TNC Testimony on Climate Change's Economic Impacts
Testimony of Dave Jones, Senior Director, Environmental Risk, Before House Committee on Oversight and Reform's Environment Subcommittee
The U.S. House Committee on Oversight and Reform's Environment Subcommittee held a hearing today examining the current and future economic impacts of climate change, specifically on different sectors of the U.S. economy.
Dave Jones, former insurance commissioner for California and now senior director of environmental risk at The Nature Conservancy, testified about the impact of climate change on insurance markets, with a focus on the impact of wildfires in California.
“Climate change is contributing to insurance company losses globally and in the United States,” said Jones. “Insurance companies can respond to these losses in two principal ways: by raising prices and by reducing their exposure to climate change-driven physical risks by excluding or limiting those risks from coverage. In the United States, insurance companies are responding both ways, which has resulted in raising premium prices and excluding or limiting coverage for certain risks when the risk of loss is too high.”
Jones said there were steps insurers could take, including designing plans that take into account the risk reduction benefits of nature in their pricing and underwriting but that communities, governments and homeowners need to take steps such as hazardous fuels reduction to minimize the threat of wildfires.
“While insurance and the insurance sector can play a role in helping to manage these risks, more fundamentally it is the underlying drivers of these risks that need to be addressed,” said Jones. “That means reducing greenhouse gas emissions dramatically, including using natural climate solutions. It also means, in the case of wildfires, using a nature-based approach to manage forests and reduce wildfire risk. Otherwise, we will find ourselves increasingly in an uninsurable world.”
The Nature Conservancy is a global conservation organization dedicated to conserving the lands and waters on which all life depends. Guided by science, we create innovative, on-the-ground solutions to our world's toughest challenges so that nature and people can thrive together. We are tackling climate change, conserving lands, waters and oceans at an unprecedented scale, providing food and water sustainably and helping make cities more sustainable. Working in 79 countries and territories, we use a collaborative approach that engages local communities, governments, the private sector, and other partners. To learn more, visit www.nature.org or follow @nature_press on Twitter.