INSURERS MAY CASH IN ON CLIMATE PANIC

A good excuse to sell policies and put their rates up

Climate change isn't just a crisis. It's a business opportunity--at least in the view of insurance industry leaders, who are mapping out a strategy that could force the rest of the economy to grapple with global warming as never before.

American International Group, the world's largest insurer, announced two weeks ago that it was "actively seeking to incorporate environmental and climate change considerations across its businesses." It is developing new products to respond to the global drive to reduce carbon dioxide emissions. Last month, the No. 1 insurance broker, Marsh & McLennan, distributed a white paper to a roster of Fortune 500 clients, suggesting that corporations ranging from soft-drink companies to banks may need to respond to global warming or be left out in the cold.

These are the first such moves by U.S. insurers, but in Europe, giant reinsurers like Swiss Re have long been active in the Kyoto Protocol, under which 36 nations have been participating in a market-based system to cut carbon dioxide. The phenomenal growth of that fledgling market, coinciding with last year's record claims due to the violent Gulf Coast hurricanes, has focused insurers on the money that could be made--or lost--on climate change. That's a welcome development for environmentalists. "They are a high-leverage, high-impact industry," says Mindy Lubber, president of the shareholder activist group Ceres. Ceres coordinates the Investor Network on Climate Risk, institutional investors who manage $3 trillion in assets and have been pushing for insurers to become advocates on the issue, much as they pushed successfully in the past for fire codes or auto safety regulations.

Many attribute insurers' new climate awareness to the record $55.3 billion in natural disaster losses they sustained in 2005, double the previous high point set just the year before, with Hurricane Katrina leading the pack.

Retreating.

Insurers certainly are pushing through massive rate increases on the southeastern coast of the United States, retreating from some areas altogether, but the companies maintain that these are standard underwriting decisions, separate from their climate change activities. "We don't make the leap where we are saying that we endorse the idea that hurricanes are a direct result of global warming or that global warming is a direct result of human activities," says Chris Winans, an AIG vice president. "But we take the possibility seriously."

The climate strategies the insurers have spelled out aren't about avoiding losses; they're about generating revenue. For example, AIG aims to get in on Europe's carbon-trading scheme, a market valued at $10 billion last year and, although climbing out of a precipitous fall a few weeks ago, one that is expected to surpass $25 billion in 2006. Even though the United States has not signed on to Kyoto and does not participate, AIG says it will invest in projects around the globe aimed at generating credits to trade on this market. (Buyers would be factories or power companies that are struggling to meet their emissions limits under the treaty.)

Karl Schultz of the consulting group Energy Edge in London says there's "something of a feeding frenzy" of investors clamoring for United Nations approval of their green energy projects so they can trade credits. "Now you're seeing a whole new breed of people coming out of the more traditional financial institutions--the pure business suits as opposed to suits that carry the green badge," Schultz says. AIG also wants to advise corporations, consulting with them on how to get into the carbon market and even developing a new insurance policy to protect against the risk of a project's failure to generate tradable credits.

Lawsuit risk.

Insurance broker Marsh also is positioning itself as a corporate consultant on climate change, which it regards as a "megatrend risk," along with terrorism or pandemics. Marsh dispatched six executives on a leadership building/climate awareness expedition to Antarctica this year. The firm's white paper warned that beverage companies will need to be concerned about water availability in case of drought, and banks will have to worry if they have high-risk loan portfolios. Most significant, Marsh warned that it was unlikely that companies' current environmental policies would protect against lawsuits over climate change.

Courts so far have rejected carbon claims against energy firms, but future lawsuits may be a more predictable risk than hurricanes.

Swiss Re has been talking about similar ideas for more than a decade--perhaps not surprisingly, since as a reinsurer it takes on much of the catastrophe risk from front-line insurers. The company is now in the forefront of some potentially profitable businesses, such as the global market in weather derivatives, which mushroomed from $8 billion to at least $40 billion in just the past year. These financial instruments allow energy companies, farmers, and other businesses dependent upon weather (an estimated 30 percent of the U.S. economy) to hedge the risk of excessively hot conditions or drought. "Wherever there is a risk," says Ivo Menzinger, head of sustainability for Swiss Re, "there is also an opportunity."

Of course, for those who buy insurance industry services, that also means new costs. Forget what's happening in Washington, D.C. The incentive for climate change action may come not from politicians but from a marketplace that is already raising the price of protection.

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NUCLEAR POWER GENERATORS WANT REWARDS FOR BEING NON-POLLUTERS

EDF Energy chief Vincent de Rivaz has stated that financial backing for new nuclear build would require nuclear power to be classified as a non-carbon-emitting form of generation within the European emissions trading scheme (ETS). However this would then amount to a subsidy of nuclear by fossil-fuelled power plants.

