Nations of the world will need to come to grips with climatechange and seek ways to cut carbon emissions while fulfilling thegrowing need for energy consumption—all of which spells growthopportunities for insurers, a new report says.

Swiss Re, in its latest report, “Building aSustainable Energy Future: Risks and Opportunities,” lays outsix scenarios under which nations will implement plans to deal withcarbon emissions from fossil fuels.

Swiss Re says that no matter what strategy the world adopts tocut carbon emissions, total abandonment of fossil fuels is not anoption. In fact, the report says, “fossil fuel energy will remainthe dominant energy source for power generation for quite sometime.”

However, there is no escaping the need to reduce greenhousegases, the report says.

Andreas Spiegel, head of Sustainability and Political Risk atSwiss Re, and the report's author, says in a statement that“adaptation to climate change will increase in importance becausethe window of opportunity for mitigating climate change is gettingmuch narrower.”

For insurers, the change in the energy landscape will presentnew opportunities. The need for energy growth will be most acute inAsia, which is expected to account for 50 percent of annual globalenergy financing by 2030.

Depending on which climate change mitigation policies areadopted in the future, expenditures on technology to deal with theissue are predicted to rise from $4.3 trillion in 2010 to somewherebetween $4.6-$6.1 trillion by 2030.

The total annual expected loss across all energy technologies,fossil, renewable and carbon capture and storage, in 2010 was $19.5billion, with $900 million attributable to renewable energy. Thatfigure is expected to increase substantially by 2030 to $25.6billion and in the “greenest” scenario more than double to $41.7billion, says Swiss Re.

“Much of this increase is due to higher investments in newer andless mature technologies, including renewables,” the reportsays.

“Insurers should support the further development of lowcarbon-intensive power production,” says Agostino Galvagni, CEO,Swiss Re Corporate Solutions. “They need to be innovative andprovide solutions along the whole value chain. For example,insurers can enable project financing through constructioninsurance and reduce cash flow volatility of intermittent energyproduction through weather risk transfer solutions.”