‘Big news’ for climate as global insurance giant shifts away from fossil fuels

Otogidemon, CC BY-SA 3.0, via Wikimedia Commons
30 St Mary Axe. Also known as the Swiss Re building, or Gherkin. Source: Otogidemon, CC BY-SA 3.0, via Wikimedia Commons.

The new policy by Swiss Re “is not perfect yet,” said one campaigner, but the world’s second-largest reinsurer “is headed in the right direction.”

By Kenny Stancil, Creative Commons (CC BY-NC-ND 3.0).

After Swiss Re, the world’s second-largest reinsurer, announced Thursday that it is moving to end coverage for most new oil and gas projects, climate justice campaigners who have long pushed for the insurance industry to shift away from fossil fuels offered cautious praise.

“Swiss Re is one of the world’s ultimate risk managers and the policy which it published today sends a strong message to fossil fuel companies, investors, and governments: oil and gas operations need to be phased out in accordance with climate science or they may become uninsurable by the end of the decade,” Peter Bosshard, global coordinator of Insure Our Future, said in a statement.

According to Reuters:

In its annual sustainability report on Thursday, Swiss Re said it would no longer insure projects that get the go-ahead from their parent company from 2022, unless the company has an independently verified, science-based plan to reach net-zero emissions.

By 2025, Swiss Re said it wanted half of its overall oil and gas premiums to come from companies aligned with such a net-zero by 2050 plan, and by 2030 all its clients in the sector should have done so.

Also, from 2022, the company said it will no longer insure companies or projects with more than 10% of their production in the Arctic, apart from Norwegian producers.

On the issue of treaty reinsurance, whereby it insures bundles of risk in a job lot, Swiss Re said it expected to finalize a policy for the oil and gas sector in 2023.

“By taking steps to stop insuring new oil and gas projects and companies that won’t aim at aligning their activities with climate science by 2030, Swiss Re is headed in the right direction,” said Reclaim Finance director Lucie Pinson.

“The policy is not perfect yet,” she added, “and we encourage its peers to build on it to fully align with a realistic 1.5°C scenario.”

The International Energy Agency (IEA) said last May that there is “no need for investment in new fossil fuel supply” if the world is to achieve a net-zero energy system by 2050 en route to meeting the Paris agreement’s more ambitious global warming target.

Swiss Re, said Pinson, should respond to the IEA’s landmark report by “drawing a red line against fossil fuel expansion and excluding both projects and companies that cross that line well before 2025.”

Sharing a detailed Twitter thread by Bosshard, Oil Change International celebrated Swiss Re’s move. Becoming the first major oil and gas insurer to deny coverage for most new fossil fuel projects is “big news,” said the group.

Arguing that “ending support for oil and gas projects is gaining real momentum,” 350.org also praised Insure Our Future and encouraged its campaigners to “keep up the good work.”

According to Bosshard, Swiss Re’s phase-out commitment represents “a first for the insurance industry” because it “not only applies to the up and midstream sectors, but also to downstream companies (oil refineries, gas utilities, petrochemical plants etc.) without credible net-zero plans.”

However, he continued, “the new policy includes some important gaps and contingencies.”

“It will not cover new production projects which oil companies move forward as part of their ongoing operations,” said Bosshard. “It also exempts Norway from its definition of Arctic oil. The IEA doesn’t make any such exemptions.”

“Most importantly, the policy hinges on the development of a credible oil and gas framework by the Science Based Targets initiative [SBTi], by which oil companies’ net-zero plans will be measured,” he added. “It’s crucial that the SBTi framework reflect the findings” of the IEA and the United Nations.

Swiss Re’s new policy follows similar policies adopted last week by Hannover Re and Mapfre, said Bosshard, who pointed out that “these three companies cover 21% of the global reinsurance market.”

“Now, the Insure Our Future campaign calls on Munich Re, Lloyd’s, and SCOR, which together account for 26% of the global reinsurance market, to make commitments which build on Swiss Re’s approach by the time of their annual general meetings,” said Bosshard.

“We’ll be watching,” he added.

Humanity subsidizing ‘our own extinction,’ warns study

Extinction Rebellion blockade of the Oberbaumbrücke. Credit: Leonhard Lenz, CC0, via Wikimedia Commons
Extinction Rebellion blockade of the Oberbaumbrücke. Credit: Leonhard Lenz, CC0, via Wikimedia Commons

World governments are spending $1.8 trillion annually to support fossil fuel emissions, deforestation, water pollution, and other harms to biodiversity and the planet.

