SACRAMENTO, CA – Today Governor Brown signed Senate Bill 30, the nation’s first law to explore using insurance to protect the state’s forests and wetlands that guard communities from the impact of climate change.
SB 30 orders the Department of Insurance to create a working group to recommend market-based policies that protect California’s “natural infrastructure” to reduce the severity of climate-related disasters.
Examples of California natural infrastructure include coastal marshes that can protect communities from flooding, wetlands that can buffer communities from storms and recharge aquifers, and healthy forests that can withstand wildfire and provide cooling effects during heat waves.
“California’s forests and wetlands are standing between us and catastrophe, and climate change is pushing them to the breaking point,” said Senator Ricardo Lara (D-Bell Gardens). “Instead of passing costs on to homeowners we need the insurance industry to join us in this fight to protect our natural infrastructure before it is too late. Climate insurance can help us protect healthy forests to prevent wildfires.”
SB 30 is inspired an innovative program in Cancún, Mexico, where local government, business and The Nature Conservancy partnered with an insurance company to support conservation efforts and restoration if a major storm causes coral reef damage.
“We are thrilled that the Governor signed this bill to engage the insurance industry in the fight against climate change,” said Louis Blumberg, Director of the California Climate Change program at the Nature Conservancy. “By investigating this new market tool in California, we are taking a vital first step to reduce the risk and impact of climate change on people and nature.”
Innovative insurance mechanisms for natural infrastructure could help reduce risk and lower costs for homeowners, while making funds immediately available for restoration following a disaster.
Researchers predict that the risk and costs of natural disaster will increase in California. The National Climate Assessment warned of increased risk of wildfires driven by extreme weather, and a recent report showed 20,000 California homes at risk of flooding from rising sea levels in coming decades.
More than 50 people have died in wildfires that destroyed more than 10,000 structures over the past two years.