An environmental group called today for a cap on greenhouse gas emissions that it said is causing weather catastrophes that have destroyed the insurance market in coastal states.
That recommendation came from the Washington-based non-profit Environmental Defense group, which unveiled a report titled "Blown Away: Insurance Erosion in America's Coastal States."
The group said that after the 2004 and 2005 hurricane seasons, insurance companies were "fleeing America's coastlines, raising rates, and shrinking coverage for homeowners and businesses in the coastal states of America's Southeast and Gulf of Mexico coastal states. Where insurance is either unavailable or unaffordable, ever-greater numbers are turning to state-run insurers of last resort."
During a teleconference, Melissa Carey, climate change policy specialist for the group, said climate "impacts on insurance and the pocketbooks of average Americans."
Ms. Carey said what is needed to stop the global warming condition that is fueling bad weather is "a cap on greenhouse gas emissions."
Climate change, she said, can't be managed away. "We can't build a sea wall or put Florida on stilts." A cap requirement is needed, said Ms. Carey, "so businesses can manage emissions. The clock is ticking."
Short term, she said the steps that can be taken involve restoring coastal wetlands that serve as a barrier to storm surge and strengthening homes and businesses with better construction and protective measures such as storm shutters.
The report issued by the group catalogs the financial consequences to homeowners, businesses, governments and taxpayers of what it said scientists are calling a multi-decadal period of increasingly stronger and likely more frequent hurricanes.
The report contains sections with specific information about insurance in Florida, Louisiana, Texas, Mississippi, Alabama, Georgia, North and South Carolina, and Virginia. The report is online at www.environmentaldefense.org/hurricanes .
In a statement issued with the report, Ms. Carey said, "Losses from extreme weather events related to global warming are already substantial, and will get worse without action to reduce global warming pollution.
"The states are stepping up to the plate, but what's needed is concerted federal action in the form of a cap-and-trade regime to reduce emissions."
During the teleconference, she noted that yesterday the Senate Committee on Environment and Public Works had passed the bi-partisan America's Climate Security Act of 2007, which would set caps on greenhouse gas emissions.
The group's report noted a 2005 analysis by researchers at the Massachusetts Institute of Technology that found duration and wind speed from hurricanes had doubled in intensity since the 1970s, and drew a strong correlation between this intensity and the warming ocean waters. It mentioned that another study that same year reported the frequency of Category 4 and 5 hurricanes had also doubled as a result of warmer oceans.
The study quoted Robert Hartwig, president of the Insurance Information Institute's remarks that homeowner's insurance rates have climbed between 20-100 percent since Katrina two years ago, with increases on the lower end in relatively low-risk coastal areas like coastal New Hampshire, and the highest increases in high-risk areas like coastal Mississippi, Florida, and Louisiana.
Environmental Defense said its report includes previously unpublished data from an ongoing analysis by Georgia State University's Robert W. Klein, director of the Center for Risk Management and Insurance Research.
According to Klein's report, insurance premiums nationwide have risen an average 46.3 percent over the past five years, with Florida leading the way at an average of 77.3 percent. Six of the top 10 states with the largest average premium increases are states with coastal exposure.
Environmental Defense said that when states' insurer of last resort FAIR plans don't have enough money to cover claims, taxpayers and other policyholders pick up the tab–meaning that taxpayers and policyholders living away from the coast are subsidizing the insurance of those who live and work in high-risk areas.
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