Climate Change and the ‘Fire Insurance Predicament’

February 8, 2018 by

A Washington-based conservative group is suing for information on the U.S. government’s “backstage work” on the Paris agreement it says will help pave the way for President Trump’s withdrawal from the agreement.

The Competitive Enterprise Institute recently filed a lawsuit in Washington, D.C., challenging the U.S. State Department’s refusal to act on a series of Freedom of Information Act requests the group made.

The CEI is seeking documents related to the government’s use of outside individuals and groups, called “validators,” to promote the Paris climate agreement under the Obama Administration, and its use of an encrypted instant messaging service during the November 2017 Bonn conference on the UN’s climate change framework convention.

“This information is important to the American public, as the Trump administration still needs to develop a plan and timeline for withdrawing the United States from the Paris Agreement,” CEI General Counsel Sam Kazman said in a statement. “Americans should know the extent to which the State Department orchestrated outside experts and groups in pushing talking points about the need for the Paris Agreement and its alleged nontreaty status.”

According to his statement, the group has information that “strongly suggest the State Department has something serious to hide regarding its attempts to grease the skids for the energy-crippling climate plan that President Trump has rejected.”

The group says the government used the term “validators” to refer to unpaid outside voices that “provide an onslaught of positive ads” to support agency initiatives, and write so-called good news opinion articles.

The complaint seeks the information the group requested and details four FOIAs the group says were not responded to by the government, as well as attorney’s fees and litigation costs.

The CEI has been busy. It also recently sent a letter to the Securities and Exchange Commission urging it to investigate a group of cities and counties in California for making contradictory claims about climate risks.

The letter accuses California officials of downplaying the risks of climate change to bond investors while citing those same risks as the basis for a lawsuit against oil companies.

“In these lawsuits the plaintiff cities and counties apparently describe these climate risks in ways that are far different than how they described them in their own bond offerings,” states the letter, dated Feb. 1. “In our view, this inconsistency raises serious questions of municipal bond fraud.”

Climate change and wildfires

Climate change has created a “wildfire crisis in California,” which in turn is “causing a fire insurance predicament.”

Thomas Elias, a syndicated columnist, penned an opinion article that appeared just over a week ago in the San Diego Tribune that addresses the effects climate change-driven weather patterns have had in fire-ravaged parts of the state.

Elias draws on public comments by Gov. Jerry Brown, who has repeatedly pointed out that the state’s fire season, which traditionally lasted a few months, has now extended into in December. California Insurance Commissioner Dave Jones announced at the end of December that insurers had received nearly 45,000 insurance claims totaling more than $11.79 billion in losses from the wildfires that burned across the state in October and December 2017.

“This crisis is real, but it’s not yet widespread even though some homeowners have already gotten notices of non-renewal from insurance companies,” Elias writes. “Those are likely harbingers of many more to come.”

He noted that insurance companies aren’t required to renew policies in non-disaster areas when they expire and they don’t have to renew homes in disaster areas more than one year beyond current policy expirations.

“These rules mean there is a crisis, spurred largely by new weather conditions that have broadened areas rated as fire-prone,” he writes.

Elias offered data that following the massive fires in Southern and Northern California that the number of Fair Plan policies climbed in 2017, and likely will again this year.

Jones has publicly worried that insurers may start to back off writing insurance in some areas, which Elias views as a potentially ominous sign for some California homeowners.

“All of which means climate change now is impacting wallets, forcing an insurance crisis in both proven and potential fire disaster areas,” he writes.

Disclosures

A new climate report released by ExxonMobil that explores the risks the company would face in a low-carbon transition represents “a significant step forward for institutional investors who have long engaged with the company on climate change but falls short on key details,” Andrew Logan, director oil and gas, at sustainability advocate Ceres, said in a statement this week.

Ceres is the Boston-based group pushing for more climate disclosures across several industries, including the insurance industry. Ceres has stood by efforts like Jones’ Climate Risk Carbon Initiative, which includes information on the amount of oil, gas, coal and utilities investments held by insurance companies, and whether the insurers have divested from thermal coal, the amount of thermal coal divested and any future commitments to divest.

The ExxonMobil report, 2018 Energy & Carbon Summary, has “adopted a whole new climate-related frame,” according to Logan, who said it has provided the “clearest accounting yet of how Exxon is—and is not—planning for a low-carbon future.”

Logan hailed Exxon’s report as the most detailed disclosure to date on how a low-carbon transition would impact the company, including the potential for high-cost resources to be stranded.

“The report makes clear that, unlike many of its competitors, Exxon views climate change as a very long-term challenge rather than as a near-term threat,” a release from Ceres addressing the report states. “Its Energy Outlook, released the same day as the Energy and Carbon Summary, anticipates a future where the world fails to fulfill the goals of the Paris Agreement to keep global warming “well below” 2-degrees.

Idaho Climate Change

The Idaho House Education Committee voted last month 12-4 to strip references to human-caused climate change from the state’s proposed new science education standards.

The motion, proposed by Rep. Scott Syme, R-Caldwell, strikes a section from the Idaho Content Standards that includes the language to the effect that usage of energy and fuels from natural resources affects the environment, environmental news website EcoWatch reported.

According to EcoWatch, Boise Republican Rep. Patrick McDonald, the committee’s vice chairman, joined the panel’s three Democrats in opposition.

“I want to support these standards as written,” McDonald said. “What I don’t want to do is not support them. There has been a lot work involved in putting these things together.”

The New York Times is reporting that the move hasn’t gone unnoticed.

“Now teachers, parents and students are pushing back, hoping to convince the Republican-controlled Idaho Legislature to approve revised standards, which science proponents say are watered down but would still represent a victory for climate-change education in the state,” an NYT story out this week states.

According to that article, Idaho is the only state legislature to strip all mentions of human-caused climate change from statewide science guidelines while leaving the rest of the standards intact.

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