In an era of climate chaos, the current insurance model is no longer viable. In “Climate catastrophes call for state intervention on insurance”, Patrick Jenkins is correct to say commercial operators can’t do this alone and “taxpayer-funded schemes are under pressure amid stretched government budgets”(Business Insight, January 28). A growing number of people, including here in Britain, are either ditching or struggling to obtain home insurance. The article praises public-private insurance partnerships as “the only viable model for a decent society”, but they risk being another piecemeal solution, offering a novel approach that will have to split the same resources to meet growing needs.
Without addressing the root cause — greenhouse gas emissions — any financial system will eventually buckle under the weight of rising climate disasters. Preventing the worst of climate change by ditching oil and gas must remain top priority. Yet even if emissions were to drop to zero tomorrow, we would have to find practical and fair ways to face the insurability crisis.
The fossil fuel industry is also the economic elephant in the room. Annual profits of companies like Shell have fallen, but remain staggeringly high. Meanwhile, the world is emerging from its hottest year on record.
By imposing taxes, levies and fines on dirty energy companies, ending export credits for oil and gas and eliminating harmful subsidies, new funds can underwrite public-private insurance schemes. It can also support millions in middle- and high-income countries who join the global majority by losing access to the insurance system.
Jenkins points to Spain’s Consorcio de Compensación de Seguros as a possible solution. Now imagine a fund for public infrastructure disaster financing, similar to the one proposed by the European Insurance and Occupational Pensions Authority and the European Central Bank. It could be paid from a levy on every barrel of oil equivalent produced.
This is not a pipe dream. Last year, Vermont passed a law allowing it “to recover financial damages from fossil fuel companies for the impacts of climate change” and New York adopted similar legislation. California may also finally do so, propelled by experts, civil society and survivors of wildfires.
Will more politicians muster the courage to join? They — and above
all their voters — will soon realise
they must.
Ian Duff
Co-Head, Greenpeace International’s Stop Drilling Start Paying campaign, London N1, UK