Currently nuclear power is not an active element within the EU ETS due to its negligible emissions of greenhouse gases while operating. Instead, the operators of nuclear fleets benefit in indirect ways from the scheme through higher prices for power, a reduction in the competitiveness of competing thermal generators and the absence of legal restrictions on their annual output.

However, what Mr de Rivaz has argued is that nuclear power's formal inclusion in the scheme would provide it with additional financial security as it may then be issued with certificates giving the right to emit. These credits would not be needed by nuclear plants and could be sold on to other ETS emitters, creating an additional revenue stream for nuclear as well as enhancing its financial security for investors and creditors, although the lack of certainty past 2012 may well be cause for concern.

It is not immediately clear whether the ETS should be changed to accommodate nuclear, or if these credits would be better parceled out purely at a national level by adjusting each state's national allocation plan (NAP). Each state within the EU has allocations set aside for installations that are expected to be built before the planned end of the first phase of the ETS. If some of these credits were given to the builders of new nuclear plant, it would avoid having to take credits already allotted to existing coal and gas power stations away.

While moves like this would enhance the attractiveness and likelihood of new nuclear build, this move would be opposed by almost all of the companies that either do not want to, or are unable to, participate in the building of new nuclear plant. Operators of thermal stations will correctly point out that the money that they will have to pay to purchase these credits will amount to a subsidy for nuclear and renewable generators are likely to claim that they should also be entitled to free credits.

Governments have the unenviable task of balancing commercial, environmental and security of supply issues against each other to decide upon an optimum fuel mix. With additional thermal generation currently "business-as-usual" in many countries and thermal plants receiving emission credits for free, many commentators argue that the incentives need to be changed to encourage diversity.

Yet changing the incentives amounts to moving the goalposts for energy companies as well as the instant revaluation of their asset base, a move that would surely spark further disputes about conflicting interests in the marketplace.

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More on the Tropical Arctic of the Past

New York Times article below:

The first detailed analysis of an extraordinary climatic and biological record from the seabed near the North Pole shows that 55 million years ago the Arctic Ocean was much warmer than scientists imagined - a Floridian year-round average of 74 degrees. The findings, published today in three papers in the journal Nature, fill in a blank spot in scientists' understanding of climate history. And while they show that much remains to be learned about climate change, they suggest that scientists have greatly underestimated the power of heat-trapping gases to warm the Arctic. Previous computer simulations, done without the benefit of seabed sampling, did not suggest an ancient Arctic that was nearly so warm, the authors said. So the simulations must have missed elements that lead to greater warming.

"Something extra happens when you push the world into a warmer world, and we just don't understand what it is," said one lead author, Henk Brinkhuis, an expert on ancient Arctic ecology at the University of Utrecht in the Netherlands.

The studies draw on the work of a pioneering 2004 expedition that defied the Arctic Ocean ice and pulled the first significant samples from the ancient layered seabed 150 miles from the North Pole: 1,400 feet of slender shafts of muck, fossils of ancient organisms and rock representing a climate history that dates back 56 million years. While there is ample fossil evidence around the edges of the Arctic Ocean showing great past swings in climate, until now the sediment samples from the undersea depths had gone back less than 400,000 years.

The new analysis confirms that the Arctic Ocean warmed remarkably 55 million years ago, which is when many scientists say the extraordinary planetwide warm-up called the Paleocene Eocene Thermal Maximum must have been caused by an enormous outburst of heat-trapping, or greenhouse, gases like methane and carbon dioxide. But no one has found a clear cause for the gas discharge. Almost all climate experts agree that the present-day gas buildup is predominantly a result of emissions from smokestacks, tailpipes and burning forests. The samples also chronicle the subsequent cooling, with many ups and downs, that the researchers say began about 45 million years ago and led to the cycles of ice ages and brief warm spells of the last several million years.

Experts not connected with the studies say they support the idea that heat-trapping gases - not slight variations in Earth's orbit - largely determine warming and cooling. "The new research provides additional important evidence that greenhouse-gas changes controlled much of climate history, which strengthens the argument that greenhouse-gas changes are likely to control much of the climate future," said one such expert, Richard B. Alley, a geoscientist at Pennsylvania State University.

The $12.5 million Arctic Coring Expedition, run by a consortium called the Integrated Ocean Drilling Program, was the first to drill deep into the layers of sediment deposited over millions of years in the Arctic. The samples were gathered late in the summer of 2004 as two icebreakers shattered huge drifting floes so that a third ship could hold its position and bore for core samples.

Estimates of the prevailing temperatures in the different eras represented by the sediments were made in part by tracking the comings and goings of certain algae called dinoflagellates that typically indicate subtropical or tropical conditions. Because the samples lacked remains of shell-bearing plankton that are usually relied on to provide temperature records, the researchers used a newer method for approximating past temperatures: gauging changes in the chemical composition of the remains of a primitive phylum of microbes called Crenarchaeota. Some scientists familiar with the research said that while there were still questions about the precision of this method at temperatures like those in the ancient Arctic Ocean, it was clear that the area was warm.

