

The figure of 50,000 litres per kilogram of beef has been cited many times. However, the estimate was actually 50,000 – 100,000 litres. The source was Wayne Meyer of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and Professor of Natural Resource Science at The University of Adelaide. [17]

The figures were originally derived for intensive production using irrigated pastures. Prof. Meyer has subsequently suggested that if the same exercise were conducted on rain fed, extensive meat production, there may even be more water involved. The reason is that feed conversion is likely to be lower, energy expended in gathering dry matter (including grass) would be greater and soil evaporation losses may even be higher than in a system involving irrigated pasture. [18]

It then becomes a question of the optimum use of the water, taking into account potential alternative uses. Prof. Meyer has pointed out that water used for irrigation has many alternative uses, including keeping it in the river systems, keeping riverine and wetland ecosystems healthy and providing water to urban and industrial uses. He has noted that alternatives for rain fed areas are more restricted, but could include provision of run-off in catchment areas, growing native vegetation for conservation purposes and or for groundwater recharge.

He has said:

“Using this logic there is little value in arguing that meat production does not embody a lot of water. More  rationally the discussion can be about the value we place on the genuine alternatives for the use of this water.”

In areas where crops for human consumption can be grown, there are high opportunity costs in meat production, with the nutritional output of plant-based foods generally being many times that of meat for any given quantity of water.

Some comparative water usage figures from Prof. Meyer (litres per kilogram of product):

  • Wool: 171,500
  • Beef: 50,000 – 100,000
  • Cotton (lint): 5,300
  • Rice (white): 2,385
  • Wheat: 1,010
  • Maize: 576

If we were to adequately value natural ecosystems, then allowing rain-fed, natural vegetation to be consumed by introduced cattle would carry an extremely high price.

In 2012, the UN adopted a new international standard to give natural capital equal status to GDP. The new approach was referred to in a Scientific American article of 30th August, 2013 headed, Banks Put a Price on Earth’s Life Support“.  [19] The Natural Capital Declaration defined natural capital as “the Earth’s natural assets (soil, air, water, flora and fauna), and the ecosystem services resulting from them, which make human life possible.”

According to the article, the ultimate target date is 2020 “to get an international system up and running and recognized by all governments signed on to the UN Framework Climate Change Convention”.

The article concluded with the words:

“It may be slow and difficult work, they acknowledge, but they believe this is vital to prevent the current economic system destroying the planet.

Profound words indeed.

Greenhouse gas

MLA Claim #4 (Carbon sequestration)

“Unlike many other countries, in Australia our cattle generally graze on extensive, natural pastures which help to capture carbon dioxide, another greenhouse gas. The capture of carbon by plants and storing in the soil is known as ‘sequestration’.”

The reality:

According to Australia’s Chief Scientist:

Based on data from typical perennial grasslands and mature forests in Australia, forests are typically more than 10 times as effective as grasslands at storing carbon on a hectare per hectare basis.” [20]

By definition, natural grasslands would exist in the absence of cows who are members of an introduced species, force-bred in massive, unnatural numbers by the farming sector. In any event, those grasslands are severely compromised by grazing pressures.

Gerard Wedderburn-Bisshop highlighted the impact in a 2012 radio interview. [21] He referred to the “fence line effect” in northern Australia (where around 70 percent of Australia’s beef is produced), whereby bare ground often exists on one side of a fence, while on the other there is knee-high native grass. The bare side is typically owned by a pastoral company seeking to maximise its financial return. It will have increased stocking rates during times of favourable rainfall, then taken too long to reduce those rates during drought. The land becomes degraded, and carbon stores significantly depleted.

The problem was also highlighted in the Land Use Plan (of which Wedderburn-Bisshop was a co-author) produced by climate change advocacy group, Beyond Zero Emissions (BZE) and the Melbourne Sustainable Society Institute of The University of Melbourne. [22] BZE pointed out that soil carbon losses from Australia’s agricultural land due to wind and water erosion are greatly accelerated by the removal and disturbance of vegetation. They said that 80 percent of such emissions came from rangeland grazing areas.

