Subject: Viridian Note 00022: The World Is Becoming Uninsurable, Part 2 Key concepts: Weather violence, insurance costs Attention Conservation Notice: Highly speculative; is over 1,600 words long; is still about insurance, which is still one of the dullest topics in the world Links: http://www.munichre.com/ Entries in the "Big Mike" Viridian Design Contest: http://www.pinknoiz.com/viridian/logos.html http://www.spaceways.de/BigMike/Mike.html http://weber.u.washington.edu/~r1ddl3r/bigmike.html http://powerbase-alpha.com/bigmike http://rampages.onramp.net/~jzero/ http://www.well.com/conf/mirrorshades http://www.57thstreet.com/viridian/ http://www.ioc.net/~bini/bigmike.htm http://www.pcnet.com/~thallad/mike.htm As we were stating earlier in Viridian Note 00021, the German insurance company "Munich Re" is in the business of assessing weather violence. I'll let The Times of London address some of MunichRe's financial conclusions: Source: The Times of London, November 9, 1998 "Climate disaster map pinpoints 'no-go' areas for insurers By Nick Nuttall, Environment Correspondent in Buenos Aires "Vast areas of the world are becoming uninsurable as global warming triggers devastating and costly rises in sea levels, as well as droughts, floods and increasingly violent storms. "Experts fear that some nations, especially those in the Caribbean, parts of Asia and the Pacific, face greater economic hardship. They believe insurance cover, vital for attracting inward investment to develop tourist resorts and protect homes and businesses, will become prohibitively high. In some areas it may disappear entirely as insurers protect themselves from multibillion- pound claims. "The increasing concern (...) has been heightened by the first map to pinpoint regions where natural and man- made climate change will hit hardest. "The climate disaster map, which is circulating among the world's major insurance firms, has been compiled by scientists and researchers at Munich Re, one of the world's largest re-insurance companies. "Dr Anselm Smolka, of Munich Re, said the map, which couples the impacts of climatic events caused by El Nino with those predicted to result from more atmospheric greenhouse gas concentrations, was plotted using information from the United Nations Intergovernmental Panel on Climate Change and centres such as the Max Planck Institute. "Dr Julian Salt, a disaster assessment expert with the Loss Prevention Council, which advises the Association of British Insurers, said yesterday that the new research was 'concentrating the minds' of insurers worldwide. "'It shows where there is increased risk on top of all the natural hazards. We are fast approaching the situation where some parts of the world are becoming uninsurable,' he said. The map shows where rising sea levels and more frequent storms may swamp islands in the Caribbean, Indian Ocean and the Pacific and where reductions in rainfall, such as over the grain-growing areas of the US, can be expected. (...) "Dr Salt said that publicly insurers will reject suggestions that insurance may be removed or premiums will rise. Privately, however, these 'politically charged' options are being considered, he said. "He said that in countries such as the Maldives, vulnerable to increased storms and rising sea levels, global warming could affect tourism, the primary industry. "Andrew Dlugolecki, a key member of a UN Environment Programmes insurers' initiative, said there was an urgent need for new, imaginative ways of covering vulnerable regions and nations. "'I am quite certain that there are some areas which will be unprotectable and may disappear. A major problem is brewing,' he said." ********** Bruce Sterling remarks: I hope the august Times will forgive me for quoting their remarkable article at some length. We Viridians need not be overly concerned as to exactly how many billions of dollars are "lost." Financial projections are very soft and elastic, basically irrelevant to our interests. Furthermore, we don't know how quickly the seas will rise. Nobody does. Viridian central interests are different: what does this mean, and how will it feel? How will this experience change the twentieth century's outdated vision of human life on Earth? It would presumably help to have a good long look at the disaster maps. Since they are designed for insurance agents, they are almost certain to be ugly graphic disasters, but I've ordered one anyway. I'm eager for a personal view. For those who would like to join me, here is a Teutonically thorough price list, direct from Munich Re. "If you are interested in our publication 'World Map of Natural Hazards' we can provide you several products: "Special publication with catastrophe catalogue and folding map, Price DM 20 "Wall map (122 cm x 86 cm) with special publication, Price DM 50 "Globe of Natural Hazards (diameter 33 cm), plexiglass stand Price DM 250" Munich Reinsurance Company Geoscience Research Group (REF/Geo) 107 Koeniginstrasse, Munich, Germany D-80791 Munich Tel.: +49-89-3891-5292 Fax 1: +49-89-3891-75292 Fax 2: +49-89-3891-5696 (central) URL: http://www.MunichRe.com This plexiglass globe