Greatest financial responsibility lies with countries most responsible for the increase in greenhouse gas emissions
In a relatively short time, the focus on climate change has shifted from debate over the reality of global warming to a general consensus that it not only exists, but needs to be urgently addressed, says Willis.
Recent U.S. federal court rulings on global warming have strengthened the growing demand from scientists and business leaders for action from the federal government. Further, the latest UN report on climate change emphasizes that global warming is "unequivocal”, that humans are the main cause, and concludes that the greatest financial responsibility lies with the U.S. and other countries which are most responsible for the increase in greenhouse gas emissions, according to Willis.
Release of the UN report coincided with the latest crucial round of climate change talks at the UN Climate Change Conference in Bali earlier this month. The Bali talks will shape global climate policy for the foreseeable future. Inevitably therefore, they will heavily influence the long-term investment decisions made by both the public and private sectors. The meeting concluded with an agreement between nearly 190 countries to take "active" measures against global warming, said a spokesperson.
The spokesperson added: " Willis is actively involved in monitoring various aspects of climate change, including developments in science, regulation, liability trends, business risk and insurance product development. Willis’ North American environmental practice looks at this global topic from an insurance perspective in the new issue of their newsletter, Environmental Risk. In an article entitled “Feeling the Heat: How Greenhouse Gas Emissions Standards and Trading Systems are Creating Risks and Opportunities Around the Globe,” author David Orleans looks at litigation trends and the evolving response of the insurance industry to the emerging risk exposures and new marketplace demands. He also provides helpful advice to clients and risk managers on what steps they should be taking to prepare themselves for these new risks."
Some of the issues addressed in the latest newsletter include:regulatory activity by the EU and US to help control emissions levels; the possibility of D&O claims or litigation for failure to disclose greenhouse gas emissions and potential future climate change related impacts on company financial performance; critical insurance program considerations for risk managers when considering new risk exposures presented by climate change.
Commenting on the issue, Michael Balmer, environmental practice leader at Willis said: "It is challenging to keep up with the speed of change in relation to Climate Change developments and the associated new risk exposures and opportunities. Willis is helping clients to prepare for the challenges presented by a carbon constrained future and we are actively engaged in the development of market solutions for some of these new risks.”