MLA Claim #5 (Ruminant animals)

“There are many animals that are ruminants, they include: cattle, camels, giraffes, bison, deer, sheep, alpacas, yaks, wilderbeests [sic], goats, llamas, buffalo, water buffalo, antelope.”

The reality

I thank MLA for that information.

However, cattle dominate global ruminant biomass (or overall weight), contributing to the fact that not all ruminant species are created equal in terms of environmental destruction. [23]

The forced and selective breeding of food production animals for increased population size and accelerated growth has greatly increased the overall animal biomass and related greenhouse gas emissions.

Let’s look at the global biomass of three species used in MLA’s comparison; cattle, giraffes and wildebeest [Footnote 3].

Figure 3: Global biomass of cattle relative to wildebeest and giraffe

Biomass-comparison-cow-2-cropped

Biomass-comparison-wildebeest-cropped Biomass-comparison-giraffe-cropped

Cattle-biomass-relative-to-wildebeest-giraffe-2

Giraffe numbers have plummeted forty percent in the past fifteen years, with only 80,000 remaining in the wild. The global cattle population is nearly 19,000 times the size of the giraffe population. However, because of the giraffe’s larger individual size, the cattle population’s biomass is “only” around 6,500 times the size of the giraffe’s.

At 2,400 times, the comparison with wildebeest is not as significant, but extremely significant nonetheless.

Based on my calculations, cattle represent more than 70 percent of global ruminant biomass. Sheep, goats and buffaloes represent less than 20 percent combined, while the greatly maligned wild camels in Australia represent less than 0.1 percent (or less than one 700th the cattle biomass).

Another key point is that rainforests and other natural environs are not cleared in order to create pasture and crops to feed giraffes or wildebeest. That issue has been referred to earlier in relation to cattle.

MLA Claim #6 (Cattle in the carbon cycle)

“Cattle are a natural part of the carbon cycle. They eat grass containing carbon, they release some of this carbon into the atmosphere, and the carbon in the atmosphere is then re-absorbed by grass as it re-grows.”

The reality

It sounds wonderful, doesn’t it? If only it were true.

The problem is that much of the carbon emitted by ruminant animals is in the form of methane, whereas carbon dioxide is the greenhouse gas absorbed by plants through photosynthesis.

Perhaps MLA could provide the students with an image of a methane molecule (CH4), containing one carbon atom and four hydrogen atoms.

Although methane contains carbon, it is not carbon.

Figure 4: Methane molecule

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According to the UN’s Intergovernmental Panel on Climate Change (IPCC), over a twenty year time horizon, methane is 86 times as potent a greenhouse gas as carbon dioxide after allowing for climate-carbon feedbacks. Even without those feedbacks, it is 84 times as potent. [24] According to NASA, it is 105 times as potent after accounting for the effects of atmospheric aerosols (particulates). [25]

In the words of Kirk Smith, Nobel laureate and Professor of Global Environmental Health at the University of California, Berkeley, methane is truly carbon on steroids“. [Footnote 4] [26]

MLA Claim #7 (Atmospheric methane concentrations)

“Although carbon dioxide levels in the atmosphere are rising, methane concentrations are stable.”

The reality

Once again, if only it were true. This is what’s happened to methane emissions according to the US National Oceanic and Atmospheric Administration: [27]

Figure 5: Atmospheric Methane Concentrations (NOAA ESRL)

aggi.fig2-methane

Conclusion

It’s bad enough that the PR machines of industry groups such as MLA seek to manipulate the thoughts and actions of adults. However, trying to do the same to children via publications masquerading as legitimate educational tools is unconscionable.

The practice of Western Australia’s Department of Agriculture and Food of linking to MLA’s website on its “upper secondary education resources” page is also questionable. [28]

As unfortunate as it may seem, the ability to remain alert to misinformation from government and industry sources, along with their allies in the media and elsewhere, is a critical skill in our modern society.