By Julia Conley, Common Dreams (CC BY-NC-ND 3.0)

Releasing a new study showing that world governments spend at least $1.8 trillion annually to subsidize activities which worsen the climate crisis, global subsidies experts on Thursday said leaders must eliminate or redirect the financial supports as part of an ambitious Global Biodiversity Framework at an upcoming summit in China.

“Reforming the $1.8 trillion a year of subsidies that are harming the environment could make an important contribution towards unlocking the over $700 billion a year needed to reverse nature loss by 2030.

The B Team and Business for Nature, two organizations that push businesses around the globe to adopt sustainable practices, supported the study, titled Financing Our Survival: Building a Nature-Positive Economy Through Subsidy Reform.

According to the authors—Doug Koplow of subsidy research firm Earth Track and Ronald Steenblik of the International Institute for Sustainable Development—a lack of transparency regarding the use of subsidies means that the amount of government money being spent on the destruction of nature could be much higher than the research shows.

Photo by Evan Nitschke from Pexels
Photo by Evan Nitschke from Pexels

“Nature is declining at an alarming rate, and we have never lived on a planet with so little biodiversity,” said Christiana Figueres, former executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC) and a member of The B Team. “At least $1.8 trillion is funding the destruction of nature and changing our climate, while creating huge risks for the very businesses who are receiving the subsidies… Harmful subsidies must be redirected towards protecting the climate and nature, rather than financing our own extinction.”

The report identifies at least $640 billion in annual fossil fuel subsidies, $520 billion used by the agricultural sector, $350 billion in water management and wastewater infrastructure, and $155 billion subsidizing logging and unsustainable forest management, all of which account for the majority of annual subsidies.

The equivalent of at least 2% of the global GDP is being spent by governments to finance water pollution and air pollution, soil erosion, deforestation, biodiversity loss, planet-heating fossil fuel emissions, risks to ecosystems in oceans and waterways across the globe, and other harms to nature and humanity, the authors said.

To help finance climate crisis mitigation measures in the Global South—as wealthy nations pledged they would in 2009, promising $100 billion annually—and redirect government funds toward a transition to renewable energy and a reversal of nature loss, hundreds of billions of dollars in subsidies must be eliminated or repurposed, according to the report.

A draft of the Global Biodiversity Framework calls for $500 billion per year in reformed subsidies—a target that “needs to be strengthened” in April at the U.N. Biodiversity Conference (COP 15) in Kunming, China.

“The case is clear: reforming the $1.8 trillion a year of subsidies that are harming the environment could make an important contribution towards unlocking the over $700 billion a year needed to reverse nature loss by 2030 as well as the cost of reaching net zero carbon emissions by 2050,” wrote the authors. “This needs to happen alongside aligning all private financial flows to nature-positive and increasing public and private finance to deliver innovative financial solutions that help protect, restore, and conserve nature.”

“With political determination and radical public-private sector collaboration,” they added, “we can reform these harmful subsidies and create opportunities for an equitable, nature-positive and net-zero economy. To do so, we must bring awareness, transparency, and disclosure on subsidies from both governments and business.”

Ahead of the biodiversity conference in April, said Business for Nature, negotiators must strengthen the Global Biodiversity Framework draft by including a commitment to reform “ALL harmful subsidies, including indirect and direct incentives.”

“Climate action is at a crossroads, in part because of the large scale of public money flowing to harmful industries and practices,” said Mary Robinson, former president of Ireland and member of The B Team. “We need to see thorough subsidy reform from governments and businesses, with social and environmental considerations at the heart, to ensure a just and equitable transition for all.”

Living near fracking sites linked to higher risk of early death: Study

Fracking Site in Warren Center, PA, August 23 2013, Source: Fracking Lawyer, Ostroff Law
Fracking Site in Warren Center, PA, August 23, 2013, Source: Fracking Lawyer, Ostroff Law, (CC BY 3.0 via Wikimedia Commons).

Harvard researchers provide further evidence that, as one environmental advocate has said, “fracking is inherently hazardous to the health and safety of people and communities in proximity to it.”

By Kenny Stancil, Common Dreams (CC BY-NC-ND 3.0).

Elderly individuals who live near or downwind of fracking and other “unconventional” drilling operations are at higher risk of early death compared with seniors who don’t live in close proximity to such sites, according to a new study out Thursday from the Harvard T.H. Chan School of Public Health.

Airborne contaminants from more than 2.5 million oil and gas wells across the U.S., researchers wrote in a paper published in the peer-reviewed journal Nature Energy, are contributing to increased mortality among people 65 and older residing in neighborhoods close to or downwind from what is called unconventional oil and gas development (UOGD)—extraction methods that include directional (non-vertical) drilling and hydraulic fracturing.

