President Donald Trump has withdrawn from the global climate change agreement, the Paris Accord.
The decision means the United States joins Syria and Nicaragua as the only three countries not signed up to counter global warming. Even North Korea is a member in the agreement.
The decision was announced at 3pm today at the White House, and marks a political departure from the environmental course of the Government’s previous administration. The decision was not unexpected from the president, who had hinted all week that the country – under his command – would leave the 200-nation climate pact.
Trump had already moved to eliminate regulations on power-plant emissions, rethink automobile fuel efficiency standards and slash research spending on energy breakthroughs. And exiting the Paris pact eliminates one last check on his administration jettisoning any and all climate policies.
The implications of the decision for the insurance world – and US insurance firms in particular – could be huge.
More and worst forest fires, more severe storms, wilder weather, droughts, irregular crop production, lost fish stocks, global conflict, and sea-level rises have all been attributed to global warming. These all have serious impact on the insurance industry – especially on claims pay-outs.
Withdrawing from the 2015 pact of almost 200 nations could also dissuade foreign investors from taking part in US clean-energy projects, risk retaliation on US exports, and make it harder for future presidents to enter into similar climate deals.
In recent years, many studies have been conducted by scientific researchers showing the damage continuing global warming can have. The implication for insurance is clear.
One recent study showed that human-induced climate change has caused forest fires to double in terms of area in western US in the past 30 years. The study was published in the journal Proceedings of the National Academy of Sciences. The authors said that since 1984, increasing temperatures and the resulting dryness had caused fires to cover 16,000 more square miles than they otherwise would have. That area is larger than the states of Massachusetts and Connecticut combined.
“No matter how hard we try, the fires are going to keep getting bigger, and the reason is really clear,” said study co-author Park Williams, a bioclimatologist at Columbia University’s Lamont-Doherty Earth Observatory. “Climate is really running the show in terms of what burns. We should be getting ready for bigger fire years than those familiar to previous generations.”
Research from the University of British Columbia published in Scientific Reports suggested last year that the global fisheries industry could lose $ 10 billion in annual revenues by 2050 if climate change continues unabated.
And in 2015, executive secretary of the United Nations Framework Convention on Climate Change Christiana Figueres warned, specifically, that the global insurance industry was not prepared for the unprecedented risks associated with climate change.
Figueres had some sobering words for the global industry: “We have increased frequency, severity and scale of impacts because of globalization and the ‘domino effect’ it has. And the insurance industry is not ready for that yet. The insurance industry is ready to take on weather impacts, but not ready to take on climate change. They are not the same thing.”
Although Berkshire Hathaway tycoon Warren Buffet has suggested in the past that climate change could benefit his shareholders, the opinion is not roundly shared among the industry, and has been criticised as irresponsible by environmentalists.
– Additional comment: Bloomberg
Economic costs of climate change could be much worse than thought
Climate change doubles US forest fires: study