The Business of Risk – Insuring Against Climate Change

When it comes to assessing risk, the insurance industry is one of the leaders in the field. Whether it is health insurance, car insurance, or homeowner’s insurance, the industry is forced to analyze every possible scenario for a given person or structure, and impose a fee based on the likelihood of events for the situation. So when an entire industry that bases their profitability on reducing risk starts factoring climate change into their equations, it's probably a good idea to pay attention.

Earlier this month, insurance commissioners in three separate U.S. states began mandating that insurance providers include the risk of climate change disasters in their risk equations, and develop and disclose their plans to deal with climate-related catastrophes. These plans will be laid out in surveys that insurance companies will provide to insurance commissioners in their respective states.

The three states that have made these new rules are California, New York, and Washington State. Previously, many states had only required the largest insurance companies to have climate plans, but the new rules, which could spread across the United States to climate change-vulnerable places like Florida and Texas, require all insurers to adjust for climate change disasters.

The New York Times lays out why the industry is taking on climate change issues:

Another Industry Talking Point Laid To Rest: Oil Production Soars But Gas Prices Remain High

It is hard to believe that it's been almost four years since Americans were bombarded by the cry of “Drill baby, drill” that echoed throughout the halls of the Republican National Convention in 2008. That slogan became a rallying cry for conservatives who believed that increasing oil drilling – in spite of the environmental costs – would lead to an economic boom in the United States, and would also help ease prices at the pump for American consumers.

So today, nearly four years after those words were uttered to millions of conservatives, we have domestic oil production reaching a 24-year high, according to new reports. By industry and conservative logic, this should also mean that economic productivity has risen while consumer gasoline prices have fallen. But nothing could be further from the truth.

It turns out that increased oil production has nothing to do with the prices Americans pay at the pump. While industry leaders point to increased production in 2008 that was followed by lower prices, experts counter that the drop in price was due to simple market fluctuations: specifically, a drop in demand due to the global recession.

People travelled less and therefore didn’t use as much gasoline, creating a surplus that companies had to expel by lowering prices. These same experts also say that a rise in renewable energy use contributed to lower fossil fuel prices during this time period.

Denier Conference Readies for Round Three

Among the many conservative think tanks faithfully pushing the skeptic message in Washington, D.C., few are as prominent—or, should I say, infamous—as the Heartland Institute. The “independent” research and non-profit group has the dubious distinction of having organized the first major denier-palooza, the “International Conference on Climate Change,” last year. Despite a less than stellar showing, and an even more lukewarm follow-up in March, it’s hoping that the third time will be the charm.

The likes of Senator James Inhofe, Lord Christopher Monckton and Anthony Watts will be descending on the Washington Court Hotel this week to discuss the “widespread dissent to the asserted “consensus” on the causes, consequences, and proper responses to climate change.” Its ostensible purpose will be to “expose Congressional staff and journalists to leading scientists and economists in the nation’s capital” and demonstrate that “global warming is not a crisis and that immediate action to reduce emissions is not necessary”—which it calls the emerging consensus view of (the handful of) scientists outside the IPCC.

The Oceans v. EPA

Out of sight, out of mind,” is a pithy saying that aptly sums up the attitude most industrialized countries have toward ocean acidification. While there has been much (justified) hand-wringing about the terrestrial impacts of climate change, policymakers have largely ignored the threats posed by acidic seas – which are considerable.

For one, ocean acidification could wipe out a significant fraction of the world’s coral reefs – perhaps even all of them – by mid-century if we don’t curb our emissions. In late 2007, 17 marine biologists co-authored a review article in Science in which they warned that, under a worst-case emissions scenario (450 – 500 ppm and a temperature increase larger than 5.4°C), all reefs could disappear, taking up to half of all marine life with them.

China, U.S. intransigence over climate policy hijacks Bali talks

A face off between the world’s largest greenhouse-gas spewers has taken center stage at the UN Climate Change Conference in Bali, and China appears to be winning its public-relations battle with the U.S.

China has reiterated it will not consider mandatory emissions cuts until the U.S. and other industrialized countries such as Canada embrace a less-extravagant lifestyle. The U.S. is standing pat in its opposition to mandatory limits.

Although both countries have dug in their heels, China, which many believe has already surpassed the U.S. as the world's top emitter of heat-trapping gases, is now seen as playing a constructive role on global warming after years of dodging the issue.

In that scenario, the U.S. is losing friends fast.

Global-warming deniers shift gears in their distraction conspiracy

A column in a Seattle newspaper says growing consensus on human causes of climate change has forced deniers to switch tactics, abandoning shrill demands for scientific evidence – which is ample – for “drive-by shootings” such as exaggerated estimates of energy consumption in Al Gore’s house in Tennessee, or Prince Charles flying across the Atlantic to receive an environmental award.

Governors from five western states join forces against global warming

Blaming inaction by the Bush Administration, the governors of Arizona, California, New Mexico, Oregon and Washington have agreed to develop a regional target to lower greenhouse gases and create a program aimed at helping businesses reach the still-undecided goals.

$350-million study of North, South polar changes set

Scientists from 60 countries will camp on drifting Arctic sea ice and trek to uncharted Antarctic mountains to clarify the role of greenhouse gases and global warming in the rapid changes already occurring at both poles. Called the International Polar Year despite its two-year timetable, it is the fourth such integrated Arctic and Antarctic science effort since 1881. The last ended in 1958.


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