December 7, 2009 - Allianz and the World Wildlife Fund have commissioned a report which assesses the potential economic consequences of not addressing climate change in the near future, changing the frame of the argument from "cost of action" to one that addresses the "cost of inaction."

The report, 'Major Tipping Points in the Earth's Climate System and Consequences for the Insurance Sector' was written by Tim Lenton and Anthony Footitt at the Tyndall Centre for Climate Change Research; and Andrew Dlugolecki at Andlug Consulting (all in the U.K.). A tipping point is a critical point at which a relatively small incremental change in a component of the Earth system has big consequences. The report focuses on four tipping points that are policy-relevant and are most likely to have impacts within (or beginning by) the middle of this century as a result of the rapid increase of greenhouse gases in the atmosphere. For each tipping point, the report attempts to quantify the economic costs and the assets at risk. They include:

Sea level rise. Globally, a 0.5 meter (20 inches) sea level rise (with somewhat higher levels along U.S. northeast coast) could increase the value of at-risk assets in 136 key coastal cities worldwide by up to $28 trillion.

Increased Aridity in Southwest North America. The region is likely to be affected by droughts and levels of aridity similar to the Dust Bowl in the 1930s. In California alone, this would result in major impacts on water resources, agriculture and wildfires. The annual damages caused by wildfires could be tenfold compared to today's costs and could reach up to $2.5 billion per year by 2050, and up to $14 billion annually by 2085.

Shifts in the Indian Monsoon. Shifts in the monsoon coupled with the melting of Himalayan glaciers could "increase the likelihood, severity and exposure of populations and the economy to potentially devastating conditions within the first half of this century with implications for water resources, health, and food security, and major economic implications not only for India but for economies regionally and worldwide."

Dieback of the Amazon Rainforest. Dieback of the Amazon rainforest could reach 70% by the end of the century as a consequence of a significant increase in the frequency of droughts in the Amazon basin. The impacts include loss of biodiversity and massive releases of carbon to the atmosphere. Costs could range well into the trillions of dollars, depending on the degree of warming.

The report took a closer look at major coastal city infrastructure and privately held real estate assets that would be put at risk by rising sea level. Coastal storm surges and hurricane damage could create risk exposure for the following cities based on a .5 meter seal level rise this century: Miami ($2.8 trillion), New York-Newark ($1.8 trillion), New Orleans ($753 billion), Boston ($463 billion), Virginia Beach ($462 billion) and Tampa-St Petersburg ($414 billion).

For More Information visit the interactive site launched by thh WWF and Allianz explaning these areas further.