Coal is on the Road to Becoming Completely Uninsurable
c0lo writes:
[Emphasis is from original. --Ed.]
The announcement by Suncorp that it will no longer insure new thermal coal projects, along with a similar announcement by QBE Insurance a few months earlier, brings Australia into line with Europe where most major insurers have broken with coal.
US firms have been a little slower to move, but Chubb announced a divestment policy in July, and Liberty has confirmed it will not insure Australia's Adani project.
Other big firms such as America's AIG are coming under increasing pressure.
Even more than divestment of coal shares by banks and managed funds, the withdrawal of insurance has the potential to make coal mining and coal-fired power generation businesses unsustainable.
As the chairman and founder of Adani Group, Gautam Adani, has shown in Queensland's Galilee Basin, a sufficiently rich developer can use its own resources to finance a coal mine that banks won't touch.
But without insurance, mines can't operate.
(Adani claims to have insurers for the Carmichael project, but has declined to reveal their names.)
Why are insurers abandoning coal?
By the nature of their business, insurers cannot afford to indulge the denialist fantasies still popular in some sectors of industry. Damage caused by climate disasters is one of their biggest expenses, and insurers are fully aware that that damage is set to rise over time.
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