Tag Archives: Denmark

Rising floods threaten Danish financial system

Stormier seas and more frequent floods can cause havoc anywhere. The Danish financial system is now growing apprehensive.

LONDON, 16 June, 2021 − Flooding caused by storm surges and general changes in climate give rise to misery around the world, destroying homes and livelihoods and forcing the migration of hundreds of thousands of people. The financial impact of floods can also impose severe economic strains, and not just in the developing world: the Danish financial system now fears growing losses to come.

Denmark is a relatively small country but has a long coastline, stretching for more than 8,000 kilometres.

As part of a series of reports on the impacts of climate change, Danmarks NationalBank, the country’s central bank, warns that billions of dollars have been loaned to householders and businesses located in coastal and other flood-prone areas.

Flood damage could make recouping many of these loans extremely difficult; credit institutions with substantial exposure to such loans could go out of business. The integrity of the financial system might be threatened.

“Climate change is leading to increased recurrence and severity of flooding from storm surges”

“Exposures of 41 billion krone (US$7billion) are currently located in areas already at risk of flooding”, says the central bank.

“This amount will increase to DKK198 billion (US$32 billion) over the next 50-80 years in the most extreme climate scenario…this implies that the risk could constitute a risk for individual credit institutions as well as the financial system.”

The central bank’s report says the occurrence of floods round the country is increasing, with more than 40 flooding events caused by storm surges happening in the 1991 to 2017 period.

“Climate change is leading to increased recurrence and severity of flooding from storm surges, and the effect from storm surges is further exacerbated by sea level rises,” says the report.

Losses passed on

Areas of the country most exposed to flooding include the area round Copenhagen, the capital, the west coast, and Jutland in the north.

Initially, says the bank, homeowners and businesses with premises located in flood-prone areas will bear the financial costs of flood damage.

“However, the loss can ultimately affect credit institutions…value depreciation has a direct effect on homeowners and can be transmitted to credit institutions if the real estate has been pledged as collateral for the loan.”

Central banks around the world are issuing increasingly strident warnings to banks and other credit institutions about the challenges posed by climate change.

Warned off

In many instances insurance companies and other financial institutions are being told to put aside a portion of their earnings in order to cope with the increased costs climate change will bring.

Investors are being warned that putting money into fossil fuel companies and related enterprises is an increasingly risky business.

Fossil fuel companies are also being told to revise their accounts to take into consideration so-called “stranded assets” – corporate fossil fuel holdings made essentially worthless due to the looming climate catastrophe and the growth of regulation forbidding their exploitation.

As a result, many billions of dollars have been written off the value of what were, till a few years ago, some of the world’s biggest and most financially powerful companies. Climate News Network

Stormier seas and more frequent floods can cause havoc anywhere. The Danish financial system is now growing apprehensive.

LONDON, 16 June, 2021 − Flooding caused by storm surges and general changes in climate give rise to misery around the world, destroying homes and livelihoods and forcing the migration of hundreds of thousands of people. The financial impact of floods can also impose severe economic strains, and not just in the developing world: the Danish financial system now fears growing losses to come.

Denmark is a relatively small country but has a long coastline, stretching for more than 8,000 kilometres.

As part of a series of reports on the impacts of climate change, Danmarks NationalBank, the country’s central bank, warns that billions of dollars have been loaned to householders and businesses located in coastal and other flood-prone areas.

Flood damage could make recouping many of these loans extremely difficult; credit institutions with substantial exposure to such loans could go out of business. The integrity of the financial system might be threatened.

“Climate change is leading to increased recurrence and severity of flooding from storm surges”

“Exposures of 41 billion krone (US$7billion) are currently located in areas already at risk of flooding”, says the central bank.

“This amount will increase to DKK198 billion (US$32 billion) over the next 50-80 years in the most extreme climate scenario…this implies that the risk could constitute a risk for individual credit institutions as well as the financial system.”

The central bank’s report says the occurrence of floods round the country is increasing, with more than 40 flooding events caused by storm surges happening in the 1991 to 2017 period.

“Climate change is leading to increased recurrence and severity of flooding from storm surges, and the effect from storm surges is further exacerbated by sea level rises,” says the report.

Losses passed on

Areas of the country most exposed to flooding include the area round Copenhagen, the capital, the west coast, and Jutland in the north.

Initially, says the bank, homeowners and businesses with premises located in flood-prone areas will bear the financial costs of flood damage.

“However, the loss can ultimately affect credit institutions…value depreciation has a direct effect on homeowners and can be transmitted to credit institutions if the real estate has been pledged as collateral for the loan.”

Central banks around the world are issuing increasingly strident warnings to banks and other credit institutions about the challenges posed by climate change.

Warned off

In many instances insurance companies and other financial institutions are being told to put aside a portion of their earnings in order to cope with the increased costs climate change will bring.

Investors are being warned that putting money into fossil fuel companies and related enterprises is an increasingly risky business.

Fossil fuel companies are also being told to revise their accounts to take into consideration so-called “stranded assets” – corporate fossil fuel holdings made essentially worthless due to the looming climate catastrophe and the growth of regulation forbidding their exploitation.

