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Insurance Industry Seeks 40% Emissions Cut by 2020

Posted on 22 Oct 2009

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ClimateWise, an insurance industry group whose members include Swiss Reinsurance Co., called on developed countries to reduce their carbon emissions by 40 percent in 2020 from 1990 levels to help avert global warming.

“The climate crisis poses a systemic risk to the global economy,” the group said today in Cape Town, where the United Nations Environment Program is hosting a conference on financing programs to protect the environment. We need “an ambitious, robust and equitable global deal that responds credibly to the scale and urgency of the crisis facing humanity today.”

The United Nations aims to reach agreement on a new accord to combat climate change and cut greenhouse-gas emissions in a 10-day Copenhagen summit that begins Dec. 7.

“We want to extend insurance to as broad a part of the population as possible,” Andrew Torrance, chief executive officer of Alliance Insurance Co. and chairman of ClimateWise, said in an interview in Cape Town. “Without adequate action being taken in Copenhagen, property in many more parts of the world could become uninsurable.”

ClimateWise members also include South Africa’s Santam Ltd.

“The industry operates off annual contracts” and can stop insuring unacceptable risk, Torrance said. “Economically the insurance industry can manage the potential risks of climate change down the road. There is no question of the industry being in danger of collapsing as a result of climate change.”

UNEP and Standard Bank Group Ltd., Africa’s largest lender, announced at today’s meeting that they had jointly started a project aimed at developing Africa’s carbon market. The Africa Carbon Development Facility will provide targeted grants, technical assistance and training.

“Despite the explosive growth of the carbon market worldwide, Africa has not yet substantially benefited,” UNEP energy economist Glenn Hodes said in a statement. “Its share of the UN-regulated carbon credit market has held steady at around 3 percent. Even without any additional stimulus, the 112 projects currently in process would create 85 million carbon credits worth over $1.2 billion by 2012.”