Recently Florida’s U.S. Sen. Bill Nelson co-sponsored legislation with Louisiana Sen. Mary Landrieu that could lead to a national insurance-catastrophe fund. Let’s take a closer look at the root of this crisis and what to do.
Insurance companies cannot afford to fall behind the costs of more frequent and powerful natural disasters. They are not waiting to abandon coverage or raise rates.
This vast industry is not sitting on its hands while business models based on the best available science show trouble ahead.
In fact, global warming is the root of the insurance crisis in Florida.
You can agree or disagree with this inconvenient truth, but you can’t avoid the question: What to do?
So far the response is business as usual: Solve the coastal insurance crisis by spreading the costs to taxpayers across the nation. This is wrong, and it is wrong for a further reason.
At the same time Congress is debating a federal solution to rescue the insurance industry from the costs of natural disasters, Florida is pressing the federal government to suspend or rewrite rules and regulations in order to foster development in flood-prone areas.
The federal Environmental Protection Agency just published a new rule — now in comment period — allowing for water transfers between jurisdictions without the need for federal water-quality permit review.
Narrowly speaking, the rule would change the focal point of responsibility for regulating pollution.
Broadly speaking, it is part and parcel of the effort to facilitate growth by private developers in flood-prone areas of Florida.
There is nothing new in this: Where business wants the marketplace to go is always called “free.” But with $2 trillion of Florida’s real-estate values set like a bowling pin in hurricane alley, the imperative to change is a fact as hard as geography.
State legislatures, Congress and executive branches of government still do not see things this way.
There is at least one powerful constituency that does: the U.S. venture-capital industry.
Recently, leaders of the industry, representing billions of dollars of asset creation, coalesced by a group called Environmental Entrepreneurs, wrote to Congress: “Without a signal to reduce global warming pollution, American businesses continue to make long-term capital investments that commit us to ever increasing greenhouse gas emissions while discouraging the development and deployment of competitive new technologies.”
The point is shaded, for most people. Businesses make long-term investments based on depreciation schedules that extend decades into the future.
Tomorrow’s answers to global warming are investments that business makes today. And that’s the problem, the venture capitalists point out: Government policies are not steering business toward investment and profits nearly fast enough. Leave aside the matter of the insurance crisis: Foreign competitors are surging ahead in production of renewable energy, photovoltaics, auto technologies and efficient building, and leaving the U.S. in the dust.
What the venture capitalists are too diplomatic to say is this: Our politics are too shackled to the eternal present of election cycles, of political fund-raisers where wealthy campaign contributors nod over Caesar salad, main course, dessert and more of the same.
What should be done is this: There should be no legislation offering industries shelter from the risks of global warming without companion measures to provide clear and unequivocal incentives for industries to march away rapidly from the practices and profits that caused global warming in the first place.
No one likes a forced march — it is considered un-American — but federal and state policies steer consumers and taxpayers in directions as efficiently as cattle in a chute.
If you think I am blind, ask yourself the question next time you are stuck in traffic.
In the end, not even traffic can keep us from being washed away by the sands of time. But in 2005, the U.S. Army Corps of Engineers pumped $156 million of sand onto Florida beaches to replace what was washed away by rising sea levels and more intense storms, 20 percent more than the accumulated spending of the seven previous years combined.
In nearly the same period, the federal EPA spent less than $300,000 to map how sea-level rise will affect coastal communities in Florida.
About priorities on climate change, all you need to know is in the comparison of those two numbers.
It is up to voters, and to the business communities especially, to demand that the candidates to be next governor of Florida and president all address the stinging reality of climate change.
Better a forced march in legislation now than surrendering our threatened coasts or investing trillions of dollars to hold back an indifferent, rising sea.