The Colorado State University Center for Tropical Weather and Climate Research will issue its first forecasts for the 2024 Atlantic Basin hurricane season on April 4 at 10am EDT.  Elsewhere, in Sarasota, Florida, the recently formed Climate Adaptation Center is hosting a conference to launch seasonal forecast on April 4th as well.  Most climate scientists expect to see a very active hurricane season along the Atlantic coast in 2024.*    

To set the context, the incidence of $1billion+ climate related disasters have increased significantly over time (inflation adjusted) and 2023 logged in the highest number of events for the last 10-year period.  Going back further, the annual average from 1980-2023 was 8.5 events; the number from 2019-2023 was 20.4 while 2023 had 28 $1billion events.  Climate.gov publishes an annual billion dollar report here. The Fifth U.S. National Climate Assessment provides additional data along with highlighting state and local mitigation and adaptation efforts (Figure 1.1) here.  Interestingly, local governments in Arkansas, Florida and California engaged in greater mitigation actions than their states.

Costly damage from more intense and frequent storms, heat, wildfires, tornados and floods are leading insurance companies to reconsider their coverages and increase the cost of policies.  Insurance companies, which employ expert meteorologists to help identify and quantify the risk of claims are pulling out of areas they deem too risky.  Financial regulators too, are taking note of the destructive consequences of climate change on companies, governments and individuals and changing disclosure rules.

Driving the expectation of greater hurricane activity this summer, is an observed weakening of “El Nino” characteristics, which, in 2023, intensified storm activity in the Pacific region but produced cooler than usual weather in Florida.  Now there are strengthening “La Nina” characteristics in the Atlantic Ocean basin including elevated sea surface temperature (SST) coupled with cooling surface temperatures in the Pacific.   The National Center for Environmental Prediction (NCEP) at the National Weather Service issued an advisory in March that a “La Nina” event is likely to occur this summer along the Atlantic coast.  Bloomberg.com also offered explanation of El Nino’s global impact on both global GDP and inflation here.

South Florida station WLRN has some good graphics explaining the jet stream effects of El Nino and La Nina.  WLRN’s bar chart also shows the weather service’s estimate of the shift into La Nina by month.  The National Weather Service has more discussion about the shift from El Nino to La Nina here.  

Overall, last summer was the hottest on record globally. The National Oceanic and Atmospheric Administration (NOAA) “predicts a 99-percent probability that 2024 will also rate among the top five hottest years.”  (Post and Courier, March 11, 2024, see article here)   Heat from surface water tends to strengthen the power of hurricanes as they move across the ocean.  A strong wind shear can put on the brakes on the speed of a hurricane’s movement (and dust storms from Saharan Africa can also break up a hurricane in some seasons).  Typically, hurricanes lose power when they reach land.  However, a lower category hurricane does not necessarily indicate the degree of damage that will occur on land.  Recent storms have stalled in their movement on land, dropping devastating volumes of water.    

For example, Hurricane Florence dropped nearly two feet of water on South Carolina in 2018.  Florence started off over the ocean as a Category 4-5 storm with 130mph winds, but strong wind shear weakened it to a Category 1 storm as it moved over land.  Flooding in Vermont in 2023 surpassed Hurricane Irene, despite its categorization as “only” a tropical storm.  Parts of the state’s capital, Montpelier, were virtually submerged in water at that time.  Numerous roads and bridges were damaged. 

Researchers are studying other factors that are producing disastrous floods.  Dev Niyogi, professor at UT Austin, suggested that the damage and flooding from Florence diverged from what’s typically expected from a low category storm.  (See the Post and Courier article.)  He is studying what’s called the “brown earth effect” which means that saturated and muddy land can provide additional fuel for tropical systems, giving them longer life. (For the technically inclined, Niyogi’s paper can be found here.) J. Marshall Shepherd, director of the University of Georgia’s Atmospheric Sciences Program told the Post and Courier that relying on the “Saffir-Simpson scale for hurricanes is flawed”.  The Saffir-Simpson scale relates to wind hazard and uses the more familiar Categories 1-5.