Author

Paul Mahony (also on Twitter, Scribd, Slideshare and Viva la Vegan)

Footnotes

1. Gerard Wedderburn-Bisshop is a former principal scientist with the Queensland Government Department of Environment and Resources Management Remote Sensing Centre. He is currently a director and lead scientist with the World Preservation Foundation and was a researcher on Beyond Zero Emission’s Land Use Plan as part of its ZCA2020 project.

2. Comments on nutrient loads were expanded on in the article “Beef and the reef: An update” of 23 December 2018.

3. Because of their longer lifespan (as they are not routinely slaughtered at a young age to the same extent as “traditional” livestock animals), I have used the adult weight of the giraffe and the wildebeest in the comparison. I have only used seventy percent of a cow’s slaughter weight, as the younger animals represent a larger proportion of the population than in the case of the giraffe and the wildebeest. On the same basis, I have used 85% of goats’ and lambs’ slaughter weight, as they are generally slaughtered at a younger age than cattle. I have assumed the number of giraffes in captivity is low relative to the number in the wild.

4. More background on methane’s impact can be seen on my page “GWP Explained“.

Update

17th May, 2015: Reference to Meat and Livestock Australia as a peak industry body deleted.

Sources

[1] Meat & Livestock Australia, “Cattle and the Environment”, June, 2010 (accessed April, 2015), http://www.target100.com.au/Hungry-for-Info/Education/National-Curriculum-Study-Guides [Note: The link is no longer active but updated material as at 27 April 2019 can be accessed here: https://www.goodmeat.com.au/education-resources/]

[2] Derived from Russell, G. “The global food system and climate change – Part 1”, 9 Oct 2008, http://bravenewclimate.com/2008/10/09/the-global-food-system-and-climate-change-part-i/, which utilised: Dept. of Sustainability, Environment, Water, Population and Communities, State of the Environment Report 2006, Indicator: LD-01 The proportion and area of native vegetation and changes over time, March 2009; and ABS, 4613.0 “Australia’s Environment: Issues and Trends”, Jan 2010; and ABS 1301.0 Australian Year Book 2008, since updated for 2009-10, 16.13 Area of crops. Also, in terms of overall land clearing, reference [3], p.232.

[3] Lindenmayer, D. and Burgman, M., “Practical Conservation Biology” (2005, CSIRO Publishing), p. 230, http://www.publish.csiro.au/onborrowedtime/docs/PCB_Ch09.pdf

[4] Map – National Biodiversity Strategy Review Task Group, “Australia’s Biodiversity Conservation Strategy 2010–2020”, Figure A10.1, p. 91, http://www.environment.gov.au/system/files/pages/50e1085f-1ef9-4b25-8275-08808133c346/files/biodiversity-conservation-strategy2010-2020.pdf. Other information derived from Russell, G. “The global food system and climate change – Part 1”, 9 Oct 2008, (http://bravenewclimate.com/2008/10/09/the-global-food-system-and-climate-change-part-i/),which utilised: Dept. of Sustainability, Environment, Water, Population and Communities, State of the Environment Report 2006, Indicator: LD-01 The proportion and area of native vegetation and changes over time, March 2009; and ABS, 4613.0 “Australia’s Environment: Issues and Trends”, Jan 2010; and ABS 1301.0 Australian Year Book 2008, since updated for 2009-10, 16.13 Area of crops.

[5] Roberts, G, “Campbell Newman’s LNP bulldozing pre-election promise”, The Australian, 1 June, 2013, http://www.theaustralian.com.au/national-affairs/campbell-newmans-lnp-bulldozing-pre-election-promise/story-fn59niix-1226654740183; http://sunshinecoastbirds.blogspot.com.au/2013/06/campbell-newman-takes-axe-to-queensland.html

[6] Queensland Department of Science, Information Technology, Innovation and the Arts. 2014. Land cover change in Queensland 2011–12: a Statewide Landcover and Trees Study (SLATS) report. DSITIA, Brisbane, Table 4, p. 28, https://www.qld.gov.au/environment/land/vegetation/mapping/slats-reports/

[7] Derived from Lindenmayer, D. and Burgman, M., op. cit.

