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Daniel B. Botkin

Solving environmental problems by understanding how nature works

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Global Warming and Buying Insurance

April 23, 2007 By Daniel Botkin 4 Comments

Daniel B. Botkin
Copyright © Daniel B. Botkin 2007

As someone who has done research since 1968 on global warming and its possible effects on living things, I am impressed and surprised by the great amount of attention that the media, Congress, international bodies, and people in general are paying to this issue, which seemed to be ignored for so long. 

Over the years, people have often asked me whether global warming is happening or not, and whether the terrible possible effects are definitely going to happen or not.  I reply that this isn't the right question, that we should think about global warming and its possible effects more like the way we think about buying insurance against other natural hazards and catastrophes.

I was on the faculty at the University of California, Santa Barbara for many years, and when I  moved there I became acquainted with earthquakes and wildfires.  I bought  a house there and asked one of my colleagues in the geology department who was an expert on earthquakes and asked if I should buy earthquake insurance.  "I don't have it," he said,  "and here's why.  It's expensive.  The deductible is $10,000.  If an earthquake strikes this part of California and does an average of $10,000 damage per house, this will bankrupt the insurance companies and the Feds will have to come in and bail them out and cover our costs anyway.  And it's very unlikely that that bad an earthquake will happen in my lifetime anyway.  So I don't have it."  He was right — the damage of the next big earthquake did exceed the ability of the insurance companies to pay, and the Feds did have to come in and bail people out.

What he was evaluating was, first, the cost of the premium; second, the likelihood of the event; third, the effects (in dollar terms) of that event; and fourth, whether the insurance would likely pay off anyway.

People did the same kind of analysis for wildfires and came to the opposite conclusion. Everybody had that kind of insurance.  The premium was relatively cheap, wildfires were common and likely in one's lifetime, the deductible was low; and the potential personal costs without insurance were disastrous.

What's the equivalent of buying global-warming insurance?  Actions to lessen the rate of warming or offset potential effects of global warming.  The intriguing thing is that most of the actions we would take to "insure" ourselves would benefit us even setting aside the issue of global warming.  We would plant trees to take up carbon dioxide; and we would burn less coal, which, aside from its greenhouse gas contributions, is highly polluting both to mine and to burn (and especially hazardous for the miners). We would generate electricity from solar and wind energy, abundant in many places that do not have petroleum reserves; this would reduce international strife over access to oil and gas. We would increase plantings even in our cities, making urban life more pleasant.  We would lower our energy costs (when you take into account all the costs of fossil fuel energy including the oil depletion allowance and wars fought over petroleum resources. We would help save endangered and threatened species. Viewed this way, it would make sense to do the equivalent of buying global-warming insurance. 

Forget about empty debates as to whether or not global warming is going to bring catastrophe and whether it is our fault. Take action that is carefully chosen to both combat global warming and benefit living things with or without global warming. And be particularly careful not to act in such panic as to do things that are dangerous and  damaging to life on Earth.  In short, think about it the way my geologist colleague thought about buying earthquake and wildfire insurance in California.

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Filed Under: Climate, Energy & Biodiversity, Global Warming and Life

Comments

  1. Jim Adcock says

    October 17, 2007 at 9:03 am

    So much is written about Global Warming — except what to do about it! The US with 5% of the world population, causes about 20% of the greenhouse gas emissions. Too much coal being burnt? Don’t like nuclear reactors? Try switching your light bulbs to CFLs — and then turn them off when you leave the room. Light benefits no one who cannot see it. Don’t use space heaters or electric baseboard. Is the US too dependent on foreign oil, and is there too much CO2 from gas guzzlers? Buy a Prius, carpool with one other person, and gas consumption is down 75%, and the traffic jambs are fixed. Figure out why your house won’t stay warm (or cool) — and fix it. For example, my 1970s house — in theory — has R13 insulation. Except the attic and crawlspace which I’ve updated to R30. But I can calculate the theoretical R-value of my house using the areas of the walls and floors and my yearly natural gas and electrical bills, and I find a realized R-value of about R5! Why? The house was ill-designed and ill-insulated in the first place! Hard to fix after the fact — but I’m working on it. Stop flying around the world — a trip to Europe is as much CO2 as a year’s driving. Pay your sin-tax — buy carbon offsets to match your footprint. I can’t take my garbage and dump it in my neighbor’s front yard, why should I be allowed to pollute the world with my CO2 emissions, and not pay a price to clean up after my bad behavior?

    Reply
  2. Tim Gillin says

    December 15, 2007 at 11:17 pm

    The insurance analogy for AGW is a good one. It encourages people to take a cost benefit perspective and not to get too fixated on particular methods that may or may not work.

    The ‘cost benefit perspective’ is one reason why the Reagan administration, although generally considered as ‘to the right’ of the GWB administration, at least, in terms of it’s reliance on free market principles, signed the Montreal Protocol on ozone depleting chemicals.

    A focus on actual versus imagined results is important too. It’s just not clear when a whole of life, product life cycle analysis is used whether a new Prius is indeed a better choice. You may do better by purchasing a second hand gas guzzler and using the cost differences to buy carbon offset credits.

    The insurance approach is not uncommon in other areas of life. Of course “AGW” insurance is collective and communal versus an individual choice. So the concepts don’t map perfectly. Still it is not uncommon for different forms of compulsory third party (CTP) insurance to be imposed by law and the choice of CTP provider to be left to individual consumers. Here in New South Wales all motorists are required to have CTP. I understand some workmen’s compensation regimes work along these lines too. AGW insurance, whether provided as actual insurance or “in kind” via a package of seperate policy provisions, could be imagined as CTP for the planet.

    Reply
  3. John Edwards says

    October 2, 2009 at 11:04 pm

    I found this information and read a few of your posts. It is great info and added it to my alerts. Look forward to reading more from you in the future.

    Reply
  4. Dan says

    December 15, 2011 at 1:23 pm

    Thank you for your kind comments about my blog. You are welcome to write your ideas as comments, as you have done here. And I will be happy to reply to them as time allows.

    Reply

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From Daniel B. Botkin, Ph.D

Daniel Botkin
I believe we are mostly on the wrong track in the way we try to deal with the environment. Everything I do, study, learn, and advise about the environment is different from the status quo. Throughout my career, I have tried to understand how nature works and use that understanding to figure out how we can solve our most pressing environmental problems.

My process over the past 45 years has been to look carefully at the facts, make simple calculations from them (sometimes simple computer models) and then tell people what I have learned. It’s surprising how rarely people bother to look at the facts. This has surprised me every time I’ve started a new ecology research project or work on an environmental issue.

In the course of my work and studies, I have learned many things and I want to tell you about them. That is the purpose of this website.

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