Insurance and Climate Change column

Sustainable Recovery Plan Pitching Pandemic as Opportunity to Grow Greener

By | June 18, 2020

Economic growth can be boosted, jobs can be saved or even created and greenhouse gas emissions can be cut if we take advantage of the worldwide changes that have occurred as we hunkered down in response to the COVID-19 pandemic.

That’s the crux of the Sustainable Recovery Plan presented today by the International Energy Agency. It focuses on a series of actions that can be taken over the next three years to revitalize economies and boost employment while making energy systems cleaner and more resilient.

The plan, outlined in a special edition of the IEA’s annual World Energy Outlook, examines more than 30 individual policies that could potentially lift the world out of its Covid-19 economic slump and generate “climate-safe growth.”

The policies would create 9 million jobs across a variety of energy-intensive sectors and push global GDP 3.5% higher by 2023 than it would otherwise have been, according to a joint IEA-International Monetary Fund analysis.

To achieve these results, however, authors of the report say it would require global investment of about $1 trillion annually over the next three years.

“Governments have a once-in-a-lifetime opportunity to reboot their economies and bring a wave of new employment opportunities while accelerating the shift to a more resilient and cleaner energy future,” Fatih Birol, IEA’s executive director, said in a statement. “Policy makers are having to make hugely consequential decisions in a very short space of time as they draw up stimulus packages. Our Sustainable Recovery Plan provides them with rigorous analysis and clear advice on how to tackle today’s major economic, energy and climate challenges at the same time.”

The IEA’s energy employment database shows that the energy industry directly employed around 40 million people globally as of last year. The special report estimates that 3 million of those jobs have been lost or are at risk due to the impacts of Covid-19, with another 3 million jobs lost or at risk in related areas such as vehicles, buildings and industry.

The largest portion of the millions of new jobs created through the Sustainable Recovery Plan would be in retrofitting buildings to improve energy efficiency and in the electricity sector, according to the report.

Senses

An international team of researchers has developed an interactive online platform to make climate scenarios work for decision makers.

The SENSES platform (SENSES stands for climate change ScENario ServicES) provides the tools to use scenarios, ranging from climate impacts to mitigation and energy options to a broader public beyond science.

The scenarios can help policymakers and businesses, finance actors and civil society alike to assess the threat of global warming and ways to limit it, according to its designers.

The SENSES project is part of the European Research Area for Climate Services, supported by national ministries and the EU.

“Climate scenarios are powerful tools that allow us to explore possible climate futures and how they are shaped by our collective actions, which is why we want to enable all kinds of decision makers to actually make use of them,” said Elmar Kriegler, from PIK who leads the SENSES consortium that collectively developed the online platform. “Science has been developing and using climate scenarios for many years, based on computer simulations, yet they’re admittedly a rather complicated matter and results are scattered in all too many scientific publications. We now want to offer a new way of access to those scenarios so people can see for themselves what is at stake with climate stabilization, and can base their decisions on the best information available.”

A finance expert who wants to assess the potential of stranded assets in the fossil fuel industry, for instance, would be interested to see how rapidly global greenhouse gas emissions must be reduced to keep warming below the internationally agreed limit of 1.5-2°C. The user can check out the emissions gap learning module on the SENSES platform, which gives basic information as well as graphics and links to literature.

Adani’s Carmichael

Insurers around the globe linked to Adani’s Carmichael coal mine in Australia are distancing themselves from the controversial development, as pressure mounts on financial institutions to cut their ties to the fossil fuel industry.

Adani’s search for partners in the project, which would open up an untouched basin, has been frustrated as activists who have increasingly pressured the financial world to abandon fossil fuels, according to a Bloomberg report published in Insurance Journal.

The pushback comes after the Sydney Morning Herald reported that Liberty International Underwriters, HDI Global SE and AXA SA’s XL Australia, as well as reinsurer Aspen Re, charged Adani for policies covering work at Carmichael since November. The report was based on invoices obtained from an employee at the broker, Marsh & McLennan.

In response to Bloomberg queries, LIU’s parent company Liberty Mutual Insurance Co., HDI, and France’s AXA all said they had no active policies in place for the mine and had ruled out insuring the project in the future.

Liberty and HDI both confirmed they had insured some early site works dating back to 2015, but Liberty said its policy expired in October 2019, and it was contractually obligated to a 24-month maintenance period for any defects following the conclusion of the insurance period.

Aspen Group would not comment on individual policies, but said it was reviewing its underwriting appetite for fossil fuels.

Adani won approval last year to proceed with the thermal coal mine in Queensland’s Galilee Basin following a lengthy struggle with regulators and climate action groups. Australia’s QBE Insurance Group Ltd. and Suncorp Group Ltd. have steered clear of the Carmichael project, Bloomberg reported.

Wine

Attention winos – particularly lovers of the vivifying grape juice that comes from California.

Climate change is threatening cabernet and other quintessential Napa wines.

Projections show the area in Napa suited to growing cabernet, pinot noir, and other premium grapes could be cut in half by 2039 in the face of climbing temperatures, potential water shortages and more devastating fires, the website Slate is reporting.

Many Napa’s growers are looking to take action to protect their livelihoods and to contribute to global efforts to fight climate change through carbon farming, practices that are designed to maximize carbon storage in the soil.

Highly optimistic calculations suggest that if the practice is implemented worldwide, carbon farming could sequester 100% of annual global CO² emissions.

“The climate change mitigation potential of these agricultural practices alone could lower temperature by 0.1 to 0.3 degrees Celsius by the end of the century,” Whendee Silver, a professor of environmental science, policy, and management at the University of California–Berkeley, told Slate.

Miguel Garcia, who works at the Napa County Resource Conservation District and is leading the effort to implement carbon farming in Napa vineyards, told the publication: “There’s really no reason, given enough time, that the entire valley can’t be carbon neutral or even carbon negative.”

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