[8] Woinarski, J., Traill, B., Booth, C., “The Modern Outback: Nature, people, and the future of remote Australia”, The Pew Charitable Trusts, October 2014, http://www.pewtrusts.org/en/research-and-analysis/reports/2014/10/the-modern-outback

[9] Barson, M., Mewett, J. and Paplinska, J. 2011 Land management practice trends in Australia’s grazing (beef cattle/sheep) industries. Caring for our Country Sustainable Practices fact sheet 2, Department of Agriculture, Fisheries and Forestry, Figure 1, p. 3, http://www.daff.gov.au/__data/assets/pdf_file/0009/2148714/national-factsheet-farm-practicesgrazing.pdf

[10] Hansen, J; Sato, M; Kharecha, P; Beerling, D; Berner, R; Masson-Delmotte, V; Pagani, M; Raymo, M; Royer, D.L.; and Zachos, J.C. “Target Atmospheric CO2: Where Should Humanity Aim?”, 2008. http://www.columbia.edu/~jeh1/2008/TargetCO2_20080407.pdf

[11] Stehfest, E, Bouwman, L, van Vuuren, DP, den Elzen, MGJ, Eickhout, B and Kabat, P, Climate benefits of changing diet Climatic Change, Volume 95, Numbers 1-2 (2009), 83-102, DOI: 10.1007/s10584-008-9534-6 (Also http://www.springerlink.com/content/053gx71816jq2648/)

[12] The Food and Agriculture Organization of the United Nations, “Livestock impacts on the environment”, Spotlight 2006, November 2006, http://www.fao.org/ag/magazine/0612sp1.htm

[13] J. Brodie, C. Christie, M. Devlin, D. Haynes, S. Morris, M. Ramsay, J. Waterhouse and H. Yorkston, “Catchment management and the Great Barrier Reef”, pp. 203 & 205, Water Science and Technology Vol 43 No 9 pp 203–211 © IWA Publishing 200, http://www-public.jcu.edu.au/public/groups/everyone/documents/journal_article/jcudev_015629.pdf

[14] Reef Water Quality Protection Plan, “Report Card 2012 and 2013″, June 2014, http://www.reefplan.qld.gov.au/measuring-success/report-cards/2012-2013-report-card.aspx

[15] Kroon, F., Turner, R., Smith, R., Warne, M., Hunter, H., Bartley, R., Wilkinson, S., Lewis, S., Waters, D., Caroll, C., 2013 “Scientific Consensus Statement: Sources of sediment, nutrients, pesticides and other pollutants in the Great Barrier Reef Catchment”, Ch. 4, p. 12, The State of Queensland, Reef Water Quality Protection Plan Secretariat, July, 2013, http://www.reefplan.qld.gov.au/about/scientific-consensus-statement/sources-of-pollutants.aspx

[16] Brodie, J., “Great Barrier Reef dying beneath its crown of thorns”, The Conversation, 16th April, 2012, http://theconversation.com/great-barrier-reef-dying-beneath-its-crown-of-thorns-6383

[17] Meyer, W., “Water for Food – The Continuing Debate”, Unpublished paper, CSIRO Land and Water,1997

[18] Meyer, W. “Water and meat producers”, Unpublished paper, Nov 2007 (updated Dec 2007 and Jun 2008)

[19] Brown, P and the Daily Climate, “Banks Put a Price on Earth’s Life Support“, Scientific American, 30 August, 2013, http://www.scientificamerican.com/article.cfm?id=banks-put-a-price-on-earths-life-support

[20] Australia’s Chief Scientist, Australian Government, “Which plants store more carbon in Australia: forests or grasses?”(undated), http://www.chiefscientist.gov.au/2009/12/which-plants-store-more-carbon-in-australia-forests-or-grasses/

[21] 3CR Freedom of Species “Gerard Wedderburn-BisshopThe environmental impacts of livestock farming”, 7th October, 2012, http://www.freedomofspecies.org/show/gerard-wedderburn-bisshop-environmental-impacts-livestock-farming

