The Tab For Climate Change
Online Extra for June 2009 Magazine Article: Capping Carbon
By Glen Andersen
Although uncertainties surround climate models and the costs that climate change may impose on society, a broad array of scientific institutions agree human activities are contributing to climate change.
It is possible that these institutions are wrong and that human greenhouse gas emissions have little or no effect on the Earth's climate. When assessing potential costs, it is important to gauge the probability that all of the research is wrong. For conjecture, if there were just a 50 percent probability that climate scientists are correct in their predictions, then there still remains a clear risk, and therefore a cost, to emitting greenhouse gases.
When businesses or state governments have to function under uncertainty, operating costs increase as they expend extra resources to protect themselves from a range of potential outcomes. In some regions of the United States, the insurance industry is beginning to charge for climate change risk. The industry has experienced tremendous losses because of more frequent and intense storm activity in states such Florida, Texas, Louisiana and New Jersey.
Allstate, one of the companies that now includes climate change in its risk models, is finding that insurance for property in many coastal regions is not profitable. The company no longer writes new policies for property owners in high weather-related risk areas of New Jersey and various other coastal states. It also is raising the rates in some of these regions to account for the increased risk of damage posed by climate change.
Climate change has caused losses in a number of states already: land loss from sea level rise in coastal states such as North Carolina and Florida; massive forest loss from pine beetle infestation in Colorado and Wyoming caused by warmer winters; and drought in the Southeast and Southwest which many climatologist believe are attributable to climate change.
For more on costs of climate change, see NCSL's publications on the costs of climate change.