sounds like an especial Viridian darling. Imagine being the first on your block to impress your friends with your very own Unnatural Hazards Sphere! Let's try to understand how citizens of the 21st century will regard their situation, once they have been disabused of the 20th century's shibboleths. First, unlike us, they will fully and bluntly recognize that large areas of the planet are, in fact, uninsurable. They're either flooding incessantly from weather violence, or gently slipping underwater due to rising seas. Once this phenomenon is well under way, it will become a classic King Canute situation: a stark fact utterly impossible to disguise or talk away, no matter how many courtiers and spin doctors may stand behind the throne. Similarly, no amount of UN-mandated "new, imaginative ways of covering vulnerable regions and nations" is going to conjure away rising seawater. We might somehow jury- rig the insurance system to camouflage the depredations of the Greenhouse Effect. This is "perverse subsidy," and can only intensify losses in the long run. This is by no means a solution; it's akin to powdering over the little red veins of alcoholism so you can cruise the bars. Basically, the free market is telling us something very interesting in this MunichRe report. The free market is informing us that certain parts of the planet will no longer support free market activities. This planet is becoming unfit for investment. The market is too good for this world. Let's examine one scenario in some detail. Long before the waters seep in, the imperilled lands will be left to a subtle form of economic wreckage. It will no longer be financially possible for legitimate industries and governments to set up business there. But this doesn't mean these damp, dodgy areas will lack people. A good modern-day analog might be tidal- water Bangladesh. Flooding in Bangladesh in the 1970s produced a huge compassionate response; far worse flooding in 1998 produced a page-three status well behind the plight of China and Central America. They don't get much insurance in Bangladesh. No one will give them any. Nor do they get G-7 style development investment. They're there anyway. They are staying there. In this Bangladesh scenario, vast, swampy slums spread worldwide. They are monster ghettos and favelas, unspeakably septic, high-crime, squatter metropolises, created off-the-books. Some are old, abandoned seaside areas newly occupied by the poor and the disaffected; others are new, built from castoffs and driftwood. Since these marginal areas have no insurance and are periodically drenched, they lack street signs, plumbing, zoning, quarantines, health services, properly financed fire and police forces, and all the other blessings of proper urban organization. Interestingly, they are by no means restricted to the Third World. They can spring up on any continental margin where insurance has fled. Offshore barrier islands for instance; or half-wrecked seaside retirement communities; or the mildewed mansions of Martha's Vineyard. Many island governments become governments-in-exile. The people of Mauritius, Maldives and so on all stumble, as a climatic diaspora, through the 21st century. Without any false hope of a return to their drowned Jerusalem, they remain "nations" because no one wants to officially assimilate their refugee populations. So, in a nightmare of the Twilight of Sovereignty, they still clutch their ludicrous currencies, and their hand-me-down seat at the U.N. They still possess citizens, and constitutions, and flags, and their many solemn treaties and multilateral security arrangements, maybe even their national airline. They have bank accounts, maybe some Kyoto-style conscience money. But they have no homeland. They live in camps and on damp pilings. They have become The Uninsurable. I have my doubts about this scenario == not because it's implausible to me, but because it's *too* plausible. In many ways, this damp, cobbled-together, outlaw slum is the gold standard of the postmodern urban vision. It's perversely attractive to us, it gratifies a fin-de-siecle sensibility. It has a driftwood-Gothic charm, an I-told- you-so quality; it's a penance regime, full of nemesis and comeuppance. Postmodernity loves to dwell in the dishonored bones of the dead Modernist project. We prefer almost any humiliation to the severe mental challenge of building a new and original order all our own. In some strange sense, wrecked cities made of washed-up scrap are clearly what we *want.* The Burning Man festival looks rather like this; a dense, enthusiastic cluster of termite anarchists, drifting someplace, patching together their own little world, for an orgiastic three-day weekend. This scenario borrows the highly popular set design from Blade Runner and Mad Max. We twentieth-century types would all know how to behave there; we'd be trading our black leather jackets for black-market gasoline without ever missing a beat. People who were native-born in that situation would have very different feelings about it. Our next Note will try to envision the situation anew. Bruce Sterling (bruces@well.com)