Jan 5, 2017 by

A new approach to climate change: As business risk insurance

A new approach to climate change: As business risk insurance
© Getty Images

With the proposed appointment by President-elect Donald Trump of climate denier, Oklahoma Attorney General Scott Pruitt to head Environmental Protection Agency (EPA), and so many of other climate deniers and doubters proposed for key environmental positions, I suggest a new approach be proposed to him and to them.

I propose that action on climate change be treated as an insurance policy to insure the country and world against the risk that 95 percent of the world’s climate scientists may be right that human-caused global warming will threaten the future of the planet and our children and grandchildren if not mitigated. This insurance approach should be appealing to President Trump and the business men who support him.

Businessmen and individuals insure against all kinds of threats that they do not expect to happen to them. Thus, businesses, homeowners, drivers, virtually everyone, insures against fires, thefts, floods, liability and many other risks that will cause them large financial losses should  they occur. Businesses and governments routinely insure against unexpected events — they call it risk management.

Therefore deniers should not feel excused from joining the rest of the world in taking climate mitigation action even if the risks which the proponents warn against may never occur. Particularly since the consequences of those risks are so staggering.

For example, many countries are having great difficulty coping with refugees from the devastation of ghastly wars, and President-elect Trump campaigned to stem immigration into the United States alleging resulting job losses and security threats.  Yet if sea levels rise as predicted by the scientific majority, the refugee problem will be many times that now being experienced from climate refugees who have been displaced.

I cannot imagine that the deniers are prepared to take responsibility for the devastation that will occur should they be wrong — the millions of displaced people, disruption of agriculture causing massive starvation, spread of tropical diseases to areas not now experiencing them, expanded hurricanes, tsunamis and tornadoes, floods, droughts and fires, causing huge loss of life and property requiring enormous expenditures to remediate.

The U.S. military views the consequences of such risks to be a major threat to national security. Surely the Administration, so security conscious, does not want to bear responsibility for national security disasters that may occur should their view of climate change prove to be wrong.

Furthermore, the measures required to mitigate greenhouse gas emissions are also the same needed to avoid deadly air, water and land pollution. Does the new Administration want to allow the people of our cities to be asphyxiated by air pollution, causing massive asthma and lung cancer that result in huge medical expenses and early loss of life?

Lastly, consider that the Paris climate agreement, from which the incoming Administration contemplates withdrawing, was signed by all the 190 nations of the world.  Does the President-elect and his minions really want to start their governance by thumbing their noses at the entire rest of the world? Surely there will be repercussions. Also, the agreement was achieved by the joint initiative of the United States and China.  Does the new Administration want to hand to China the mantle of this world leadership?

Now, the proposed appointment as Secretary of State of Exxon Mobile’s CEO will be a poke in the eye to the whole world; if that proceeds; he will be as welcome as a toothache to virtually all the countries of the world, except perhaps Russia;  and the US will become the world’s pariah. Is that what Trump really wants?

In the improbably event that the deniers are right and these catastrophic consequences do not occur, how wonderful that would be!  But would any prudent business executive ignore these risks and take responsibility for failing to insure against their occurrence? I doubt it.

The President-elect and his fellow climate deniers should reconsider and institute insurance against such terrible consequences. It has been determined conclusively that the costs of failure to take action will be many times of the costs mitigation. And today energy efficiency and solar energy technology are so cheap that substantial savings can be achieved by transitioning to them. The deniers should revert the time-honored adage that an ounce of prevention is worth a pound of cure.

Richard Ottinger, Former Member of Congress & Chair, Energy, Conservation & Power Subcommittee; Chair, IUCN Energy & Climate Change Specialty Group, World Commission on Environmental Law; Dean Emeritus, Pace Law School.

The views expressed by contributors are their own and not the views of The Hill.

1 Comment

  1. the international insurance business – like the big re-insurance companies Munich re and Swiss re have been working on risks and climate change for years. Insurance is already more expensive in most vulnerable places. Insurance is a good strategy. Insurance companies are professional risk assessors, and they live from putting price tags on risks..
    I would assume that decision makers who fail to take obvious precautionary measures should expect to be asked to pay compensation to those who suffer from those negligent decisions in a court of law. https://agreenerfutureblog.wordpress.com/6-greener-future/6-3-greener-law/

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