As climate change becomes more apparent and the intensity and frequency of extreme weather events become higher, insurance companies are having to face additional and very often unforeseen losses.
It is surprising that although the insurance industry is heavily dependant on scientific predictions and research, the sector has not been involved in any discussions related to carbon taxes or climate change mitigation strategy planning.
Earlier this week, The Green Optimistic reported that levels of carbon dioxide in the atmosphere have reached the record 400 ppm. Scientists claim that the consequences on polar ice and sea level could be irreversible causing severe floods and numerous property damages.
The good news for insurance companies is that the federal government covers the flood and crop insurances. This is probably one of the reasons why the industry has not taken part in discussions on carbon tax.
Many experts also believe that the insurance industry has not yet experienced major losses due to climate change, hence they have only been focused on disaster mitigation and zoning rules.
Nevertheless, the business is certain about one thing. Climate change is happening and carbon tax should be included as a topic in future insurance polity discussions.
Federal crop insurance, federal flood insurance, and FEMA are equal to disaster taxes already imposed upon Americans. Rather we should impose a tax on fossil fuels, and then refund that tax to Americans. That would bend the economy away from the disaster taxes. Also, Americans pay as much as $.18/kwh for adverse health costs due to coal pollution, from a Harvard Med SChool study. We don’t see these costs, but they are there.
As Dylan once wrote, “the executioners face is always well hidden”.