On February 24, 2023, Senate Bill 1115 was introduced for a hearing before the Insurance and Real Estate Committee of the Connecticut Senate. The bill would require the insurance companies that make up one of Connecticut’s major industries to pay the state a 5% tax on the premiums they sell to fossil fuel companies. The legislation follows a number of efforts to promote environmental sustainability and phase out the state’s dependence on fossil fuels in accordance with Gov. Ned Lamont’s 2040 Zero Carbon Goal.
Proponents of the bill argue it would discourage insurance companies from underwriting projects undertaken by fossil fuel companies and encourage more environmentally sustainable alternatives.
“Connecticut taxpayers bear the full cost of climate change,” Sunrise Project’s Karin Jordan wrote in a recent press release. “This bill seeks to shift that balance and put a strain on industries that are contributing to the climate crisis.”
SB 1115 will use the proceeds from the 5% fee to encourage government investment in sustainable energy. Proceeds go to the Department of Energy’s Climate Resilience Fund to subsidize “climate adaptation and resilience planning” for vulnerable people, and the Connecticut Department of Health’s Premium Assistance Program to help finance a steadily rising economy. It aims to help low-income communities struggling with Insurance fee.
Samantha Dynowski, state director of the Sierra Club, one of America’s oldest and most influential environmental groups, was one of the many witnesses to support SB 1115.
“No project can survive without insurance,” Dynowski said in an interview with T.
tDaily Campus. “Insurers are not stepping up in the way they should.”
“First, stop investing in and underwriting new fossil fuel projects. Second, urge them to adopt policies to prevent the continuation of this climate change harm.”
American insurers like Hartford and Travelers in Connecticut lag behind European insurers on key sustainability indicators. According to financial services network EY, the European insurance market leads by a wide margin on indicators of environmental, social and corporate governance (ESG) activity.
Insurers will need to “align their policies along the 1.5 degree trajectory” set out in the Paris Agreement, Dynowski said.
Major insurers Hartford and Travelers recently announced environmental sustainability measures to comply with net-zero policies, but fall short of other indicators. Sustainability advocates believe that investing in and underwriting sustainable projects by these companies is not only a better strategy, but also leads to much better optics.
“They would be wise to do it and market themselves for doing it,” says Dynowski. “This is not only a good investment, it is also the right investment.”
Dynowski notes that there is vast untapped solar potential for rooftops and parking lots, and recent energy analysis suggests that the construction and operation of utility-scale wind farms and solar It is assumed to be overall cheaper than operating existing gas power plants.
The Connecticut Environmental Quality Council notes that “the percentage of electricity coming from zero-carbon sources is declining,” despite Congress-passed zero-carbon energy supply plans.
“We’re still digging, but we’re also trying to fly,” Dynowski said. “Stop digging holes!”
Dynowski is advocating a moratorium on installing new pipelines, power plans, and introducing zero-emissions strategies for new construction in Connecticut. The historic investment from the Inflation Reduction Act should go to sustainable energy projects that will help Connecticut further its energy goals, she argues.
Overall, Dynowski emphasized that the fight for climate justice is not just an issue for state legislatures or the US Congress. A University of Connecticut alumnus, Dainowski makes no secret of his admiration and support for decarbonization efforts here on campus.
“It’s a great opportunity to lead by example,” says Dynowski.