AS A citizen, Dave Jones worries that climate change may imperil his two children, and theirs in turn. What exercises him, as California’s insurance commissioner, is the way in which a transition to a low-carbon economy might affect the financial health of the state’s 1,300-odd insurers. On May 8th he unveiled an examination of how well the portfolios of the 672 insurers with $100m or more in annual premiums align with the Paris climate agreement of 2015, in which world leaders vowed to keep global warming below 2°C relative to pre-industrial times.
The answer is, not very. In the next five years carbon-intensive firms in those portfolios plan to produce more internal-combustion engines and coal-fired power than the maximum the International Energy Agency (IEA) reckons is compatible with meeting the 2°C goal (see chart). Meanwhile, investment plans in renewable energy and electric vehicles lag behind the IEA’s projections of what is needed.
The results echo those of a study last year by Swiss authorities of the portfolios of...Continue reading
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