Yesterday, Pilita Clark, Environment Correspondent of the Financial Times, reported that the Bank of England is to examine the risks fossil fuel companies pose to the financial stability of the insurance industry which underwrites all others:
“Mark Carney, its governor, has written to the which has been investigating the issue, informing them that his officials have discussed the idea that most of the world’s proven coal, oil and gas reserves may be “unburnable” if global warming is to be kept within safe limits”.
Mr Carney expects that the Financial Policy Committee, which is responsible for identifying and reducing systemic financial risks, “will also consider this issue as part of its regular horizon-scanning work on financial stability risks.”
Joan Walley, chairwoman of the Environmental Audit Committee, said, “Policy makers and now central banks are waking up to the fact that much of the world’s oil, coal and gas reserves will have to remain in the ground unless carbon capture and storage technologies can be developed more rapidly. It’s time investors recognised this as well and factored political action on climate change into their decisions on fossil fuel investments.”
The Bank of England has asked insurers if they knew when changing temperatures or more frequent extreme weather disasters might start affecting the viability of their business model.
The FT article – free registration: http://www.ft.com/cms/s/0/189f21d8-7737-11e4-a082-00144feabdc0.html#axzz3KcrcDzI7
Long term insurance anxieties: Worldwatch: http://www.amazon.com/Vital-Signs-1997-1998-Trends-Shaping-ebook/dp/B00JVSJOCW#reader_B00JVSJOCW – from our database:
“Vital Signs 1997 issued by the World-Watch Institute in Washington, lists and gives the total cost of last years’ droughts, hurricanes and flooding at $60bn, almost twice as high as the 1995 record.
“Its vice-president is reported as being ‘inclined to blame global warming’ as being the underlying cause of this record damage – the report noting that emissions of carbon dioxide, the primary cause of global warming, reached a new record last year.
“Figures collected by the Munich Reinsurance Company show that losses from weather-related disasters had totalled more than $200bn in the last six years – four times as much as in the whole of the 1980s. (Geoffrey Lean, Independent on Sunday: 1.6.97)”.