El Niño, Climate Catastrophe, and the Coming Financial Showdown

Pablo Berrutti is founder and managing director of Altiorem, a sustainable finance library, and a strategic advisor with a background in the integration of artificial intelligence, measuring the impact of climate change and its impact on business.

This includes banks and insurance companies and their awkward relationships with factoring in the challenges of climate change and confronting their responsibilities, which have recently been sorely tested by the arrival of a super-charged El Niño weather phenomena.

In recent weeks the glacial collapse in Nepal, wildfires in Indonesia, the haze, droughts, and typhoons across East Asia have taken horrible toll on human life and racked up damage bills that will be measured in the tens of billions of dollars.

Governments and financial institutions were warned. The potential for this year’s El Niño was first raised in May and formally announced on June 16. The World Meteorological Organization says the current conditions are expected to last until February.

But Berrutti told The Diplomat’s Luke Hunt that wealthy countries like Australia had spent very little on preparation and building in resilience into assets. Instead, about 95 percent of disaster funds went to recovery.

“Whereas other countries, sadly, who aren’t as wealthy as Australia, a lot of Southeast Asian countries, clearly aren’t in a position to be able to build that resilience to these types of events,” he said.

He added that it’s not only the big events that made headlines for causing destruction and loss of life that matter, but also the chronic effects of extreme heat. More than 30,000 people had died this year from back-to-back European heatwaves.

“It’s also an economic productivity perspective or a human health perspective, the knock on effects from fires and what that means from a lung disease and heart disease perspective,” Berrutti said.