Insurance and Climate Change column

Scientists Call for Urgent Climate Change Action, Citing ‘Tipping Point’

By | July 29, 2021

The California Climate Insurance Working Group has released 40 state and local policy recommendations focused on reducing damage and improving recovery following a wildfire, extreme heat wave, or flood.

The report “Protecting Communities, Preserving Nature, and Building Resiliency; How First-of-Its-Kind Climate Insurance Will Help Combat the Costs of Wildfires, Extreme Heat, and Floods” recommends policies to the state’s insurance commissioner, the governor, the state Legislature, local governments, businesses, and communities to help close protection gaps between those who are insured and those who are uninsured or underinsured.

The report includes recommendations for dealing with the increasing threat of extreme heat waves, such as strengthening nature-based solutions including healthy forests, wetlands, and urban tree canopies.

California Insurance Commissioner Ricardo Lara established the group through the passage of Senate Bill 30. The group’s 18 members include Lara, environmental advocates, researchers, and international and U.S.-based insurance leaders.

Lara will prioritize several policies under his existing authority to protect Californians, including:

  • Creating “climate ready” pilot projects utilizing nature-based solutions, such as a community flood insurance plan for an at-risk area that gives residents some disaster coverage.
  • Advocating for ranking of heat waves to better communicate the risks to consumers and help communities prepare.
  • Increasing pre-disaster mitigation by consumers, business, and local governments.
  • Incentivizing safer building through proposed regulations to require insurance companies disclose wildfire risk scores to consumers and businesses while incentivizing home- and community-hardening.


Lloyd’s has outlined just how the insurance industry will partner with critical industries to support and accelerate the world’s transition to a low carbon economy.

Lloyd’s on Thursday announced the launch of its new report, Insuring a sustainable, greener future.

The report notes that the insurance industry has a global capital pool of more than $30 trillion, and the cover it extends to organizations worldwide “supports and enables the entrepreneurialism, innovation and investment that is required to accelerate the world’s transition to a more sustainable future.”

Lloyd’s also set out a climate action roadmap that includes steps to help accelerate the transition of multiple industries to net zero carbon: the development of new risk transfer solutions to provide critical support for green innovation and renewable energy investment and expansion; a public-private disaster resilience, response and recovery framework that help protect developing nations from the evolving economic and societal impacts of climate change.

The report details the steps Lloyd’s is taking now, which include working towards “de-risking critical decarbonisation activities,” closing protection gaps and acting as a facilitator to encourage action across the industry, customers, government and other key stakeholders.

Lloyd’s said it will work with critical industries to improve knowledge around risk landscapes and help the insurance industry adapt to meet changing customer needs as the world transitions to a sustainable future. Lloyd’s also said it will expand coverage to support the growth of the greener energy sector as well as facilitate the development of new insurance products for electric vehicles.

U of Washington Research

New research led by the University of Washington and the University of California, Santa Barbara, looks at the longer-term future of wildfires driven by increased temperature and drought using a model that focuses on the eastern California forests of the Sierra Nevada.

The study, published July 26 in the journal Ecosphere and covered in a Newswise article on Insurance Journal on Wedneday, finds that there will be an initial roughly decade-long burst of wildfire activity, followed by recurring fires of decreasing area.

“That first burst of wildfire is consistent with what we’re seeing right now in the West. The buildup of fuels, in conjunction with the increasingly hot and dry conditions, leads to these very large, catastrophic fire events,” lead author Maureen Kennedy, assistant professor at the University of Washington Tacoma, said. “But our simulations show that if you allow fire to continue in an area, then the fire could become self-limiting, where each subsequent fire is smaller than the previous one.”

How climate change, tree growth and wildfires will interact in the ensuing decades is only beginning to be explored. Existing models of vegetation often assume wildfires will strike at set intervals, or are based on past patterns of wildfire risk, but those previous patterns may not be the best guide to the future, the article notes.

“The big question is: What’s going to happen with climate change? The relationships that we’ve seen between climate and wildfire over the past 30 years, is that going to continue? Or is there going to be a feedback? Because if we keep burning up these fuels, and with extreme drought that limits new growth, there will eventually be less fuel for wildfires,” Kennedy said.

Tipping Point

Thousands of scientists are repeating their calls for urgent action to tackle climate change, saying the world is at a “tipping point” and calling for “transformative action.”

The scientists in an article published in the journal BioScience this week updated a 2019 warning in which they declared a climate emergency.

Since then there has been “an unprecedented surge in climate-related disasters,” including massive flooding in South America and Southeast Asia, record heat waves and wildfires in Australia and the Western U.S., “an extraordinary Atlantic hurricane season,” and cyclones in Africa, South Asia, and the West Pacific.

Noteworthy recent patterns in potential climate drivers and impacts include:

  • The Brazilian Amazon annual forest loss rate increased in 2019 and 2020, reaching a 12-year high of 1.11 million hectares destroyed.
  • Fossil fuel energy consumption decreased since 2019 likely due to the pandemic, but 2021 estimates show energy use rising again.
  • In April, carbon dioxide concentration reached 416 parts per million, the highest monthly global average concentration ever recorded, while the year 2020 was the second hottest year on record, and all five of the hottest years on record have occurred since 2015.
  • Glaciers are melting much faster than previously believed; they are losing 31% more snow and ice per year than they did just 15 years ago.
  • Both ocean heat content and sea level set new records. Ocean pH reached its second lowest year-to-date average value on record, just behind 2012.

“There is also mounting evidence that we are nearing or have already crossed tipping points associated with critical parts of the Earth system, including the West Antarctic and Greenland ice sheets, warm-water coral reefs, and the Amazon rainforest,” the report states.

Past columns:

Topics Climate Change

Was this article valuable?

Here are more articles you may enjoy.