Thursday, November 5, 2009

Paying the climate change premium

Ready to have your insurance rates go up? That’s what one industry group says will happen as climate change disrupts the world’s weather.

The Association of British Insurers said the cost of flood and windstorm damage would rise for insurers as global temperatures increased.

This would lead to higher premiums for consumers and a restriction of cover as insurers would need more reserves.

“These findings have serious implications for insurers, householders, businesses and governments,” said Nick Starling, the ABI’s director of general insurance and health.

“The continued widespread availability of property insurance in the future depends on taking action now to manage the threats of climate change.”

We normally think of the insurance industry as conservative, but when it comes to climate change, it’s been extremely aggressive. After all, that’s what the insurers do: analyze and seek to minimize risk–and global warming has made them increasingly worried about their bottom line. In fact, it’s the industry’s very conservativeness that made it one of the first to bang the drum about the perils of a warming world.

For example: Swiss Re, the world’s largest re-insurer, keeps three climatologist on staff. It has tracked rising damages from natural disasters for decades. Something like 20 years ago, it released its first report warning of the road that lay ahead. The graph up above is from a report they released on the future impacts of climate change.

The rest of the article is here.

Survey: Economists see threat in climate change

Researchers who deal in cold numbers rather than warming climates believe the "significant benefits from curbing greenhouse-gas emissions would justify the costs of action," a new survey finds.

In fact, the survey of economists finds 94% believe the U.S. should join climate agreements to limit global warming.

The survey results to be released today come as debate over the economics of global warming moves center stage in Washington, D.C. Republican senators boycotted a hearing Tuesday over an Environmental Protection Agency analysis about the costs of a clean-energy bill. In addition, the United States and European Union are preparing for a December meeting in Copenhagen to discuss a climate treaty.

"An economist tree hugger is an imaginary creature," says Michael Livermore of New York University's Institute for Policy Integrity, which conducted the survey. "But we found that economists really see climate change poses a lot of risk to the economy."

The survey approached the 289 economists who had published climate-related studies in the top 25 economics journals in the past 15 years. About half, 144, responded, and 75% agreed or strongly agreed on the "value" of greenhouse-gas controls.

The complete article in USA Today is here.