E & E Energy Wire: Insurers, reinsurers urge Congress to cap GHG emissions
Congressional Democrats found vocal allies today in their quest to cap carbon dioxide emissions -- the insurance and reinsurance industries.
Sens. Sheldon Whitehouse (D-RI) and Bernie Sanders (I-VT) told reporters that record temperatures and more frequent extreme weather events are causing billions of dollars in losses for property owners and their insurers.
"We have seen in the last several years an unprecedented level of extreme weather disturbances in our own country and around the world," said Sanders at a sparsely attended press conference on Capitol Hill.
Flanked by insurance industry representatives who have supported action on climate change, Sanders acknowledged that individual weather-related catastrophes cannot be said to have been caused by climate change. But he quoted scientist and activist James Hansen that it is "nearly certain" that events like the Russian heat wave of 2010 and the Texas drought of 2011 "would not have occurred in the absence of global warming."
Whitehouse said warming linked to industrial greenhouse gas emissions has "loaded the dice" in favor of more extreme storms, something the insurance industry has been forced to take note of.
"They have billions of dollars in shareholder capital at stake, and they have no room for foolishness in their decisions," Whitehouse said. "They have to live in a reality-based environment."
Fourteen natural catastrophes caused at least $1 billion each in damages in the United States in 2011, and the insurance industry suffered an unprecedented $44 billion in catastrophe-related losses overall.
"If we continue on this path, extreme weather is certain to make more homes and businesses uninsurable in the private insurance market, thereby raising the cost significantly to both taxpayers and individuals," said Cynthia McHale, director of the insurance program for the environmental investor coalition Ceres.
But despite these concerns, the insurance and reinsurance industries are reluctant to invest in lobbying and messaging activities on the same scale as industries that oppose greenhouse gas regulations, like petroleum, mining and manufacturing.
Franklin Nutter, president of the Reinsurance Association of America, said his industry focuses more on reducing the consequences of climate change through changes in building codes, improved land-use planning and other measures than on the battle for carbon regulation.
"Our focus has largely been on adaptation, as opposed to the political process, which has clearly been hung up on carbon mitigation and the question of how to deal with that," Nutter said.
"The insurance industry in the U.S. has largely been outside this discussion almost completely," Nutter added.
Mark Way, director of risk management for international reinsurance company Swiss Re, said that his company has developed a climate strategy for its own operations and is involved in some coalitions that look at climate change. But he said the company is not involved in any "hard-core lobbying efforts" on the subject.
"I think there are a lot of issues we could lobby on, and this is one of them," Way said. "I don't think there's any particular reason why not. But I think we're getting our message across to a wide section of our stakeholders already through the platforms we use and the discussions we have with clients."