Global Warming and Buying Insurance

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.