Climate Change: Liability For The Past And The Future

The Stern Review (the Review) concluded that (i) carbon emissions have already pushed up global temperatures by half a degree Celsius; and (ii) if no action is taken on emissions, there is more than a 75 per cent chance of global temperatures rising between two and three degrees Celsius over the next 50 years and a more than 50 per cent chance of a rise by five degrees.

With the anticipated temperature increase, the Review predicts extreme weather patterns, an increased risk of flood, a decline in crop yields, rising sea levels (which could leave 200 million people permanently displaced) and up to 40 per cent of species could face extinction.

It remains to be seen whether these long term predictions come true. However, recent years have certainly seen a dramatic increase in windstorm and flood-related losses to the (re)insurance industry. Whilst such losses have had an impact on (re)insurance rates, the global economic impact is yet to be experienced. The Review predicts that global