An Insurance Executive Explains Why We Need a Carbon Tax

THIS IS A RED LETTER DAY!!!! WHEN AN INSURANCE COMPANY EXECUTIVE Advocates for a Carbon Tax!!! I never thought I'd live to see the day, frankly. But I'm glad that astute business people realize that there is profit to be made by establishing a carbon tax. In fact, if one insurance company introduces a carbon tax into the formula/algorithm used to generate its actuarial tables, then there will be

As more and more natural disasters happen, insurance can only go so far before it becomes unaffordable as implied in the article. While a carbon tax seems like a great idea to put us on the right path towards addressing and taking action on climate change, the likelihood that it will actually get passed is presumably very small. Yes, a carbon tax would force businesses and consumers to find environment-friendly alternatives, but I found that over half of the House of Representatives (mostly Republicans) agreed that a carbon tax would be “detrimental to the United States economy” in a resolution http://clerk.house.gov/evs/2016/roll295.xml mentioned in an article on the Guardian, “Republican Lawmaker Pitches Carbon Tax in Defiance of Party Stance.” (https://www.theguardian.com/environment/2018/jul/23/republican-carlos-cu.... President Trump has also made his stance on global warming clear numerous times, and has even opted against policies that are in favor of taking action on climate change. In my opinion, it’s really up to us as citizens who believe in global warming and climate change to take our own actions at this point. Whether it be walking instead of driving, buying eco-friendly products, or recycling, every little bit truly does count. If more people begin to reduce their carbon footprints, others will catch on.

There is a technology that would help a lot to reduce the effects of Climate Change. It is advanced nuclear reactors like GE-Hitachi's PRISM reactor that can consume and destroy nuclear wastes stored at today's nuclear power plants and convert it to emissions-free electricity. PRISM reactors can also replace the boilers at coal-fired power plants and utilize all the rest of the remaining infrastructure to produce and distribute emissions-free electricity. Google PRISM and check it out. It, together with wind, solar and electric vehicles could do a lot to slow, and perhaps even halt climate change.

We need a carbon tax to encourage developments that will minimize global warming. The money raised should be returned to taxpayers in the form of a cash 'dividend'. This will provide the most benefit to those with the least income. As the 'Economist' reported last month, a recent study showed that taxing a tonne of carbon at $49 could give most low-income taxpayers an average net gain of $788. A tax policy that helps helps to save the planet and does not favor the rich should be attractive to most voters.

If you live in WA State, your vote in Nov. for I-1631 is a vote for the sort of carbon tax (or fee) he's recommending.

Why revenue neutral? Proceeds from a carbon tax could be used to smooth the transition to non-carbon producing energies. For example, what if parking lots in sunny climes were to put solar cells on the roofs of their shade structures? The energy produced could power the businesses or apartments associated with the parking lot. Using money from a carbon tax could facilitate efforts like that. After all, the faster the country curbs its greenhouse gas emissions, the faster the carbon tax burden goes down.

Emissions are already on the way down. I don’t see a reason that we cannot start a voluntary system similar to Energy Star that would provide incentives to develop and utilize low or zero emissions technologies. Taxes would just be a shell game with the richest having the ability to easily avoid the tax. The middle and lower classes will have less ability to make the purchases and upgrades needed to avoid the increased taxation. Offsetting with credits would just encourage people to continue doing what they are doing.

Higher Insurance cost is just one of the hidden costs of using fossil fuels. A carbon tax is a simple way to make users of fossil fuels pay for the damage they are creating. Polluters should never be given a free ride.

Broad Scientific Consensus since 1980: Climate change is a serious problem with wide-reaching long term consequences that must be addressed swiftly to avert escalating global crises and lots of unnecessary human suffering. Most Conservatives: Whatever. It’s not a thing in my suburb right now. Insurance executive in 2018: You guys, the actuaries say climate change is going to be really expensive and problematic for us! Conservatives: Oh my god, quick- let’s do something! Our precious money!!!

Apparently, this op-ed tells us is that what we really need is for the archetype of what used to be called a republican, aka a property insurance executive, to run against as many trumpicans in red congressional districts and red states as soon as possible. They would offer a rational/sane alternative to the current crop of cowardly cretinous ideologues in such districts who can't be bothered with such little details as survival of a life sustaining ecosystem.

