Climate Change Risk on "Radar" of Insurance Regulators

The U.S. National Association of Insurance Commissioners NAIC) has adopted a proposal requiring insurance companies to disclose to insurance regulators climate change-related financial risks as well as explain what actions the insurers' are taking to mitigate those risks.

Joel Ario, Pennsylvania Insurance Commissioner and chair of the NAIC Climate Change and Global Warming Task Force, says:

"Climate change will have huge impacts on the insurance industry and we need better information on how insurers are responding to the challenge. As regulators, we are concerned about how climate change will impact the financial health of the insurance sector and the availability and affordability of insurance for consumers. This disclosure standard will give regulators the information we need to better understand these risks."

In the future companies generating more than $500 million in annual premiums will be required to file an Insurer Climate Risk Disclosure Survey. The first reporting deadline is May 1, 2010.

Richard O. Faulk, who leads Gardere Wynne Sewell's climate change task force, writes in The Electricity Journal ("Lifting the Veil: Pressures Mount for Climate Change Disclosures," July 2009, p. 59) that the rule in effect enlists "the insurance industry as a 'partner' in the promotion, effecuation, and enforcement of global and national climate change policies."

Businesses simply cannot afford to look the other way when it comes to climate change-related pressures. They are facing up to this (however reluctantly) in the European Union and they better "get on the stick" everywhere else as well. In the U.S. insurance industry, the days of looking the other way are over. Period. Full stop.

Coal State Senators Casey and Enzi Introduce Legislation to Promote Carbon Capture and Sequestration

U.S. Senators Robert Casey, Pennsylvania Democrat, and Mike Enzi, Wyoming Republican, have introduced legislation, the Carbon Storage Stewardship Trust Fund Act of 2009, to "remove a major barrier to private investment in carbon capture and storage."

The major barrier? The long-term liability of carbon storage. Pennsylvania and Wyoming are big coal producing states, and the two senators are keen to protect the interests of their constituents. If a carbon capture and sequestration (CCS) approach can be put into place so that electric utilities can continue to burn coal without emitting carbon dioxide, so much the better for the coal states. At least that is what Senators Casy and Enzi seem to think.

According to the senators:

"A liability framework is needed that will encourage firms to invest in CCS but that will not relieve the private sector of the responsibility for ensuring that best practices are followed. The purposes of this act are to promote the commercial deployment of CCS through the creation of a carbon storage liability trust fund and the sharing of liability between the private sector and the federal government."

Hum...The words "sharing liability" have a funny ring to them.

Sounds as if the senators are asking "big government" to bail out the CCS developers if things go wrong. Would this logic not also apply to a small business person who was taking a chance on a concept that might go bad? Is the federal government going to "share the liability" with these small folks?

No one will ever accuse me of being an economics major, but I thought that private business liked to keep the government at arm's length and that part of the free market system was the freedom to succeed as well as fail. Of course, I'm not being serious but the next time Senators Casey or Enzi rail against "big government," will someone remind them that they are being rather selective when they complain about government programs?

European Union Environment Ministers Call for Climate Change Talks to be Accelerated

Swedish Environment Minister Andreas Calgren said last week that preparations for the U.N. sanctioned climate change meeting in Copenhagen in December must be accelerated. Click here to see Mr. Calgren's comments. From July 1 to December 31 Sweden is serving as president of the European Union, and as such the Swedish ministers speak on behalf of their other EU ministerial colleagues.

Introducing a New Blog Feature: "Meet Our Graduates" Video Interviews

Prospective students frequently contact us about the graduate program. They ask many good questions including: Where are the students from? What do they learn about? What advice do we have for those who are considering the program?

In response to these questions and many more, we will begin posting a series of "Meet Our Graduates" video interviews where those curious about our program can hear first-hand from those who have experienced it.

The first video is with Noemi Nunez, who was born and raised in Mexico and earned her law degree from La Universidad Valle del Bravo in Nuevo Larado, Mexico. In May 2009 she graduated with her LLM in Environmental and Natural Resources Law & Policy. Ms. Nunez provides a personal perspective on program broadly and more specifically what it meant to her.

Stay tuned. We'll be posting more video interviews soon.

Alstom CEO Speaks About Carbon Capture and Sequestration

If the world is going to limit greenhouse gas emissions, it is likely that carbon capture and sequestration (CCS) may play a role.

Pierre Gauthier, Alstom's American CEO, spoke recently to E&ETV's OnPoint program ("Carbon Capture: Alstom's Gauthier Discusses Successful Wisconsin Project," July 21, 2009) about the challenge of CCS.

Among other things, Mr. Gauthier explains three different technologies being used by Alstom.

Sweeping Environmental Law Reforms Approved in France

Last week, the French parliament approved a major overhaul of the country's environmental standards. As reported in The Globe and Mail ("France Passes Sweeping Ecology Law," July 23), "The law stemmed from months of negotiations among environmental activists, farmers, industry officials and bureaucrats in 2007 to work out what President Nicholas Sarkozy called an environmental 'new deal' for France."

Les Verts, the French Green Party, opposed the measure arguing that it do not go far enough.

(Muchas gracias a Sergio Stone, Foreign, International and Comparative Law Librarian at the Stanford Law School for calling this to my attention.)

Colorado Gov. Bill Ritter Testifies Before Congress About "New Energy Economy"

Colorado Gov. Bill Ritter testified recently about the "new energy economy" before the U.S. Senate Committee on Environment and Public Works. Mr. Ritter was joined by governors from other states including Jon Hoeven of North Dakota and Christine Gregoire of Washington.

According to Mr. Ritter, "The new energy economy is energizing Colorado's entire economy, even in the worst downturn in 75 years. This did not happen by accident. It happened through a concerted and aggressive effort, and the new jobs we're creating are real and they are happening in every corner of Colorado."

Mr. Ritter, who was recently ranked by Greenopia as the top state governor for environmental responsibility, said, "We must hand over a world that is more energy secure, more environmentally secure, and more economically secure than it is today.

Now this purpose of this blog is not to promote Mr. Ritter's -- or anyone's -- personal agenda. But it is noteworthy as yet another indication that Colorado is at "ground zero" for renewables, energy efficiency, and the firms that are pushing these into the marketplace.

And before closing, it is worth noting that one of the pioneers in establishing Colorado's renewable energy portfolio -- which was approved by state voters in a 2004 referendum -- was Lola Spradley, the former Speaker of the Colorado House of Representatives. Mr. Ritter is a Democrat; Ms. Spradley a Republican. Speaking conceptually, renewable energy doesn't really have much time -- at least in Colorado -- for party labels.