Dear reader,

Your humble editor hopes that you all had the opportunity today to join the Meaningful Tourism for Africa Webinar, organised by the Meaningful Tourism Centre, the Africa Tourism Research Network and the Institute for Tourism. If not, you can find a video recording of the complete webinar on www.institutetourism.com.

Insurance is certainly one of the most boring topics and seldom mentioned in the discussions about the threats to the tourism industry and to the global economy at large as result of the Climate Change.

However, “The insurance sector is a canary in the coalmine when it comes to climate impacts,” emphasized Janos Pasztor, former UN Assistant Secretary-General for Climate Change, already almost ten years ago.

More recently, Carolyn Kousky, Associate Vice President for economics and policy at the Environmental Defence Fund pointed out that “Insurance is where many people are feeling the economic impacts of climate change first. That is going to spill over into housing markets, mortgage markets, and local economies.”

Her recent article named “Is California becoming Uninsurable?” ends with the observation “that there is an ongoing tension between having insurance be available and having it be affordable. … Risks are growing dramatically … and the long-term outlook for insurability remains questionable.”

In a Guardian interview Günther Thallinger, board member of Allianz SE, one of the world’s biggest insurance companies, underlined that the world is fast approaching temperature levels where insurers will no longer be able to offer cover for many climate risks. Without insurance, which is already being pulled in some places, many other financial services become unviable, from mortgages to investments. Global carbon emissions are still rising and the damage resulting from a rise in global temperature by 3C above pre-industrial levels will be so great that governments will be unable to provide financial bailouts and it will be impossible to adapt to many climate impacts. Heat and water destroy capital. Flooded homes lose value. Overheated cities become uninhabitable.

Thallingers conclusion is sobering: “There is no way to ‘adapt’ to temperatures beyond human tolerance … Whole cities built on flood plains cannot simply pick up and move uphill.”

If climate damage cannot be insured against, covered by governments, or adapted to, that means “no more mortgages, no new real estate development, no long-term investment, no financial stability. The financial sector as we know it ceases to function. And with it, capitalism as we know it ceases to be viable.”

What is the reaction to this dark forecast? Lisa Sachs, the director of the Columbia Center on Sustainable Investment, recently answered clearly: it is the wrong one.

Climate Impact on Tourism

“Adaptation & resilience are now central to climate finance discourse. On one hand, this is long overdue. On the other, this rising emphasis reflects a deeper failure: we continue to woefully underfund mitigation, with the disastrous consequences long predicted. Attention is tilting toward adaptation/resilience without a coherent plan to fully decarbonize our global economy. That is a losing strategy.”

Echoing Thallingers words, she points out that adaptation has hard and imminent limits “as extreme heat will cross lethal thresholds, coastal infrastructure cannot be endlessly elevated or protected, crop yields even of climate-resilient varieties will decline and tipping points like coral reef collapse, permafrost thaw, and rainforest loss are irreversible and non-adaptable. As a result, all climate-smart technologies will be overwhelmed by compounding extremes.” Adaptation will become more and more expensive, less and less effective, and eventually impossible.

Lisa Sachs concludes that there is a need for financing BOTH full decarbonization and adaptation. However, your humble editor fails to see any signs that this is going to happen.

What does that mean for tourism? Obviously, the tourism industry can only influence a small part of the continuous usage of fossil fuels, which nevertheless needs to be pushed for from building prefabricated hotels to pressuring the aviation industry to speed up the introduction of SAF Sustainable Aviation Fuels. Leisure tourism might stop to exist as one of the victims of the faltering global economy in three or four decades. Nevertheless, in the meantime all hands should be aboard in using our possibilities to establish a Meaningful Tourism economy by adaptation to new forms, times, and spaces of tourism and by the decarbonization we can influence. The canary in the tourism coalmine is already choking, Let’s give it all the oxygen we can still manage to collect.

As always, all best wishes from Prof. Dr. Wolfgang Georg Arlt and the entire Meaningful Tourism Weekly team!

Many thanks to Nampetch Siramanon for providing the following guest article. She is based in Bangkok/Thailand and an expert for Corporate and Brand Communications, Marketing, and Sustainability. She has a Master of Arts degree in Development Communications from Chulalongkorn University. Since this week, she is one of the Certified Trainers for the Meaningful Tourism Transformational Game Workshop.

Photos: Payusai Praitalay