Hurricane Harvey Starkly Exposes the Financial Burden of Climate Change on Economy, Environment and Human Health

September 1, 2017 /3BL Media/ - Hurricane Harvey, potentially the costliest disaster in U.S. history, “starkly exposes the colossal financial burden of climate change and its impacts on the economy, the environment and human health,” Ceres said in a statement today.

Cynthia McHale, the director of insurance at Ceres, added:

The staggering suffering and economic losses brought by Hurricane Harvey are further evidence that the climate is changing. Climate scientists have long predicted that a warming atmosphere will bring more frequent and extreme rainfall events. Harvey also shines a stark spotlight on the insurance industry—and its regulators—which for the most part have severely neglected to address the destructive impacts and escalating costs of climate change.

While estimates about the ultimate costs of Hurricane Harvey are still preliminary, property damages will be in the many tens, if not hundreds, of billions, and most of these losses are not insured. Additionally, due to the complex network of refineries, oil and gas storage tanks and other fossil fuel energy infrastructure, the extensive flooding has caused significant environmental and public health threats in the city of Houston and surrounding areas, as well as disruptions to energy supplies.

As Harvey’s expansive and costly climate change-fueled impacts continue to unfold, we know that insurers may not pick up much of the tab for rebuilding Texas. At the same time, through their underwriting of coal, oil and gas companies and as major institutional investors with vast holdings in the sector, insurers have extensive financial ties to the fossil fuel industry that contributes the lion’s share of carbon emissions that are driving climate change. A 2016 Ceres report found that the 40 largest property casualty and life insurance companies held nearly $500 billion in coal, oil and gas, and electric and gas utility investments.

As the strongest hurricane to hit Texas in 50 years, and the wettest single storm in the history of the continental U.S., Harvey’s unprecedented impacts demonstrate the urgent need for effective federal, state and local leadership, as well as action from the insurance sector to increase our resiliency to current and future climate change-driven extreme weather events.

Only a few leading insurers, including Allianz, Blue Cross Blue Shield Massachusetts, The Hartford, and Munich Re have declared that they will continue climate action to meet the goals of the Paris Agreement. Insurance companies by-and-large have failed to communicate the threat or respond adequately to the mounting risks of unabated climate change.    

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Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy. For more information, visit www.ceres.org and follow @CeresNews.