The temperatures recorded in the samples, right through the peak of warming 55 million years ago, were consistently about 18 degrees higher than those projected by computer models trying to "backcast" what the Arctic was like at the time, according to one of the papers.

Another significant discovery came in layers from 49 million years ago, where conditions suddenly fostered the summertime growth of vast mats of an ancient cousin of the Azolla duckweed that now cloaks suburban ponds. The researchers propose that this occurred when straits closed between the Arctic Ocean and the Pacific and Atlantic Oceans. The flow of water from precipitation and rivers created a great pool of fresh water, but about 800,000 years after the blossoming of duckweed began, it ended with a sudden warming of a few additional degrees. The researchers suggest that this signaled when shifting land formations reconnected the Arctic with the Atlantic, allowing salty, warmer water to flow in, killing off the weed.

The researchers said the sediments held hints that Earth's long slide to colder conditions, and the recent cycle of ice ages and brief thaws, began quite soon after the hothouse conditions 50 million years ago. A centerpiece of their argument is a single pebble, about the size of a chickpea, found in a layer created 45 million years ago. The stone could have been deposited on the raised undersea ridge only if it had been carried overhead in ice, said Kathryn Moran, a chief scientist on the drilling project, who teaches at the University of Rhode Island. The stone was probably embedded in an iceberg or perhaps a plate of sea ice that tore free from a gravelly shore. It sank as the ice melted or broke apart, Dr. Moran proposed. Such "dropstones" have long been used to date when an oceanic region has been ice covered or ice free.

The amount of ice-carried debris in the sediment layers began to increase about 14 million years ago, the scientists said. That is also about when the great ice sheet that now weighs down eastern Antarctica originated, Dr. Moran noted. In general, the results from the Arctic drilling project suggest that the cooling and ice buildup at both poles happened in relative lockstep. This simultaneity tends to support the idea that the cooling was caused by a drop in concentrations of carbon dioxide and other heat-trapping gases, which mix uniformly in the global atmosphere, said Dr. Moran and other members of the team.

Julie Brigham-Grette of the University of Massachusetts, an expert in past Arctic climates who was not connected with the new studies, cautioned against giving too much significance to the single sample, and particularly the single stone from 45 million years ago. Dr. Brigham-Grette said it was vital to try to mesh the new core results with data gathered around Arctic coasts, where there is plenty of evidence for warm conditions in at least some places as recently as 2.4 million years ago. Despite her doubts, she said, the project was a stunning achievement. "It's all very, very exciting to me, because now we can start to rewrite the history of the Arctic," Dr. Brigham-Grette said. "It's like working a giant landscape puzzle of 500 pieces. For a while we only had 100 pieces. Now we have 100 more, and the picture is getting clearer."






Australia: Crazy Greenie-inspired use of dammed water

Dam water is used to keep rivers flowing while severe restrictions are placed on water use by people



Severe water restrictions were introduced in Canberra because more than half its supplies were pumped into rivers downstream. A report from the Canberra branch of Engineers Australia said environmental flows last year from two key reservoirs to maintain the Cotter and Queanbeyan rivers had "seriously reduced the total quantity of water held in reservoirs". "As a result, it has been necessary to impose severe restrictions on water used by ACT and region consumers," the report said.

Since the report was written, the ACT has come out of the drought, the Government has reduced its environmental flows, making more water available to the community, and water has been sent from the Cotter River to the Googong River. A spokeswoman for Chief Minister Jon Stanhope said yesterday: "A lot has changed since then." A 2004 ACT Government report found that the ACT was allocating more than half of its total water resources to environmental flows, providing an average of 272 gigalitres to the environment out of the average 494 gigalitres available.

Engineers Australia, which represents 27,000 engineers, said that the release of such large quantities for environmental purposes had a serious impact on the ACT's water resources and called for additional storage facilities to address the issue. "The current need for water restrictions arises from the fact that since January 2000, flows in the Cotter and Queanbeyan Rivers have been very much less than average, with the result that storage in the reservoirs has been substantially depleted," the report said.

Since 2000, the ACT has faced the threat of water restrictions more often than any other Australian town or city, the report said. "We are concerned regarding the impact these releases have had on the supply of water to residents of the ACT and region which has resulted in the need over a period of two years to restrict water supply to households," it said. The group recommended to a meeting of the Environmental Engineering Society that additional water storage facilities be built as a matter of urgency.

Source

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Many people would like to be kind to others so Leftists exploit that with their nonsense about equality. Most people want a clean, green environment so Greenies exploit that by inventing all sorts of far-fetched threats to the environment. But for both, the real motive is to promote themselves as wiser and better than everyone else, truth regardless.

Global warming has taken the place of Communism as an absurdity that "liberals" will defend to the death regardless of the evidence showing its folly. Evidence never has mattered to real Leftists

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