[22] Beyond Zero Emissions and Melbourne Sustainable Society Institute of The University of Melbourne, “Zero Carbon Australia – Land Use: Agriculture and Forestry – Discussion Paper”, October, 2014, p. 47-48, http://bze.org.au/landuse

[23] Various: Food & Agriculture Organization of the United Nations, FAOSTAT, Live animals, 2013, http://faostat.fao.org/site/573/DesktopDefault.aspx?PageID=573#ancor; Poole, R.M., “For Wildebeests, Danger Ahead”, Smithsonian Magazine, May, 2010, http://www.smithsonianmag.com/science-nature/for-wildebeests-danger-ahead-13930092/?no-ist; Estes, R., “Gnu, mammal”, 9-10-2014, Encyclopaedia Britannica, http://www.britannica.com/EBchecked/topic/236391/gnu; Sedghi, S., “Giraffe population decline has conservation groups ringing alarm bells”, ABC News, 5th December, 2014 (updated), http://www.abc.net.au/news/2014-12-04/alarm-raised-over-plummeting-giraffe-numbers/5940204; Schaul, J.C., “Safeguarding Giraffe Populations From Extinction in East Africa”, National Geographic, 17th June, 2014, http://voices.nationalgeographic.com/2014/06/17/safeguarding-giraffe-populations-from-extinction-in-east-africa/; The IUCN Red List of Threatened Species, 2014.3, Giraffa camelopardalis“, http://www.iucnredlist.org/details/9194/0; National Geographic, “Giraffe”, http://animals.nationalgeographic.com/animals/mammals/giraffe/ (accessed 18th April, 2015); Bradford, A., “Giraffe Facts and Photos”, Live Science, 28th October, 2014, http://www.livescience.com/27336-giraffes.html; USDA Weekly National Lamb Market Summary, 17th April, 2015, http://www.ams.usda.gov/mnreports/lswlamb.pdf; Palk, S., “Australia’s wild camel conundrum”, CNN, 15th October, 2010, http://edition.cnn.com/2010/WORLD/asiapcf/10/15/australia.feral.camels/; Bell, S., “Australia, home to the world’s largest camel herd”, 19th May, 2013, http://www.bbc.com/news/magazine-22522695

[24] Myhre, G., D. Shindell, F.-M. Bréon, W. Collins, J. Fuglestvedt, J. Huang, D. Koch, J.-F. Lamarque, D. Lee, B. Mendoza, T. Nakajima, A. Robock, G. Stephens, T. Takemura and H. Zhang, 2013: “Anthropogenic and Natural Radiative Forcing. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group 1 to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change” , Table 8.7, p. 714 [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, http://www.ipcc.ch/report/ar5/wg1/

[25] Shindell, D.T.; Faluvegi, G.; Koch, D.M.; Schmidt, G.A.; Unger, N.; Bauer, S.E. “Improved Attribution of Climate Forcing to Emissions”, Science, 30 October 2009; Vol. 326 no. 5953 pp. 716-718; DOI: 10.1126/science.1174760,  http://www.sciencemag.org/content/326/5953/716.figures-only

[26] Smith, K.R., “Carbon dioxide is not the only greenhouse gas”, ABC Environment, 25th January, 2010, http://www.abc.net.au/environment/articles/2010/01/25/2778345.htm; Smith, K.R., “Carbon on Steroids:The Untold Story of Methane, Climate, and Health”, Slide 67, 2007, http://www.arb.ca.gov/research/seminars/smith/smith.pdf

[27] NOAA Earth System Research Laboratory, “The NOAA Annual Greenhouse Gas Index (AGGI)”, Summer 2014, http://www.esrl.noaa.gov/gmd/aggi/aggi.html

[28] Government of Western Australia, Department of Agriculture and Food, “Upper secondary education resources”, https://www.agric.wa.gov.au/biosecurity-quarantine/upper-secondary-education-resources?page=0%2C1 (accessed 18th April, 2015)

Images

Young cattle and cow in farm © Sararoom | Dreamstime.com

Eating giraffe  © Pytyczech | Dreamstime.com Blue wildebeest © Davebrotherton | Dreamstime.com

Brahman Cow © Gualberto Becerra | Dreamstime.com

Methane molecule © Barbora Bartova | Dreamstime.com

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In October, 2014, the sustainability advocacy group Ceres reported findings from a climate risk disclosure survey conducted by insurance regulators in California, Connecticut, Minnesota, New York and Washington.

