California DOI Responds to the U.S. Withdrawal from the Paris Climate Agreement
The California Insurance Commissioner has called President Trump’s decision to leave the Paris Agreement “one of the worst abdications of United States leadership” in recorded history. In response, the Commissioner has vowed to uphold California’s commitment to reducing carbon emissions and has requested that insurers divest their thermal coal holdings.
August 9, 2017
In the wake of some of the most extreme weather events to hit the United States in recent years, President Trump lauded his decision to pull out of the Paris Climate Agreement at a rally in Mandan, North Dakota on September 6th, calling the agreement a “job killer.” This announcement flows from President Trump’s decision to officially withdraw from the United Nations’ Paris Climate Agreement in June 2017.
In response, individual states are pledging support for continued climate protections and speaking out against the decision. Governors from Washington, New York, and California formed the United States Climate Alliance, which has pledged to uphold U.S. commitments under the Paris Agreement.
Washington Governor Jay Inslee stated, “New York, California and Washington, representing over one-fifth of U.S. Gross Domestic Product, are committed to achieving the U.S. goal of reducing emissions 26 to 28 percent from 2005 levels and meeting or exceeding the targets of the federal Clean Power Plan.” California Governor Jerry Brown, the de facto head of the Alliance, has confirmed that California remains firmly committed to following the goals set forth in the Paris Agreement.
Bipartisan support for the Alliance is growing as Massachusetts and Vermont, both states with Republican governors, joined the Alliance. Other Republican-led states such as Ohio, New Mexico, Illinois, Maine, Maryland, and Iowa have also pledged their continued support of the Paris Agreement without joining the Alliance. Separately, cities, states, educational institutions, businesses, and investors have vowed to uphold the Paris Agreement’s goals and increase their efforts to cut greenhouse gas emissions through Michael Bloomberg’s coalition, “We Are Still In.” The group has more than 1,000 signatories, including tech and retail giants Amazon, Google, Facebook, Microsoft, Levi Strauss, Nestle, Gap, Target, and IKEA. Insurance industry titans Allianz SE, The Hartford, and Blue Cross Blue Shield of Massachusetts are also part of the coalition.
The California Department of Insurance is following suit and expressing a commitment on behalf of the insurance industry sector to support climate protection measures. In a June press release issued by the Department of Insurance, the California Insurance Commissioner Dave Jones stated:
The United States has contributed more than any other country to the atmospheric carbon dioxide that is scorching the planet. As California has demonstrated time and time again, the United States also has the ability to reduce carbon emissions significantly while continuing economic growth. California will continue to lead on addressing climate change despite the president's decision . . . California will work with other nations, provinces, states, localities, businesses, and investors to meet the Paris Climate Agreement objectives...
Commissioner Jones is the California financial regulator charged with making sure insurance companies doing business in California are making sound investments so they have assets to pay future insurance claims. As such, he is requiring insurers to publically disclose their investments in oil, gas, and coal. Jones said he will expand these efforts by being the first commissioner in America to request that insurers divest from thermal coal because of the immediate financial risk facing investments in the wake of markets, businesses, and governments restricting or reducing its use.
With or without the Paris Agreement, government officials see the insurance industry as playing an important role in climate protection, and (at least in California) insurers will be asked to align their financial interests with the goals of climate protection. Insurance companies are uniquely situated to positively impact climate change as they understand, perhaps better than any other industry, the catastrophic risks and impacts of climate change on our environment, our economies, and our communities.
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