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Brent Walker: Extra Terrestrial Influences on Natures Risks
My thanks to Doug Cotton, who has flagged up this paper offering a good overview of the Earth’s solar system environment, and how it is affected by it. Brent Walker is an actuary who is interested in assessing risk posed by nature. He has pulled together much f the material which interests us here at the talkshop into a single, very readable paper, which I recommend. Here’s one of the key figures from the text, to whet the appetite:
The first graph above shows the global mean thermosphere density at 400 km altitude, obtained from satellite orbital parameters over four solar cycles. Blue: 81-day centered running mean. Black: annual average. Green dotted lines: envelope of expected decrease due to increasing CO2 levels, in the range of 2% to 5% per decade, starting with the 1976 annual average. This effectively rules out changing levels of carbon dioxide as the cause of the decrease in temperature recently witnessed.
The second graph shows the Global mean thermosphere density annual average plotted as a function of the 26-34 nm solar EUV irradiance annual average measured by the SEM for the ascending (red) and descending (blue) phases of solar cycle 23. Both of these graphs were obtained from the paper: Solomon et al “Anomalously low solar extreme-ultraviolet irradiance and thermosphere density during solar minimum”. GEOPHYSICAL RESEARCH LETTERS, VOL. 37, 2010
Extra Terrestrial Influences on Natures Risks
Brent Walker – February 2012
If the Global Financial Crisis taught actuaries anything, it would have been that the financial models of countries produced by economists were not infallible. We have learnt that models of the economy should not ignore the interdependence of one country’s banking system to those of other countries nor the dependencies between governments, banks, and other institutions including insurers. We should not ignore the influences of governments and not just the government(s) of the country being modeled. We should not ignore the possibility that economic models are sometimes skewed to produce politically determined outcomes. The crisis is still teaching us that there are many moral hazard risks in the financial sector that must not be ignored.
We must not make the same mistakes when we model nature. We should not assume that other professions have got their models correct. We must look beyond the range of variables being taken up in models to make sure important variables haven’t been left out. We need to understand the dependencies between the modeled variables and between those variables and the ones that are not included in the models. We should ensure that moral hazard risks were satisfactorily addressed and have not influenced the models to produce pre-determined outcomes. Finally, as actuaries, we must remember the statistical maxim that “correlation does not imply causation”. In science it is physics that provides causation links. As Sir Ernest Rutherford once elegantly put it “All science is either physics or stamp collecting”.
This paper is unashamedly about the physics related to extra-terrestrial influences on nature’s risks. If actuaries who having read this paper put it down curious to know more about the incredibly powerful extra-terrestrial forces of nature then the author has done the job that he set out to do. There are many references that will enable those with curious minds to explore further.
It will give me great pleasure to learn in my dotage of actuaries using many of the useful data sets that the space age has spawned. These data sets will help actuaries with predictions about the various natural risks that give rise to claims on insurers. Already there are sophisticated risk management systems using space weather forecasting to mitigate the risks arising from major space weather phenomena. As far as I know actuaries are not involved in space weather forecasting but they should be, particularly as the profession wishes to play a substantial role in risk management so as to remain relevant by the end of the 21st Century.
If this paper was written four centuries ago the author would have met the same fate as Giordano Bruno. Even if it had been written a few years ago it would probably have been rejected as being too politically incorrect or maybe not sufficiently “actuarial”. But with the Sun now, almost definitely, in a grand minimum, which on previous occasions has produced climatic periods known as “little ice-ages”, it is time to look at nature’s influence on the environment in addition to looking at man’s influence. Although the last little ice-age occurred more than 200 years ago, records do suggest that during it and preceding little ice-age periods, there were times of intense cold in Europe and North America particularly during the Northern Hemisphere winters. The climate during these periods was further complicated by what seems to have been increased volcanic activity. Some of the largest recorded earthquakes also happened during these periods.
Was the extreme cold in Europe in February 2012 just a taste of what is still to come in Northern winters of the next few decades? Let’s not forget that collectively mankind has experienced great difficulties obtaining food and energy during previous little ice-ages. It is also worth remembering that the human population on Earth at the beginning of the last one was only 10% of what it is currently.
During the time of the last little ice-age, from 1790 – 1830, Thomas Malthus wrote his treatise, the French Revolution occurred and the Napoleonic Wars were fought.
2012-11-10 16:31:48
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