As a result, many billions of dollars have been written off the value of what were, till a few years ago, some of the world’s biggest and most financially powerful companies. Climate News Network

Parts of Europe heating faster than global average

FOR IMMEDIATE RELEASE Climate change hits different regions in different ways and, as Europe’s climate warms, some areas are already having to adapt.  New crops are being planted and there’s a call for buildings that don’t overheat in warm weather. LONDON, 12 September – Temperatures in some parts of Europe have already increased by more than 2C in the last 60 years with changes in local climate allowing new crops to be grown. An example is the new wine growing area in southern England, which this year is celebrating its best ever grape harvest. Hundreds of acres of new vineyards are being planted to take advantage of the changing climate. Many parts of Europe are experiencing more hotter days in the summer and fewer very cold nights in winter. Overall the increase is four times greater than the global average over the 60 year period. Researchers at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, in collaboration with the University of Warwick, show that not all regions are warming at the same pace. The results of their research, which appear in a study in the journal, Environmental Research Letters, indicate that the hottest 5% of days in summer have warmed fastest in a band from southern England and northern France to Denmark. In eastern Spain and central Italy there has been a general warming in all seasons. In some areas, Norway and Sweden for example, the changes have been much smaller in summer and in some cases there have been no measurable differences. However nights in the depths of winter have been getting warmer – by more than 2C in both countries. Professor Sandra Chapman, one of the researchers, said: “It is common to discuss climate change in terms of changes in global average temperatures but these can be far from people’s perceptions of climate change. The results in this paper begin to provide a picture of how local climate has been changing across Europe. It is a picture which is closer to that experienced by individuals.” Among other results the study notes changes in the frequency of nights that fall below freezing in winter, and days which rise above 28C in summer. These, says the study, are two thresholds that are important for many impacts such as the availability of snow in ski resorts, building design, and labour productivity. Dr. David Stainforth, the lead author of the report, said: “Climate is fundamentally the distributions of weather. Our results illustrate that the international goal of limiting the increase in global average temperature to 2°C would involve far greater changes for some places and for some aspects of climate, and therefore for particular individuals, communities and industries. “Changes in local climate pose challenges for decision makers across society not just when preparing for the climate of the future but even when planning for the climate of today. “We need to design buildings so that they don’t overheat, decide which are the best crops to plant, and even plan for variations in large scale productivity. These would all benefit from knowledge of how the climate distribution has changed at particular locations. This work begins to provide such information.” The World Meteorological Organisation and many national organisations, such as the UK Met Office, are investing substantially in the provision of information for governments and businesses to help them to adapt to climate change. The study shows that even over relatively small areas the differences can be quite marked. For example, in the north east of England the number of night frosts in winter has gone down by more than 10%, a greater drop than elsewhere in the country. – Climate News Network

FOR IMMEDIATE RELEASE Climate change hits different regions in different ways and, as Europe’s climate warms, some areas are already having to adapt.  New crops are being planted and there’s a call for buildings that don’t overheat in warm weather. LONDON, 12 September – Temperatures in some parts of Europe have already increased by more than 2C in the last 60 years with changes in local climate allowing new crops to be grown. An example is the new wine growing area in southern England, which this year is celebrating its best ever grape harvest. Hundreds of acres of new vineyards are being planted to take advantage of the changing climate. Many parts of Europe are experiencing more hotter days in the summer and fewer very cold nights in winter. Overall the increase is four times greater than the global average over the 60 year period. Researchers at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, in collaboration with the University of Warwick, show that not all regions are warming at the same pace. The results of their research, which appear in a study in the journal, Environmental Research Letters, indicate that the hottest 5% of days in summer have warmed fastest in a band from southern England and northern France to Denmark. In eastern Spain and central Italy there has been a general warming in all seasons. In some areas, Norway and Sweden for example, the changes have been much smaller in summer and in some cases there have been no measurable differences. However nights in the depths of winter have been getting warmer – by more than 2C in both countries. Professor Sandra Chapman, one of the researchers, said: “It is common to discuss climate change in terms of changes in global average temperatures but these can be far from people’s perceptions of climate change. The results in this paper begin to provide a picture of how local climate has been changing across Europe. It is a picture which is closer to that experienced by individuals.” Among other results the study notes changes in the frequency of nights that fall below freezing in winter, and days which rise above 28C in summer. These, says the study, are two thresholds that are important for many impacts such as the availability of snow in ski resorts, building design, and labour productivity. Dr. David Stainforth, the lead author of the report, said: “Climate is fundamentally the distributions of weather. Our results illustrate that the international goal of limiting the increase in global average temperature to 2°C would involve far greater changes for some places and for some aspects of climate, and therefore for particular individuals, communities and industries. “Changes in local climate pose challenges for decision makers across society not just when preparing for the climate of the future but even when planning for the climate of today. “We need to design buildings so that they don’t overheat, decide which are the best crops to plant, and even plan for variations in large scale productivity. These would all benefit from knowledge of how the climate distribution has changed at particular locations. This work begins to provide such information.” The World Meteorological Organisation and many national organisations, such as the UK Met Office, are investing substantially in the provision of information for governments and businesses to help them to adapt to climate change. The study shows that even over relatively small areas the differences can be quite marked. For example, in the north east of England the number of night frosts in winter has gone down by more than 10%, a greater drop than elsewhere in the country. – Climate News Network