The survey covered 330 insurers operating in the US Property & Casualty (P&C), Life & Annuity, and Health sectors, representing around 87 percent of the nation’s insurance market in terms of premium volume. 193 of those responding were in the P&C sector, which is the sector I focus on in this post. Ceres released a similar report in 2012, involving 184 insurers in total.

In his foreword to the 2014 report, Washington’s Insurance Commissioner, Mike Kreidler, said that much of the insurance industry was still lagging on this issue, although the P&C sector was ahead of the others. He stated:

  • “As key regulators of this sector, we strongly encourage insurance industry leaders and investors who own these companies to take this challenge far more seriously. There is no doubt that an early effort to adjust policies, premiums and insurance investments will result in less dramatic impacts later on, thus avoiding and reducing losses that we can already anticipate.”

One of the factors considered in the 2014 survey was the insurers’ approach to enterprise-wide climate risk management, including: (a) examination of the geographic spread of property exposures in relation to expected climate change impacts; (b) consideration of climate risks with regard to liquidity and capital needs, terms and costs of catastrophe reinsurance; and (c) frequency of reassessing climate risk.

Amongst the P&C insurers, 72 percent were rated “minimal” or “beginning”, with 20 percent “developing”, and the remaining 8 percent “leading”.The “leading” insurers were: Allianz; CSAA; First National; Grinnell Mutual; Hartford Fire & Casualty; Munich Re; Nationwide; PEMCO Mutual; Sompo Japan; Swiss Re; Hannover; Tokio Marine; WR Berkley; XL Group; and Zurich US.

Ceres found more positive results in relation to the respondents’ approach toward climate change modelling and analytics. It reported that 26 percent of insurers were in the “leading” category, and 21 percent in the second tier (of four) “developing” group. Ceres stated:

  • “There are substantial benefits for insurers that effectively quantify risk exposure through the use of cat modelling. Ceres’ review of the survey results indicates that insurers that fully integrate catastrophe modelling into their risk management programs, through their underwriting and investment functions, are best positioned to both protect their businesses and capitalize on opportunities in a changing climate.”

The increasing use of modelling may contribute to more conservative premium rating and coverage offerings by insurers in future, as they seek to “protect their businesses” in an increasingly objective manner.

Ceres’ reporting framework had changed since its 2012 report, but there seems to have been little overall improvement since then. At that time (from its overall results): (a) almost all of the companies showed significant weakness in their preparedness to address the effects climate change may have on their business; (b) only 13 percent demonstrated a comprehensive climate change strategy; and (c) 48 percent viewed climate change as a potential future loss driver, even though scientific assessments from the UN’s Intergovernmental Panel on Climate Change (IPCC) and others emphasised that climate change was already amplifying extreme events that lead to insured losses.

However, as in 2014, the P&C sector in 2012 was ahead of the others:

  • “Property and Casualty (P&C) insurers . . . demonstrate far more advanced understanding of the theoretical risks that climate change poses to their business. P&C insurers also tend to be at a further stage of development in implementing the tools needed to manage climate change risks . . .”

A stark example of a senior insurance industry participant experiencing critical problems with climate change involved Belinda Hutchinson, former chair of Australia’s largest international insurer, QBE. In April 2011, following another summer of extreme events, she said:

  • “The catastrophe events that have taken place this year, the floods in Queensland, the fires, have nothing to do with climate change. They are part of Australia’s really long history of floods, fires, droughts.” 

She may have subsequently changed her views on the subject. In December, 2013, The Age newspaper reported (with my underline):

  • “QBE shareholders have taken a $4 billion hit this morning after the company announced a major profit downgrade and Belinda Hutchinson signalled her retirement from the insurance behemoth. . . QBE’s US division has been pummelled by problems in its crop, lenders placed property insurance and program businesses. The crop arm has been hit by the worst drought in over 50 years . . .”

