Why Aren't We Buying Insurance Against Global Warming?

Dyman & Associates Insurance Group of Companies

Every responsible person carries insurance against all sorts of life's potential catastrophes. We don't think twice about buying health insurance, home insurance, car insurance, life insurance, liability insurance, and it goes on and on.

From a gambler's perspective, these are all sucker bets. Insurance companies make their big bucks by tipping the actuarial odds in their favor so that they can pay off far less in reimbursements than they receive in premiums.

We are willing to richly reward insurance companies in this way because they spread the risks across a large group. The individual pays the extra price to gain security and peace of mind. Which brings us to the two life or death questions now facing our species: Why we are failing to take out an insurance policy against global warming? Can we wise up before it is too late? The risks that we are causing and will suffer from a future environmental catastrophe couldn't be clearer. Atmospheric and oceanic carbon dioxide is rising at an alarming rate. Computer models predict drastic temperature and sea level changes with increasing certainty. The population explosion and the rapid growth in per capita consumption are together befouling our atmosphere and draining irreplaceable supplies of fossil water.

And the effects of global warming are likely already upon us. Year after year of record-setting world mean temperatures. Unprecedented droughts in California. Unprecedented rains in England. Atlanta colder in January than Anchorage. Supposedly once-in-a- hundred-year weather disasters happening every few years.

Perhaps these are all flukes, but should we complacently bet the species on the blind hope that someday we can work out a technological fix. Prevention is much better than cure, especially since there may not be a cure or the cure may be too late to save the day.

We should be taking out an insurance policy. Why aren't we? Why are we the selfish generation that failed to save the earth for our grandchildren and their children. The times they are fast a changing and clearly we are not changing fast enough to keep up with them.

Part of the problem is human nature. Living in a harsh world, our ancestors faced an uphill battle for day-to-day survival and couldn't anticipate or plan for the prospect of a long-term future. Evolution has therefore favored short-term, short-sighted decision-making. It is not within human psychology to be very good at really long-term planning -- especially for things that are difficult to visualize.

Part of the problem is corporate psychology. Executives and shareholders think in terms of quarters, not decades or centuries. The smart short-term profit play is to spend hundreds of millions casting doubt on environmental science, electing science denying politicians who can't see past election day, and propagandizing the public into numb inaction.

The basic pitch is 'do nothing' until we can prove beyond a shadow of a doubt that we are irrevocably ruining our environment. Of course, this is brutal and ruthless cynicism -- by then it will be too late to save ourselves and prevent the environmental catastrophes, famine, war, and pestilence that will inevitably follow. 'Apres moi, le deluge'. Let the grandchildren suffer. We don't wait to develop an illness before taking out health insurance, or an accident for car insurance, or apply for fire insurance after the fire starts. The whole meaning of insurance is that you buy it early and without certainty you will ever need to use it.

The same foresight should inform our approach to global warming insurance. This would take the form of paying the price now for systematically reducing the risk of future catastrophes for our children and their children. This needs to be done immediately -- before we can be absolutely certain how grave are the risks and how far in the future is the tipping point. That's what insurance is all about.