“Although UOGD is a major industrial activity in the U.S., very little is known about its public health impacts,” Petros Koutrakis, professor of environmental sciences and one of the paper’s co-authors, said in a statement. “Our study is the first to link mortality to UOGD-related air pollutant exposures.”

Co-author Francesca Dominici, professor of biostatistics, population, and data science, added that “there is an urgent need to understand the causal link between living near or downwind of UOGD and adverse health effects.”

Earlier research, the Harvard Chan School acknowledged in its press release, has “found connections between UOGD activities and increased human exposure to harmful substances in both air and water, as well as connections between UOGD exposure and adverse prenatal, respiratory, cardiovascular, and carcinogenic health outcomes. But little was known about whether exposure to UOGD was associated with mortality risk in the elderly, or about exactly how exposure to UOGD-related activities may be contributing to such risk.”

To find out more, a team of 10 scholars analyzed a cohort of nearly 15.2 million Medicare beneficiaries living in all of the nation’s major UOGD exploration regions from 2001 to 2015. They also examined data collected from more than 2.5 million oil and gas wells.

For each Medicare recipient’s ZIP code and year in the cohort, researchers calculated what pollutant exposures would be if one lived close to UOGD operations, downwind of them, or both, while adjusting for socioeconomic, environmental, and demographic factors.

The closer people lived to fracked gas and other unconventional wells, the greater their risk of premature mortality, researchers found.

According to the Harvard Chan School’s summary of the study:

Those who lived closest to wells had a statistically significant elevated mortality risk (2.5% higher) compared with those who didn’t live close to wells. The study also found that people who lived near UOGD wells as well as downwind of them were at higher risk of premature death than those living upwind, when both groups were compared with people who were unexposed.

“Our findings suggest the importance of considering the potential health dangers of situating UOGD near or upwind of people’s homes,” said Longxiang Li, a postdoctoral fellow in the Department of Environmental Health and lead author of the study.

The new study adds to a growing body of literature linking fossil fuels to negative health outcomes. In a recent report, the World Health Organization warned that burning coal, oil, and gas is “causing millions of premature deaths every year through air pollutants, costing the global economy billions of dollars annually, and fueling the climate crisis.”

Another recent study estimated that eliminating greenhouse gas emissions by 2050 would save 74 million lives this century. Despite mounting evidence of the deadly toll of fossil fuels, President Joe Biden has yet to use his executive authority to cancel nearly two dozen fracked gas export projects that are set to unleash pollution equivalent to roughly 400 new coal-fired power plants.

So-called unconventional drilling practices have grown rapidly over the past decade, becoming the most common form of extraction in the U.S. As of 2015, the Harvard Chan School pointed out, “more than 100,000 UOGD land-based wells were drilled using directional drilling combined with fracking,” and “roughly 17.6 million U.S. residents currently live within one kilometer of at least one active well.”

Fracking threatens every person on the planet, directly or indirectly. It should be banned entirely.

—Wenonah Hauter, executive director of Food & Water Watch
Oil rig, ~12219-12999 Macon Road, Saline Township, Michigan, June 22, 2012. Source: Dwight Burdette, CC BY 3.0, via Wikimedia Commons.
Oil rig, ~12219-12999 Macon Road, Saline Township, Michigan, June 22, 2012. Source: Dwight Burdette, (CC BY 3.0, via Wikimedia Commons).

In contrast to conventional oil and gas drilling, methods such as fracking require “larger volumes of water, proppants (sand or other materials used to keep hydraulic fractures open), and chemicals,” the Harvard Chan School noted.

Last summer, Physicians for Social Responsibility (PSR) uncovered internal records revealing that since 2012, fossil fuel corporations have injected potentially carcinogenic per- and polyfluoroalkyl substances (PFAS), or chemicals that can degrade into PFAS, into the ground while fracking for oil and gas—after former President Barack Obama’s Environmental Protection Agency approved their use despite agency scientists’ concerns about toxicity.

At the time, Wenonah Hauter, executive director of Food & Water Watch, called the PSR report “alarming,” and said it “confirms what hundreds of scientific studies and thousands of pages of data have already shown over the last decade: fracking is inherently hazardous to the health and safety of people and communities in proximity to it.”

“This says nothing of the dreadful impact fossil fuel extraction and burning is having on our runaway climate crisis. Fracking threatens every person on the planet, directly or indirectly,” said Hauter. “It should be banned entirely.”