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Could insurance companies save the environment?

Jennie Young • Apr 11, 2018 at 8:15 AM

No one should argue some plain facts about economic growth and prosperity. Investment numbers go up when we stimulate more rapid exploitation of natural resources and expect more lax regulation of waste and pollution. By the conventional measure of GNP and stock-market averages, we definitely can expect the numbers to improve.

A writer in this column a few weeks back argued just those indisputable facts in support of his theme. Rep. Phil Roe plays to them as often as he can in his email newsletter. The Republican-led House and Senate are all charged up about it, and the Trump administration seems positively giddy with the prospect.

But along comes a caveat to undermine that certainty. It’s not a complete argument until you ask: Over what term? I’ve written before about the problem of assuming unlimited growth on a planet which does not grow. Over what term will the planet absorb the consequences of unfettered growth? Unusual weather events, disastrous wildfires, record temperatures, thawing permafrost, and massive ice melt, all seem evidence that the planet is in revolt against headlong “progress.” But this has so far stimulated very little bipartisan political will.

Despite talks, lectures, books, scientific reports, world conferences and global agreements addressing the moral imperative, the threat to our children and grandchildren’s quality of life, and the projected scale of human suffering — none seem able to loosen the tenacity of deniers, including our denier-in-chief. It’s time to look elsewhere for evidence that reality, and common sense, have found traction.

Experts are always telling us to “Follow the money,” and we’re sure talking big money here. In 2011, groups of students on campuses in the U.S., inspired by environmental activist and founder of 350.org, Bill McKibbon, started lobbying university administrations to divest from fossil fuels and reinvest in green energy. The movement caught on worldwide, and today a whopping $6 trillion dollars (that’s with a “t”, folks) has been divested, by university endowments and as many as 700 businesses, pension funds and small and large municipalities (including Washington, D.C., and New York City). Also charities, foundations, and around 60,000 individual portfolios. Norway’s Sovereign Wealth Fund (the largest pool of investment companies in the world) has joined what in the last seven years seems a lot like the beginning of a stampede. Some insurers have shed their investments in fossil fuels because they know they could suffer a huge loss if their stock is hit by real action on climate change.

The banks are considerably slower at cutting financing to fossil fuel operations, but that’s beginning, too. Last year saw a 22 percent drop in the banking sector’s investment in petroleum, gas, and coal, with coal struggling the most. A significant step occurred on Dec. 12, when the World Bank announced it will stop funding oil and gas exploration and production after 2019. Investment in green energy still lags, but the trends are notably positive. Pressure from investors is growing, and is rapidly changing the green/fossil ratio. At least 52 towns and cities are taking beginning steps toward powering themselves solely with green energy, finding it actually improves the bottom line.

With Trump at the helm and the EPA’s Scott Pruitt at his side, and Congress unlikely to object, the prospects of soon dealing with climate change at the federal level seem bleak right now. There is one business sector, though, which may be able to successfully challenge that. It is the insurance sector. They are quite aware that as carbon dioxide concentrations increase, we can expect to experience more severe weather disruptions and losses. As natural catastrophes impact world populations, the insurance companies are also affected.

A growing coalition of insurers has decided that the industry’s traditional response to risk — raising premiums or withdrawing coverage — will not be adequate to deal with rising risk. Because they understand effects of climate change as the underwriters, they have decided that with their risk management expertise, they may be better positioned than any other group to influence public and private-sector policymakers toward the need for climate action. They can also advise them on how fast we should make the change from a high-carbon to low-carbon economy. No one studies more on the wide economic impact of property loss, and they understand why they must act as much in the public interest as in their own. (Unlike Rex Tillerson’s Exxon Mobile, which suppressed for 40 years what the company’s scientists had uncovered on the causes and effects of climate change.)

I wonder how long it will take for a consortium of investors, bankers and insurers to arrive on Capitol Hill informing our “leadership” that if they want to be players in this exciting and critical enterprise, they must withdraw their heads from sand and consider themselves on notice. And to serve notice also that the fossil fuels industry, perennially self-interested, must accept a makeover and the need for the changes to come. Along with less expectation of their customary tapping into the public trough.

Jennie Young of Elizabethton is a retired language arts teacher.

Editor’s note: The opinions expressed by all Community Voices columnists are their own and do not necessary reflect those of the Johnson City Press.

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