Climate Change: How Will Insurers Be Affected?

Originally published in The Insurance Law Quarterly Review: Winter 2005

The Third Assessment Report of the UN Intergovernmental Panel on Climate Change (2001) confirms the broad scientific consensus that climate change is already occurring and will continue. The balance of evidence suggests that the cause is the increasing concentration of greenhouse gas in the atmosphere resulting from the burning of fossil fuels.

Some governments have already begun to respond. Parties to the Kyoto Protocol are now bound to reduce their combined emissions of greenhouse gases by at least five per cent from 1990 levels. In the EU, a carbon dioxide emissions trading scheme (the "EU ETS") was set up this year as part of an effort to curb emissions from certain industrial sectors. Other governments, including the US, have been much slower to act, or even accept the link between greenhouse gas emission and climate change.