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Economy

The Rising Costs of Natural Catastrophes

On insurance and extreme weather, Nissan’s new business plan, and paint that cools

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The Rising Costs of Natural Catastrophes
Heatmap Illustration/Getty Images

Current conditions: A cloud of Saharan dust is sweeping toward southern Europe • Malaysia’s oppressive heat wave could last through mid-April • The water temperature is about 48 degrees Fahrenheit in Baltimore Harbor, where rescuers are searching for survivors after the collapse of the Francis Scott Key Bridge.

THE TOP FIVE

1. Soaring losses from natural disasters ‘a new norm,’ says insurance giant

Extremely costly natural disasters have become “a new norm,” and insured losses will double in 10 years due to climate change, according to one of the world’s largest reinsurers. In a report published today, Swiss Re, a firm that provides insurance for insurers, calculated that natural disasters resulted in insured losses of $108 billion in 2023, marking the fourth consecutive year of losses exceeding $100 billion. As Bloomberg noted, “only about 40% of economic losses globally are insured, meaning the total economic losses are much higher.”

The main reason losses were so high was the sheer frequency with which “medium severity” disasters occurred. These are events that cost between $1 billion and $5 billion, and they’re on the rise. Severe thunderstorms (also called severe convective storms, or SCS) have become “the second largest loss-making peril” behind tropical cyclones. The Midwest accounted for the highest percentage of insured losses from severe thunderstorms in the U.S. last year:

Swiss Re

The report calls for adaptation measures, but concludes that “in the face of climate change, adaptation and insurance can only go so far. Mitigation of greenhouse gas emissions is also essential to counter the build-up of physical risks.”

2. Nissan outlines plan to slash EV manufacturing costs

Nissan yesterday announced a new business plan it hopes will “ensure sustainable growth and profitability” as it faces competition from Chinese rivals. Perhaps unsurprisingly, the strategy leans heavily on electric vehicles. The Japanese carmaker will launch 16 new EV models over the next three years and slash EV manufacturing costs by 30% in an effort to reach cost parity with internal combustion engine vehicles by 2030. It’ll bring down costs by incorporating battery innovations and new manufacturing processes. And the company will make EVs in “families,” starting with a “main vehicle” and then building on that design with new variations that can be significantly cheaper and faster to produce.

3. EV startup Fisker faces bankruptcy

The New York Stock Exchange yesterday halted trading of electric vehicle startup Fisker Inc.’s shares and said it planned to delist the stock due to “abnormally low” share prices. The company had been in talks with a major automaker about a potential investment, but the deal fell through, which means its financials are in bad shape and bankruptcy may be looming. If the cash-strapped company fails, it would join the ranks of other embattled EV startups including Aptera and Detroit Automotive. Last week Fisker paused its EV production.

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4. Trader Joe’s raises banana prices

Trader Joe’s is hiking the price of bananas for the first time in two decades. The grocery chain has long sold individual bananas for just 19 cents, but has raised the price to 23 cents. A spokesperson told CNN the change was due to cost increases. Earlier this month, industry experts gathering at the World Banana Forum warned that climate change was hurting banana production and supply chains and that this would soon result in higher banana prices for consumers.

5. Study shows how ‘cooling’ paints can reduce urban temperatures

Special “cooling” paint can significantly reduce the temperatures of surfaces in cities and help pedestrians feel cooler, according to a new study published in the journal Sustainable Cities and Society. The research is the first demonstration of how paints made to reflect the sun’s heat actually perform in the real world. For the study, researchers at Singapore’s Nanyang Technological University covered surfaces such as walls, rooftops, and pavements in an industrial neighborhood in Singapore. They found those surfaces were up to 2 degrees Celsius cooler than uncoated areas during the hottest time of the day, and that this helped pedestrians feel 1.5 degrees cooler. “This is a minimally intrusive solution for urban cooling that has an immediate effect,” said the study’s lead author, Dr. E V S Kiran Kumar Donthu. “By reducing the amount of heat absorbed in urban structures, we also reduce heat load in buildings, consequently reducing indoor air-conditioning energy consumption.” Below you can see some of the coated test surfaces:

Nanyang Technological University

THE KICKER

Ohio has approved the Oak Run Solar Project, a 6,000-acre solar farm in Madison County that will also graze 1,000 sheep and grow crops. The farm will be the nation’s largest “agrivoltaics” project.

Yellow

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