On Feb. 24, 2023, Senate Bill 1115 was presented for public hearing at the Connecticut State Senate’s Insurance and Real Estate Committee. The bill would require insurance companies, who make up one of Connecticut’s flagship industries, to pay a 5% tax to the state on any insurance premiums they sell to fossil fuel companies. The legislation follows a number of efforts to promote environmental sustainability and phase out the state’s reliance on fossil fuels in accordance with Governor Ned Lamont’s 2040 zero-carbon target.
Proponents of the bill argue that it would discourage insurance companies from underwriting projects undertaken by fossil fuel companies and encourage more environmentally sustainable alternatives.
“Connecticut taxpayers are on the hook for the full cost of climate change,” Kalin Jordan of the Sunrise Project wrote in a recent press release. “This bill attempts to shift that balance and put the burden on the industries that are fuelling the climate crisis.”
SB 1115 utilizes the revenue from the 5% fee to promote government investment in sustainable energy. Proceeds go to the Department of Energy’s Climate Resilience Fund, which provides grants for “climate adaptation and resilience planning” for vulnerable populations and a Premium Assistance program in the Connecticut Insurance Department, which aims to assist low-income communities who struggle to afford steadily rising insurance premiums.
Samantha Dynowski, State Director of the Sierra Club, one of America’s oldest and most influential environmental organizations, was one of many who gave testimony in favor of SB 1115.
“There’s no project that can survive without insurance,” Dynowski said in an interview with Tthe Daily Campus. “Insurance companies have not stepped up in the way they need to.”
“First, stop investing and underwriting new fossil fuel projects,” she details, “Second, push them to adopt policies to prevent them from continuing this climate damage”.
America’s insurance companies, like Connecticut’s own the Hartford and Travelers, trail behind European counterparts in key sustainability metrics. According to financial services network EY, the European insurance market tops indexes for environmental, social and corporate governance (ESG) activity by significant margin.
Insurance companies must “align their policies with the 1.5 degree pathway,” enshrined by the Paris Accords, Dynowski said.
The Hartford and Travelers, insurance giants, have recently announced environmental sustainability measures to conform with net-zero policies, but fall short of other metrics. Sustainability advocates believe that investment and underwriting from these companies in sustainable projects would be not only a better strategy, but lead to much better optics as well.
“They would be wise to do it and market that they’re doing it,” Dynowski says. “It’s not only a good investment, but the right investment.”
Dynowski points to enormous untapped solar potential in rooftops and parking lots and recent energy analyses that posit the building and operating of utility scale wind & solar plants is cheaper overall than the operation of an existing gas plant.
The Connecticut State Council on Environmental Quality notes that even in spite of zero-carbon energy supply plans passed by the legislature, “the percentage of electricity from zero-carbon sources has been declining”.
“We’re still digging the hole at the same time we’re trying to fly,” Dynowski said. “We have to stop digging the hole!”
Dynowski advocates for a moratorium on installing new pipelines, power plans and the imposition of a zero-emission strategy on new construction in the state of Connecticut. Historic investment by the Inflation Reduction Act should, she argues, be put to use on sustainable energy projects that would see the state of Connecticut make further progress on its energy goals.
Overall, Dynowski emphasized that the fight for climate justice is not just an issue for the state legislature or for the United States Congress. Dynowski, a University of Connecticut alumni, does not hide her admiration and support for efforts here on campus to decarbonize.
“It’s such a tremendous opportunity to lead by example,” Dynowski said.
