COP-21 Dispatch: How Reinsurers Use Putative Threat of Global Warming To Game the System

Editor’s Note: My CEI colleagues Chris Horner and Myron Ebell are at the 21^st Conference of the Parties to the United Nations Framework Convention on Climate Change in Paris. It is a testament to their effectiveness that they were, on their first day, targeted by a coordinated campaign to silence their participation in the proceedings (see photo to the right). Of course, the campaign failed. Find Chris Horner’s first dispatch here; below I’ve posted his second.

Monday was an eventful day in Paris, site of the ongoing talks to secure a replacement treaty for the Kyoto Protocol that would regulate energy use among richer countries and thereby script a massive, self-renewing wealth transfer.

The first half of my day was occupied by the Heartland Institute, CFACT, and the Competitive Enterprise Institute “Day of Examining the Data” event.  There, one of the less bizarre questioners made an inquiry that distilled to: How can you disagree with the reinsurance industry’s insistence that catastrophic man-made global warming is evidenced by increasingly costly weather events?

You may have noticed that these claims rarely come with the caveats that a more populous world with more dwellings and other property to insure— i.e., if you build more (taxpayer-subsidized) beach houses—you should expect more houses on the beach to be destroyed during storms (See links below for such cautions).

Patrick Moore, a founder of Greenpeace who has since turned against institutional environmentalism on account of its misplaced priorities, responded from the audience that the purpose of the insurance industry’s argument is to obtain approvals for the industry’s rate increases. That is, the insurance industry alarmist position is self-serving.

There is a lot to what Mr. Moore says, should a journalist actually be inclined to look.  Indeed, the insurance industry’s rent-seeking cloaked as alarmism has been well-known in relevant circles since the onset of the global warming industry, of which the reinsurance industry was a charter member.

Consider the following excerpt from an internal, corporate memo I have, from another of the global warming industry’s founding fathers, reflecting then then still-raging internal debate about whether to jump to the front of this parade. After expounding on the weakness of the severe weather rhetoric (which has only been further exposed by observation over time, including particularly the claim, unsupportable on scrutiny, of increased losses from storm damage), one executive notes to another:

Global warming has turned into a giant rent seeking game, and the insurance industry is desperate to become more profitable in the face of higher claims and profitability problems.  The global warming scare is a great device for them to “talk up” rates—and get governments to raise rates where regulated because “its not our fault” and “its just going to get worse.” So what’s new in the business world?