For the same reasons we need or could use a so called "carbon or carboniferous fuel tax", we need , and we are familiar with(we have not ever used or tried to use a carbon tax), nuclear power. In fact, unlike the Soviets who practically built their reactors with matchheads and dynamite, we now can desoign and construct second and third generation nucleasr power plantss that are so safe the changes they will ever leak or cause anyone harm, is orders of magniture less than our current-or "first generation" nuclear plants which are far far safer than oil, gas or coal, all of which explode, cause diseases and are polluting both our oceans and air and making our planet into a little "venus", where nothing lives because of runaway carboniferous greenhouse effect. Hopefully, only we humans will die in the coming disasters, but, if we start building lots of nuclear power plants, now, we actually might save a modicum of civilization for deserving young people. I doubt it as humans and corporations are notoriously stupid and recalcitrant when it comes to self preservation. Look at the SST the Europeans insited on building-though it was overf proiced and wasteful-and American Motors, not to mention all the billions of dollars we invested in VHS players, record players and tape recorders. Along with the various cars no longer made by GM and other companies, we could probably build Trump's wall ten times, or stairs to the moon: another first for the US of A!

Yep. This is spot on. Economists have been saying this now for decades. Nice to see elements of the insurance industry recognizing this. Its is by far the best path forward for dealing with ghg emissions. The sooner we do it the better and as the author notes, there is no need for this to represent a net increase in taxes. It could be offset with a combination of reductions in payroll, income or capital taxes (from left to right). It could even be simply rebated in the form of per-capita payments to every citizen/resident.

There is no evidence the weather is getting stormier. That's not the same as getting warmer. Sea level is rising by about a foot per century. Not insignificant, but not enough to make a big difference. Most calculations indicate that the cost of reducing carbon emissions is much greater than any benefit. See the results of the Copenhagen Consensus. The chief reason for the increased damage resulting from natural disasters is increased building in hazardous areas: hurricane coasts, fire-prone hillsides.

Instead of a carbon tax, why not just take some real steps towards drastically reducing the amount of carbon(CO2, Methane, etc) that we pump into the atmosphere. A tax on carbon is only a way to spread the blame and the liability. It will not solve the problem. Taxes can only be collected by stable, organized governments that have the support of their people. Stable governments are going to be among the casualties of global warming.

Many of these commenters should check out the CitizensClimateLobby.org and Climate Leadership Council (clcouncil.org/) websites. Details differ, but both propose a revenue–neutral carbon fee–&–dividend: • A steadily rising carbon fee paid at wellhead, mine, port of entry. • All proceeds paid monthly to households on a per capita basis. It would not hurt the poor & middle class as the Treasure Dept. estimates that lowest 70% of households would receive more in dividends than they pay in increased prices. • Border adjustments: exporters receive a refund on fees paid & imports from countries w/o similar fees would pay a tax. This would eliminate incentive to export jobs & pollution; other countries would be incentivized to implement carbon prices. • Removal of subsidies on fossil fuels & renewable energy • Repeal of energy standards (e.g., CAFE standards, CPP, etc.) Money saved on subsidies & regulations ($billions/yr) could be redirected to retraining displaced workers, encouraging businesses in depressed areas, renewable energy research, developing mass transit …

As it is with all consumption taxes, carbon taxes are going to hit poor or low income people more than rich or ultra rich ones. The government will get more taxes from the poor to give tax relief for the rich.

I find it disconcerting to read the objections and comments which are focusing on the insurance industry or equity issues on a carbon tax. Disconcerting because " Rome is Burning " and we need to take action and then economics and people will and can adjust. The importance of this article is the measurement and calculation of risk in economic terms from actuarial experts adds evidence of the socio-economical consequences of climate change.

Somehow, this reminded me of a warning in an old Peter, Paul, and Mary song: Well, Well, Well "God send a fire, not a flood next time." In California we know it is not "either, or", it is "both, and". Wildfires are strongly linked to heat, vegetation, and dryness. Climate change makes it far hotter--and both dryer (many years, and months) and wetter. Wetter makes the fuel grow faster. Dryer and hotter weather makes the increase fuel burn hotter and longer. Sea level rise and increased intensity of both hurricanes and winter storms will also increase loss of property. The effects of the CO2 already in the air and oceans will cause vast losses. Insuring this with premiums alone will put the cost of those premiums out of reach for many. Nobody can afford to rebuild their house every 20 years or so. Yes a carbon tax would help, but it will take a much more activist approach from our government as well. Insurance, like medical care will increasingly be subsidized by the government as the costs become unaffordable. A carbon tax is a clever regulation, allowing innovation within it. It will not save the insurance industry. We are about 40 years too late for a carbon tax alone to stop major disruption and loss of territory from climate change. A carbon tax solution is like a set of golf clubs with only a putter. Essential but inadequate for a winning game.

