Climate Change, Energy, and Insurance

Climate Change and the Cost of Carbon

Senator Hickenlooper brings up the issue of climate change and the widely debated costs per carbon.
He expresses concern about the accuracy of cost assessments related to climate change.
He references his master's degree in earth environmental science earned in 1979, during the time when it was referred to as the greenhouse effect. Observations he made during his geology years from the 1980s onward are becoming increasingly validated.
He mentions the predicted instances of extreme weather and droughts, particularly in the Western and Southwestern United States.
He emphasizes the necessity of assessing these issues when determining the value of carbon.

Insurance availability:
- In California and Florida, residents are encountering difficulties in securing home insurance.
- Florida experienced a 90% surge in home insurance expenses in 2023 alone.
- Miami witnessed a 322% increase in 2024, while Tampa saw a 213% rise.
- California: only 31% of residents have insurance.
Causes for Insurance Issues:
- Extreme weather events like heavy rainfall.
- Wildfires.

The senator raises the question of balancing the advantages of renewable energy with addressing climate change as extreme weather events continue to grow.

The world has been progressing in decarbonizing energy production for approximately 200 years, transitioning from wood to coal, oil, and natural gas.
Nuclear energy is predicted to become the primary energy source in the future.
Currently, natural gas leads; however, there's a gradual shift towards lower carbon intensity.
The aim is to ultimately establish a carbon-neutral energy system, which is expected to take generations to accomplish.

Global Expenditure: Between 3 and 10 trillion has been invested in wind, solar, and battery technologies.
Impact: Last year, these sources accounted for over 3\% of global primary energy.
Outcome: Significant investments have led to reduced prices per unit of electricity from these sources. However, increased penetration of these sources has resulted in higher electricity prices.

Texas has 80% more wind and solar energy than any other state.
Texas has among the very lowest cost of electricity to a home.
- Texas's affordable electricity is in spite of, not because of, wind and solar.
- Florida relies on natural gas without large scale wind and solar.
- Texas outperforms New York and New England in electricity costs.

Insurance market issues stem from the way these markets are regulated and from restrictions on competition.
Insured losses from extreme weather damage have shown a downward trend over multiple decades.
- There has been a decline of over 20% in the last 30 years.
Deaths from extreme weather have decreased by over 98%.
Droughts are decreasing in the US and globally.

The presenter offers to discuss the Colorado River drought, which has 10,000 years of data, with the senator.