Insuring Southeast Asian commercial forests: Fire risk analysis and the potential for use of data in risk pricing and reduction of forest fire risk
The author uses his own data gleaned from over 10 years of commercial forestry insurance across the world to propose that despite a low intrinsic fire risk across most of Southeast Asia, especially Indonesia, commercial fire losses are unacceptably high, and could be reduced substantially within the current financial legal and political framework within which forestry companies operate.Opening with a statement about the dearth of forest fire loss data in the commercial sector, it is observed that the consequent inability of general insurers to estimate the rate of fire loss leads to very low insurance participation in forestry within Indonesia. A summary is then provided of the financial and environmental benefits of insurance participation in commercial forestry were this situation to be changed.A short discussion on risk perceptions is introduced to make the point that without reliable commercial forest fire loss data, risk perceptions of fire exposure in Southeast Asia by the financial sector, including insurers, is a barrier to risk transfer and investment. While real fire risk and perceived fire risk for Indonesia seem at present to be in agreement, the paper challenges that this should the case.Comparisons are made with different parts of the world with the knowledge that, in commercial terms, plantations in the low latitudes behave similarly everywhere in terms of fire causes, fire propagation factors, and characteristics of plantation or managed mixed forest fires. A review of the fire sizes within commercial forests is a good indicator of the efficiency of fire management strategies, and profiles from a high fire risk territory and Indonesia are compared.Using commercial and unidentified data the author then demonstrates that commercial growers in Indonesia have a high annual rate of forest fire loss and may also have a significant catastrophe fire exposure. This ‘cat’ exposure is far greater than for equivalent plantations in clearly higher fire risk environments. These conclusions are and should be discussed with forestry companies to change attitude and investment levels.Practical points for improved plantation fire management are made along with comments about the resources required. A parallel discussion then reviews fire risk assessment and management by the insurers to prevent their own ‘forest fire’ losses if they are to get further involved with the provision of Indonesian commercial forest risk transfer. The explanation of how insurers price risk within a portfolio helps identify the specific data needed for a proper risk management strategy to be developed.
Nonlinear Regression Models to Identify Functional Forms of Deforestation in East Asia
Identification of the factors involved in deforestation could lead to a comprehensive understanding of deforestation on a broad scale, as well as prediction capability. In this paper, regression models with two explanatory variables-human population and relief energy, i.e., the difference between the maximum and minimum altitudes in a sampled area-were verified as to whether they could elucidate aspects of deforestation. The functional forms of the nonlinear regression models were estimated by step functions analyzed with the use of high-precision Japanese data. Candidate smooth regression models were then derived from the obtained sigmoidal shapes by the step functions. Models with spatially dependent errors were also developed. Akaike's information criterion was used to evaluate the models on four data sets for the East Asia region. From the evaluation, we selected the best three models that systematically showed the best relative appropriateness to the real data.
Assessment of Ground Regeneration around Borehole Heat Exchangers between Heating Seasons in Cold Climates: A Case Study in Bialystok (NE, Poland)
Based on the experimental studies, the process of ground regeneration around the borehole loaded with brine-water heat pumps working exclusively for heating purposes in the period of four consecutive heating seasons in a cold climate was presented. The research was conducted in north-eastern Poland. The aim of the work is to verify the phenomenon of thermal ground regeneration in the period between heating seasons on the basis of the recorded data and to check whether the ground is able to regenerate itself and at what rate. It was noticed that the ground does not fully regenerate, especially during heating seasons with lower temperatures. In the analyzed period, from 22 September 2016 to 12 October 2020, the ground probably cooled irreversibly by 1.5 °C. In order to illustrate and evaluate the speed of changes in the ground, the one’s profile with an undisturbed temperature field was presented for each month of the year. The presented results can be a very important source of information for the analysis of geothermal conditions occurring in the ground. They can be used to verify mathematical models and conduct long-term simulations that allow us to see the complexity of the processes taking place in the ground.