News & Blog
New York City’s claim is paving the way to an enormous black hole in the share value of 5 Big Oil (and other oil companies too). The staggering sums scoping the size of their potential liability from climate-related claims is a warning to asset managers and pension fund administrators. The 5 Big Oil companies should identify this potential liability as Value at Risk (VaR) in their annual reports: failure to do so could be seen by shareholders as a lack of transparency.
In 2015 a report “Small City, Regional and Global Predictions for 2015, 2016 and 2017” was sealed and lodged by Predict Ability (PAL) in the safe of a legal firm. The report was generated programmatically, using PAL’s proprietary prediction technology: this machine-generated report was designed to identify qualifying ‘disaster events’ predicted to occur within specified time and distance windows. Once the reporting period had passed, a verification of PAL’s predictions, compared to the GLIDE online database confirmed an accuracy approaching 90% of those vulnerable cities pinpointed by PAL’s program.
An estimated $19billion will be needed to fund the infrastructure to protect New York City from storm surges such as 2012’s Super Storm Sandy, that are bound to come again and come more frequently. Mayor de Blasio’s primary claim against 5 Big Oil (BP, ExxonMobil, Chevron, ConocoPhillips and Royal Dutch Shell) implies – correctly – that 11% of extreme weather-related losses to the City are attributable to the climate changing emissions of their oil and gas products. If successful, such a claim might result in between $1.4billion and $6.2billion in damages – crucially dependent on the date upon which the…
This new case study shows how PAL’s Carbon Value at Risk (VaR) metric is used to determine the extent of carbon liability risk – the potential cost of damage attributable to carbon emission related anthropogenic (manmade) climate change. For users of biomass as a fuel source such as Drax power station, it highlights a potential $23bn ‘black hole’ between the expected loss and damage caused by carbon dioxide emissions over the next 25 years ($33bn) and equivalent loss and damage where biomass emissions are excluded ($10bn).
Global warming, caused by CO2 emissions released into the atmosphere by burning fossil fuels, currently costs global GDP a staggering $1 trillion in damages p.a. Small wonder the UN, IMF and World Bank have all called for a carbon price: policy makers in government and corporations urgently need this price so they can account for the true cost to humanity of their decisions, activities and investments. Way ahead of the curve, PAL is the ONLY company in the world to have scientifically determined the true carbon price, based on the loss and damage caused by extreme weather events attributable…
An algorithm-based calculation of the economic damage from climate change compares well with a study led by Prof. Solomon Hsiang of the University of California at Berkeley.
Manmade climate change is a global problem that requires a global solution. Proposed here is a fair and sustainable Universal Carbon Tax whereby all countries pay a carbon tax that dynamically factors in: Historic, current and future carbon emissions The differences between developing and developed economies A scientifically defendable carbon price, based on loss and damage Unlike existing schemes and frameworks, it is independent of: Political diktat Market forces Future energy usage patterns making it demonstrably fair to citizens worldwide. The following figure from Predict Ability Ltd gives a simplified illustration of how it works: The vertical axis shows a…
PAL announces Climate Risk Index (CRIX) data for August 2017 is now available. August CRIX is 1,185.36, up 0.4% on the previous month. The index is down 6.7% on the same period last year, and it’s 1,273 all-time high in September 2016. Published at the beginning of each month, the PAL Climate Risk Index (CRIX) provides a measure of the financial loss and damage arising from anthropogenic climate change. It utilises worldwide insurance loss data arising from extreme weather events (meteorological, hydrological, climatological). Dating back to January 1980, historical index values have been produced by the PALgamma catastrophe risk system and…
PAL announces Carbon Loss Index (CLIX) data for August 2017 is now available. August CLIX is valued at $16.47 per tonne CO2, down 1.2% since July. The index is 11.5% down on the same period last year. Published each month, the PAL Carbon Loss Index (CLIX) provides a benchmark for carbon pricing by quantifying the global financial loss and damage arising from carbon emissions. Dating back to January 1980, historical CLIX index values have been produced by the PALcarbon pricing system and are based on the Reinsurance Event Attributed Carbon Tax (REACT) methodology. Request the full report…
PAL announces Climate Risk Index (CRIX) data for July 2017 is now available. July CRIX is 1,180.59, up 0.7% on the previous month. The index is 6.3% lower than the same period last year, and is some 7.3% off the 1,273 all-time high back in September 2016. Published at the beginning of each month, the PAL Climate Risk Index (CRIX) provides a measure of the financial loss and damage arising from anthropogenic climate change. It utilises worldwide insurance loss data arising from extreme weather events (meteorological, hydrological, climatological). Dating back to January 1980, historical index values have been produced…