Despite climate change’s serious potential impacts on the insurance industry, capacity is abundant for P&C and other business.

The situation has come about largely through pension funds and other institutional investors finding that post-GFC returns from the insurance industry compare favourably with those from other sectors of the economy. Hence, they are directing capital to the industry, adding to capacity and competition.

However, will the insurance mechanism be able to cope with a risk of this magnitude in the future? To the extent that the industry manages to do so, I can only envisage far more conservative premium terms and scope of coverage.

The presentation embedded in my December 2013 blog post “Risk Management, Insurance and the Climate Crisis” (also embedded below) included the following summarised comments from Dr Liam Phelan, currently of the University of Newcastle (Australia) (my underline):

  • “Insurance system responses are consistent with earlier international political economy perspective that reflects a linear understanding of the Earth system, whereas a non-linear understanding is required.” 
  • “Climate change undermines the basis of the insurance system, i.e. the capacity to pool and spread financial risk on the basis of known probabilities.  
  • “Strong and ecologically effective mitigation is the only viable basis for the insurance system to manage its medium and long-term climate risk.” 
  • “Anthropogenic climate change is by definition of our own making, and an accelerating catastrophe that will continue to impact humans and our societies. Unmitigated, anthropogenic climate change promises impacts that will be felt comprehensively, if unevenly, across all populations. The system that provides insurance, along with the rest of human activities, is vulnerable.” 
  • “. . . climate change can mean insurance for weather risks – including extreme events – shifts from affordable to barely affordable, and eventually the risks become uninsurable . . . insurance for weather risks operates as though past events are a reliable guide to future experience. This remains true as long as the Earth (including its climate) stays in its currently stable state, one that is familiar to humans through the course of human history. Human-caused climate change means shifting the state of Earth, perhaps comparatively suddenly, from its familiar state into an alternative – and perhaps radically different – state.”

A key problem is that insurers and others are relying on projections from the UN’s Intergovernmental Panel on Climate Change (IPCC) that are dangerously conservative, as they ignore critical feedback mechanisms in the climate system that accelerate the impacts.

However, even those projections indicate frightening global average temperature increases from pre-industrial times by 2100, ranging from +1.5°C to +4.9°C. Temperature increases at the poles are multiples of the global average, which is a factor contributing massively to the acceleration in warming and the non-linear nature of the impacts. It is likely that critical tipping points, leading to abrupt changes and potential runaway climate change, will be triggered (and many may have been already) by the time we reach +1.5°C.

Very credible sources are predicting much quicker developments than the IPCC. Here are some recent examples:

  • Distinguished Professor of Meteorology at Pennsylvania State University, Michael Mann, recently predicted in a Scientific American article that we will reach +2°C by around 2036.
  • A recent paper by Steven J Smith et al. in Nature Climate Change indicated a temperature increase of around +1°C over the coming forty years (and accelerating), in excess of the +0.85°C increase that has already occurred

Importantly, how do such increases translate in terms of extreme events?

A key aspect of higher temperatures is that they increase the amount of water vapour in the atmosphere. According to Dr. Kevin Trenberth, former head of the Climate Analysis Section of the National Center for Atmospheric Research, commenting on the increase over the past thirty years:

  • “It’s about a 4% extra amount, it invigorates the storms, it provides plenty of moisture for these storms and it’s unfortunate that the public is not associating these with the fact that this is one manifestation of climate change. And the prospects are that these kinds of things will only get bigger and worse in the future.”

Another example is the fact that the warmer temperatures at the poles are having an enormous impact on the icecaps on Greenland and Antarctica, accelerating sea level rise, as is thermal expansion of the oceans.

Sea level rise is not uniform across the globe. The former Australian Climate Commission (disbanded by the current government) reported that a 50 centimetre (19 inch) rise in sea level would increase the likelihood of major inundation events by a factor of between several hundred and a thousand.That means that an event that had been classed as “1 in 100 years” could be expected to occur almost monthly. Cities like Norfolk, Virginia and Miami, Florida, are extremely vulnerable.