This was the right idea 25 years ago and it remains the best plan today. A broad carbon tax will effect more positive change than thousands of highly specific regulations - and closer to the scale of the problem. It is not a silver bullet, but anyone who argues that it is an a priori impossibility should be viewed with skepticism. If we are unwilling to contemplate the decisions that will work - we will only be left with the long debates and the status quo. That's the approach the energy sector has taken to this debate for decades and we should no longer indulge in it.

Sorry, but every discussion on climate change includes the "real, tangible consequences" of inaction. You may not want to point fingers, but get some courage and take a stand. The politicization of this is all coming from one direction and that is the Republican party. For everyone else this is science. If you're serious about tackling climate change, then vote Republicans out of office in November. A carbon tax is not happening any other way.

We need insurance and their actuarial tables to guide us. We need a carbon tax with three parts: 1) A fixed inflation adjusted refundable tax rebate to every person that offsets the national median amount of personal carbon costs. 2) An annually adjusted carbon tax rate based upon the Federal and State costs to respond to Natural disasters (Hurricane, Flood, Fire and Earthquake}. This would be a 3 year moving average tax rate to smooth year to year rate fluctuations. 3) Impose a boarder carbon tax on all imports (remove on all exports) so all imports pay the same carbon tax as thought the product was U.S. made. Therefore, no reason for companies to off-shore, they can't avoid the carbon tax. Climate costs will keep going up so we need related new revenue and to encourage more attention to preventing carbon buildup. Need to educate the President and GOP that climate catastrophes are costing U.S. more and more money.

Insurance is a racket. It takes advantage of the fact that people do not have good intuitions about risk and several cognitive biases (positive in that we hope that disasters won't happen, and negative in that scare stories lead us to overcompensate). These biases are a natural part of being human, but there shouldn't be an industry built on exploiting them. The industry is sitting there with the numbers, but the individual cannot know them and therefore cannot make a rational decision on whether the cost of insurance is reasonable or not. My proposal: just like supermarkets are required to standardize cost-per-pound of food on store signs so consumers can compare, insurance companies should be required to post cost-per-$-of-risk. Until we fix this, relying on insurance to mitigate climate change is an invitation for insurance companies to rip people off. Henry Lieberman Research Scientist MIT Computer Science and Artificial Intelligence Lab

Anyone who believes insurance companies will reduce rates if a carbon tax is implemented is a fool. There’s nothing predictable about five years moving averages and left to their own devices the actuaries will always choose the most extreme average to base their rates on.

You could just advocate voting every Republican out of office because that is a necessary step one. Then you can follow up with step two. But without step one step two has the proverbial snowballs chance.

We definitely need financial incentives to reduce fossil fuels use. Substantial taxes on fossil fuels are imperative now and have been for decades. But can they be "revenue neutral"? Now that Republicans have cut income taxes on the rich and corporations, where will the money come from to deal with the current destructive consequences of climate change, the need for a better prepared FEMA? Let's get taxes on the rich and corporations raised to where they ought to be. Then we can talk about whether a carbon tax can be "revenue neutral."

"... but without the unintended consequences that regulations inevitably bring..." What unintended consequences? Does that mean that a carbon tax doesn't have unintended consequences? Does that mean that any unintended consequences of regulation might be less desirable than a habitable planet? I would have thought someone in the insurance industry would be more thoughtful about describing the nature of unintended consequences.

Nice, but meaningless sentiments. Reducing atmospheric CO2 is a global concern. The USA is the only major country to have reduced CO2 emissions over the past few decades. Unless China and India quickly have similar reductions nothing that is done here will make any difference. Self-flagellation may feel good, but it never makes others change their behavior.

The carbon tax should be equal to the increased cost of insuring property and crops from weather events due to global warming and should be rebated as a tax credit shared equally among all individual tax payers. Such a plan would raise energy prices, encouraging efficiency while protecting the purchasing power of workers and the health of our ecosystem.

Oh good -- another tax on the poor. Oh revenue neutral -- so another boon for certain privately held companies as they exchange their tax liabilities or credits or whatever one wants to call them. To avoid risks of exposure how about no more construction with what a quarter mile, a half mile of the coast line... and if it gets hit -- bye bye birdie. Maybe an asphalt tax would be a better idea. Houston flooded because too much is paved-- that problem has been long understood... but ultimately we need a people tax..... Overpopulation is a real problem and possibly when persons have made one copy of themselves, additional copies should be taxed?? (instead of untaxed as they are now?) Interesting notion.

The insurance industry could make a huge contribution to climate change awareness and mitigation quite easily. How? By canceling Mar-a-Largo’s hurricane insurance. That action would have a much larger impact on policy than a piddly little carbon tax.

I wonder how many of these conservative businessmen who now see financial risk in their own specific industries voted for The climate change denier for president?