Insurance and Financial Regulator Reactions

Consider the following:

  • Bankrate reported in detail about rising costs of home and auto insurance due to extreme weather frequency.  They report that 57 percent of Americans “state that they have incurred costs due to an extreme weather event in the past 10 years.”  You can find greater detail here. 
  • The Securities and Exchange Commission released final climate change and carbon emissions disclosure rules for public companies and public offerings on March 6, 2024.  See release here. 
  • Federal Reserve chair Jerome Powell stated in his recent testimony before congress, “Insurance of various different kinds – housing insurance, but also automobile insurance and things like that – that’s been a significant source of inflation over the last few years.” See report on his testimony here. 
  • At the end of February, Florida Governor Ron DeSantis declared that Citizens Property Insurance is insolvent.  “Citizens” is considered a political subdivision of the state of Florida. At inception it was intended to provide a backstop for residents in the state – an insurer of last resort. As some private insurers stopped writing policies in Florida, Citizens’ policy count has grown.  In response to the governor’s comments, Citizens’ leadership pushed back with their own interpretation, here. Very briefly, the program is structured with reinsurance for Citizens itself as well as the right to levy surcharges and assessments on policyholders and all Florida insurance consumers.  These features should be sufficient to provide funds in case of a major storm season. However, residents in non-coastal areas grumble about paying additional assessments and the Senate convened hearings to determine whether the governor might be seeking a bailout. 
  • The Joint Economic Committee issued this report in December, 2023, detailing how climate risks are destabilizing insurance markets and individuals’ financial well-being. 
  • Dave Jones, who was California’s state insurance commissioner eight years ago became concerned that insurers were not appropriately considering risks to their portfolios.  As he described to Andrea Riquier at ImpactAlpha, research by Carbon Tracker has been worrying him that insurers’ portfolio values could drop more than expected.  Her article: “Dave Jones on our march ‘toward an uninsurable future’” can be found here (requires free sign-up). His views invoked threats from a dozen state attorneys general according to Riquier. 
  • The First Street Foundation released its “9th National Risk Assessment, the Insurance Issue” on September 20, 2023 and can be found here. The report includes a wide range of detailed information about changing insurance industry and could be useful for investors.  In the report, First Street explains their models for calculating potential loss in property values as costs for insurance and repairs grow steeper.
  • The next generation are worried about climate and the impact of severe weather events on their lives and future.  While most lawsuits have been dismissed, a number of young activists are using the courts to highlight the risks and harms they expect to face in the future. 
    • In 2015, 21 young adults filed a suit against the US government for its “poor environmental laws” that are depriving the complainants along with more than 70 million young Americans of life, liberty, and property.  (See Time Magazine article, January 24, 2024, “Climate Gets Its Day in Court”).  The US government filed a motion to stay proceedings while the Ninth Circuit Court of Appeals considers the request to dismiss the case.  The stay motion was denied (see discussion here) 
    • In 2020, 16 young people filed a suit against the State of Montana (Held v. State) claiming that the state was violating their state constitutional right to a clean and healthful environment.  The list of filings includes discussion that the “Climate Change Exception” to the Montana Environmental Policy Act violates the state constitution and the public trust doctrine.  You can read greater detail here.   
    • The Columbia Law School, which houses the Sabin Center for Climate Change Law provides two databases – U.S. and global – information about various cases – which can be found here. A quick, key word search for “youth” turns up 14 cases from 2010-2023.

Often, authors writing about climate disasters note a greater impact on poor communities, communities of color, women, people with disabilities and other marginalized groups (see Morning Edition’s discussion of the most recent National Climate Assessment).  The unequal impact of climate change on these communities has been well documented but there is limited discussion, if any, of the co-dependencies up and down the wealth ladder.  While one’s house may be fortified with special windows and roofs, what about your son’s teacher or day care worker?  Or waiters at your favorite local restaurant? Or delivery drivers that serve your e-commerce lifestyle?  Or granny’s home health aide?  Will roadways be travel-worthy for these various service people to get to their jobs?  It is worth considering your personal supply chain and how those you depend upon might be affected by severe weather. 

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*It is important to note that initial seasonal forecasts can be quite inaccurate, but as the season progresses, these groups update their forecasts.  It’s also important to note that probabilities don’t destroy property – rather, one serious storm that visits your neighborhood could cause major damage. Finally, a disclaimer: the author of this commentary is not a meteorologist.