Critically, according to Dr James Hansen, former head of climate science at NASA and regarded by many as the world’s leading climate scientist, at +2°C, most of the world’s coastal cities are likely to be uninhabitable.

To the extent that organisations consider investing or developing supply chains internationally, they need to be aware that the climate change risks vary considerably from one country to another. Global risk analytics firm, Verisk Maplecroft, has identified 32 “extreme risk” countries in its Climate Change Vulnerability Index, which evaluates the sensitivity of populations, the physical exposure of countries, and governmental capacity to adapt to climate change over the next 30 years. Those countries include the growth economies of Cambodia (12), India (13), Myanmar (19), Pakistan (24) and Mozambique (27).

Without emergency mitigation measures, the insurance industry and its clients will almost certainly witness catastrophic impacts of climate change, which may occur much sooner than many had assumed.

Author: Paul Mahony (also on Twitter, Scribd, Slideshare and Viva la Vegan)

References

Ceres, “Insurer Climate Risk Disclosure Survey Report & Scorecard: 2014 Findings & Recommendations”, https://www.ceres.org/resources/reports/insurer-climate-risk-disclosure-survey-report-scorecard-2014-findings-recommendations/view (accessed 18th April, 2015)

Ceres, “Insurer Climate Risk Disclosure Survey 2012”, http://www.ceres.org/resources/reports/naic-report/view (accessed 18th April, 2015)

Phelan, L., Macquarie University, “The relationship between anthropogenic climate change and the insurance system: Imperatives, options and reflections on theory”, 4 Aug 2010 (PhD Thesis);

Phelan, L., “Cuts in emissions are at a premium”, The Age, 25 Jan 2011, http://www.theage.com.au/it-pro/cuts-in-emissions-are-at-a-premium-20110124-1a2ul.html

Hutchens, G., “QBE blames La Nina for disasters”, Sydney Morning Herald, 20/04/11, http://www.smh.com.au/business/qbe-blames-la-nina-for-disasters-20110419-1dng1.html

Liew, R., QBE takes $4b hit on profit downgrade, chair’s exit“, The Age, 9th December, 2013, http://www.theage.com.au/business/banking-and-finance/qbe-takes-4b-hit-on-profit-downgrade-chairs-exit-20131209-2yzyi.html

Mahony, P., Risk Management, Insurance and the Climate Crisis“, 2nd December, 2013, Terrastendo.net, https://terrastendo.net/2013/12/02/risk-management-insurance-and-the-climate-crisis/

Mann, M.E.Earth Will Cross the Climate Danger Threshold by 2036“, Scientific American, 18th March, 2014, http://www.scientificamerican.com/article/earth-will-cross-the-climate-danger-threshold-by-2036/

Smith, S., Edmonds, J., Hartin, C.A., Mundra, A., Calvin, K., “Near-term acceleration in the rate of temperature change”, Nature Climate Change, 9th March, 2015, http://www.nature.com/nclimate/journal/vaop/ncurrent/full/nclimate2552.html

Science2.0, “James Hansen: To mitigate climate change, nuclear energy should be included”, 18th April, 2015, http://www.science20.com/news_articles/james_hansen_to_mitigate_climate_change_nuclear_energy_should_be_included-154923

Verisk Maplecroft, “Climate change and lack of food security multiply risks of conflict and civil unrest in 32 countries – Maplecroft:, https://maplecroft.com/portfolio/new-analysis/2014/10/29/climate-change-and-lack-food-security-multiply-risks-conflict-and-civil-unrest-32-countries-maplecroft/ (accessed 19th April, 2015)

Update 19th April, 2015: Comment on Dr James Hansen relating to a 2°C temperature increase added, and my December, 2013 presentation embedded (refer below).

Image: Lightning, night storm © Petr Mašek | Dreamstime.com

Presentation from 2013:

PDF (Downloadable)

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