But first the insurance industry must lead lobby This government to acknowledge that there is a problem rather than ignoring all evidence and promoting industries that contribute to the proby

Hear, hear. Compared with climate change everything else amounts to re-arranging deck chairs on the Titanic. The sooner that we, with the help and support of enlightened businesses, throw denier Republicans out of office the sooner we can start fixing the problem of carbon pollution.

Sounds great in theory. No chance will a carbon tax be revenue neutral (at least not for long), because once the new tax is on the books, it can be raised, along with income taxes. Also, because a carbon tax will not be terribly progressive in application, advocates for low income people will complain (rightly so) that the new tax is harming the poor unfairly. The front page of this very newspaper, today, has a story about the increasing share of the foreign born population - highest since 1910. The carbon footprint of an American is far higher than the carbon footprint of just about anyplace else in the world. I would suggest that the carbon footprint of an immigrant is far, far higher than the carbon footprint of their country of origin. A carbon tax here also simply moves manufacturing from the US to places where there is no carbon tax. The wealthy will continue to fly in their private jets, have enormous homes - usually more than one, and consume whatever they want. A carbon tax will not reduce the carbon footprint of the people with the biggest footprints. This proposal is simply an assault on the consumption patterns of middle class Americans, and a tax increase on them, which will end up doing nothing to solve the alleged problem. No one could, or should support it. Of course, very wealthy people like Mr. Rust and private-jet-environmentalists will support it, because it will not affect their lifestyle one bit.

Listen to insurers who base their rates on long term trends.Eventually insurance will become prohibitively expensive.After hurricane Marilyn hit the American Virgin Islands in 1995 and caused massive damage no insurance company would insure property there.Those of us with property realized we had to rebuild wisely and save the money each year in lieu of insurance and designate the money to rebuild after the next storm which would eventually come.The storms did come last year 22 years later- two category 5-Irma and Maria.

I wouldn't commit to revenue neutral carbon tax. Provide extra money for R&D, infrastructure improvement limited to removing greenhouse gases (federal building upgrades) and protected spaces with natural carbon sequestration, trees. Even spending money to encourage other countries to protect rain forrests.

Scientists tasked by oil companies in the 1970's knew and wrote about the predictable and probable effects of spewing carbon dioxide into the atmosphere. The actuarial chart referenced in the article simply shows that the scientists -- hired by the oil companies -- knew exactly what they were talking about. We need more science informing our public policy and less politics. Congress is the vehicle and that vehicle needs an overhaul. Publicly financed campaigns are a great place to start and would likely do the trick.

Environment Canada report states that in order for Canada and other industrial economies to reach their Paris accord climate goal, a carbon tax of $300 a ton ($3 a gallon of gas) will need to be levied but some American states and provinces in Canada (like BC) were levying $10 a ton which is not even the scratching the surface of the problem. Carbon tax is a feel good measure that will NOT tackle the problem of natural climate change somewhat aggravated by increasing population demanding increasing energy use for farming (cattle farming is among the biggest contributor to climate change but nobody wants to give their steak dinner but all liberals want "flyover" people to give up their SUV's and pickup trucks). There are some technological solutions such as carbon capture being honed as we speak and, hopefully, will ease out concerns. Insurance companies are loath to make payments against claims and any excuse they can think of for shifting the blame for losses on consumers will be invented and passed on as 'science'. Climate change has been happening long before humans and other species evolved and to think that we are more powerful than nature is to be foolish, if not hubristic.

A carbon tax is a good first step, but don't kid yourself that it will help much. Just look at the price of gasoline in Europe and realize that even taxes of that magnitude do not result in reductions in fuel use large enough to avoid the worst impacts of climate change. Here's my alternative, totally-market-driven proposal. I call it "clean up your own mess, or pay someone to do so". The gist of it is that we use tax revenues from a carbon tax to extract and sequester carbon from the atmosphere. The cost of doing that, per ton of C02, then sets the tax rate. We start this process now, and keep it going until such time as our net carbon emissions fall to zero. So, you want to burn a lot of fossil fuel? Great, no problem. Just a) realize that creates a mess for us all, and b) pay somebody to clean up your mess. Pay someone to extract the C02 out of the atmosphere that you put there by burning fossil fuels. So, on a three year cycle, the Federal government would solicit bids for industrial-scale methods for permanent carbon sequestration. Some function of the low bids then sets the price of carbon emissions for the next three years (e.g., $150 per ton). Fossil fuels get taxed at that amount, and, most importantly, we use that money to remove C02 from the air. This way, we turn the markets toward the task of removing C02 as cheaply as possible. And we establish a path to zero net emissions. While preserving individual freedom to pollute. Just pay for it.