The emerging El Niño could cause wind drought in North America, which would have a significant effect on renewable energy production in the region, says a new report launched today by WTW, a leading global advisory, broking, and solutions company.
Natural Catastrophe Review (Jan – June 2023) launched by WTW provides in-depth analysis of catastrophe risk by leveraging collaborations with research institutions.
The review also highlights how different 2023 has been to date with five category five storms in the first five months. This year’s combination of El Niño and exceptional Atlantic warmth is expected to have significant impact on weather patterns and temperatures across the globe.
The review outlines key perils which need to be monitored as well as exploring the reasons why those natural catastrophes turned into a natural disaster, going beyond the severity of the event, and incorporating insights into exposure and vulnerabilities of the regions affected. The report also delves into the science behind those events and provides insights on what to watch for in the second half of the year.
Key findings include:
- As the world warms, we continue to see natural disasters, such as the unprecedented Canadian wildfires that began in May and have burned over 11 million hectares to date.
- Human activities, such as land use, often exacerbate the impacts of natural disasters as we saw this year with the floods in New Zealand and Italy, and wildfires in Chile.
- Awareness needs to be raised about potential socio-economic tipping points, where gradual climate change leads to sudden socio-economic shifts such as the collapse of property prices.
- During an El Niño event, the atmosphere absorbs more heat while the ocean takes up less, and so two to three months after the event begins, global surface temperatures increase.
- For three years in a row, Earth’s largest ocean has been stuck in its La Niña configuration. Should the Pacific flip to El Niño, businesses should prepare for record-high temperatures, unusual weather, and slower economic growth.
Helene Galy, Managing Director of the WTW Research Network, said “Our direct links and close collaboration with the scientific community through the WTW Research Network enables us to provide deeper insights into key natural catastrophes as well as lessons learned. When quantifying natural catastrophe risk, it is crucial to incorporate in-depth scientific analysis in our modelling. As we are seeing with the current wildfires and extreme weather across Europe, China and North America, the business impact of these disasters means it is crucial that risk managers understand their potential consequences, as well as learning lessons from previous events and the value and limits of seasonal forecasting. We are delighted to be introducing this latest bi-annual scientific review to help our clients understand and mitigate natural catastrophe risks.”