Insurance and Climate Change column

Congressional Action Plan on Climate Change Applauded by Zurich, IBHS

By | July 2, 2020

A Congressional action plan for a clean energy economy is garnering a bit of praise from a few important names in the insurance industry.

The House of Representatives in 2019 established the House Select Committee on the Climate Crisis to make climate policy recommendations to Congress to achieve reductions in activities that contribute to the climate crisis.

The committee, chaired by Rep. Kathy Castor, D-FL, which includes experts in climate change, clean energy and environmental justice, delivered its final report to Congress on June 30.

The report, “Solving the Climate Crisis: The Congressional Action Plan for a Clean Energy Economy and a Healthy and Just America,” is designed to provide a roadmap for policymakers to deal with climate change.

It calls for:

  • Reaching 100% clean, net-zero emissions economy-wide in the U.S. by no later than 2050.
  • Establishing ambitious interim targets to assess progress and reduce pollution in environmental justice communities.
  • Achieving net-negative emissions during the 2nd half of the century.

Some of they ways to achieve these goals outlined in the plan include supporting rapid deployment and build up of green energy resources, incentivizing green energy and launching new green economic sectors.

Ben Harper, Zurich North America head of corporate sustainability, applauded the plan.

“We believe the global impact of climate change is one of the most complex issues facing today’s society,” Harper said. “The Congressional Action Plan is a positive and significant step towards addressing how the government should work with the private sector to help tackle these issues.”

He added: “We look forward to working with Congress as they work to turn the Action Plan into legislation.”

The Insurance Institute for Business & Home Safety also had positive things to say about the report.

“Crucial to the long-term need to adapt, the Committee’s report demands a focus now on serving minority and low-income communities to strengthen homes and better prepare for climate change. We are not powerless against severe weather,” Roy Wright, president and CEO of IBHS, said in a statement. “Adaptation is a sound fiscal strategy, public health objective and humanitarian obligation to prepare today for tomorrow’s disasters.”

New Jersey

As levels of carbon dioxide and other greenhouse gases increase in the atmosphere, New Jersey will experience significant direct and secondary changes in its environment, including increases in temperature, frequency and intensity of storms, sea-level rise, ocean acidification, as well as impacts on human health and the economy.

That’s according to a new report from New Jersey’s Department of Environmental Protection. The report is part of the state’s strategy to reduce emissions that fuel global warming as well as plan for climate change impacts that New Jersey is expected to experience.

“Many of the impacts of climate change are already familiar to New Jersey’s residents, including increasing temperatures, rising sea levels, and more frequent and intense storms,” the report states. “New Jersey has seen the evidence of climate change in our increasingly mild winters, more frequent heavy rains, flooding along inland streams and rivers, and more sunny day tidal flooding along areas of the coast. These events can threaten public health and safety, destroy property, undermine critical infrastructure, and damage New Jersey’s economy, including the vibrant tourism industry supported by our beloved shore and lake communities.”

Key findings in the report include:

  • New Jersey is warming faster than the rest of the Northeast region and the world (since 1895, New Jersey’s annual temperature has increased by 3.5°F).
  • Climate change could result in a 55% increase in summer heat-related mortalities.
  • Annual precipitation in New Jersey is expected to increase by 4% to 11% by 2050, while the size and frequency of floods will increase as annual precipitation increases.
  • By 2050, there is a 50% chance that sea-level rise will meet or exceed 1.4 feet.
  • The effects of climate change are likely to contribute to an increase in air pollution, lead to increased respiratory and cardiovascular health problems, like asthma and hay fever, and a greater number of premature deaths.
  • New Jersey may become unsuitable for specialty crops like blueberries and cranberries in the future as higher temperatures reduce necessary winterchills.

Bank of England

Banks and insurers in Britain must implement plans they have drawn up to deal with risks to their businesses from climate change by the end of 2021, the Bank of England said.

The BoE previously told firms to establish a plan by October 2019 to mitigate climate-related risks, such as rising flood claims, or risks caused by a shift to net-zero emissions that will hit investments in activities with heavy emissions.

However, the bank did not previously give a deadline for implementing those plans, according to a Reuters article appearing this week in Insurance Journal.

Deputy Governor Sam Woods, who has set the end of 2021 as the date to “fully embed” plans to deal with climate risks, told heads of banks and insurers that it regulates in a letter: “There are some areas of our expectations where few barriers exist to full implementation, but we recognize that challenges remain in others.”

He acknowledged that limited data meant firms might not be able to calculate in full the impact on capital by the end of 2021.

“However, you should be able to explain what steps your firm has taken to ensure that, where appropriate, capital levels adequately cover the risks to which your firm is, or might be, exposed,” Woods said.

BoE-backed industry guidance on mitigating climate risks was published this week. Woods said the central bank, which also acts as a regulator, would offer further guidance.

Miami Heat

Miami just experienced its hottest week on record, which rounds out its warmest first half of the year ever, with two out of every three days this year having featured a broken record of some sort somewhere in South Florida, the Washington Post is reporting.

“The unrelenting, punishing heat — even in a place known for its tropical climate — fits into the pattern of rising temperatures from climate warming. This latest burst of heat was further intensified by a plume of dry, dusty air carried into the region from the Sahara desert,” a Post story published this week states.

According to the article, the record-setting heat has been exacerbated by a layer of arid desert air coming westward from Africa, which has acted to suppress Florida’s characteristic thunderstorm activity.

Without that activity, there’s been nothing to stop South Florida from baking beneath the summer sun.

“The heat is unprecedented … in terms of prolonged extreme warm temperatures, daily average temperatures, and one week and counting with a 90-degree-plus heat index,” wrote Brian McNoldy, CWG’s tropical weather expert, in an email to the Post.

The article offers a breakdown of hot days:

Over the past week, the mean temperature in Miami was 88.1 degrees, the warmest week in the city’s recorded history. That comes as nine of Miami’s 10 hottest days since 1937 have occurred in the past three years, according to the Post.

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