An Analysis and Discussion of The Impact of the 2013 Federal Ins. v. MBL Decision on Cumis Conflict Cases, presented by John Reaves and Les Robertson to the San Diego County Bar Association Insurance Bad Faith Section on July 14, 2015

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Major Fossil Fuel Companies See Need for Climate Action

http://www.utsandiego.com/news/2014/aug/21/fossil-fuel-majors-climate-action/

Major Fossil Fuel Companies See Need for Climate Action

Major fossil fuel companies have spent much energy to determine whether the fuels they sell actually cause climate change. The bottom line? They do and, perhaps surprisingly, many of them own up to it and are calling for federal action.

The fossil fuel finding offers another firm reason to move forward to safeguard our future. Even if we’re uncertain of the potential worst effects, we need an insurance policy.

There is growing concern among these major companies over climate change and a call for equitable federal action.

Shell minces no words: “CO2 emissions must be reduced to avoid serious climate change.” U.S. power provider NRG says, “Global warming is one of the most significant challenges facing humankind.” Major coal user, American Electric Power, also recognizes the problem.

Then there’s ExxonMobil, which according to DeSmogBlog pumped more than $23 million into climate denial groups, including Heartland Institute, from 1998 until a few years ago. ExxonMobil now reports “Rising greenhouse gas emissions (GHG) pose significant risks to society and ecosystems.”

Furthermore, BP cites the Intergovernmental Panel on Climate Change reports as evidence of climate change. ConocoPhillips says burning fossil fuels can lead to climate disruption. Chevron, Hess, BHP Billiton and Total share these concerns.

Most of these companies propose pragmatic policies to combat climate change.

For instance, BP proposes an economywide price on carbon that treats all carbon equally and makes lower-carbon energy sources more cost competitive. Shell wants a strong, stable price for GHG emissions within a comprehensive policy framework. Hess wants all affected parties treated equitably.

ExxonMobil wants a uniform, predictable carbon price and the market to drive selection of solutions. It wants to promote global participation, minimize complexity, and maximize transparency. It promotes a revenue-neutral carbon tax.

BHP Billiton supports broad, efficient, progressively introduced, market-based mechanisms. ConocoPhillips wants market-based mechanisms, investment certainty, and a level playing field among energy sources and countries.

Here’s a road map to consider that is consistent with the warnings and policy preferences of these companies. First, stop doing harm. Where practical, stop investing in fossil fuels and infrastructure that locks in additional GHG emissions for 50 years or more. Then address new energy needs using renewables while stretching our energy budget through efficiencies. Engage in massive energy research to ensure that storage systems, already entering the market, advance quickly, making large amounts of renewable energy available off-hours. Spread the use of geothermal and hydropower to address baseload demands. Finally, extend and fortify electrical grids to connect remote major renewable sources to markets and better integrate distributed energy services.

To make any difference, we must effectively price carbon emissions. A steadily rising, revenue-neutral carbon pollution fee is a most promising overarching policy. Returning all fees to all households would effectively create a progressive fee structure, because two-thirds of households would gain or break even. The dividend protects the least well off in society from harsh impacts and would be stimulative to the economy. Border tariffs would protect our businesses from competition that does not have a fee and therefore prompt other nations to adopt our fee. Consumers would have incentives to make better decisions about energy use, further stimulating innovation.The International Monetary Fund also has called for a price on carbon: Energy prices around the world “are set at levels that do not reflect environmental damage, notably global warming.” Two bills have recently been introduced that move partly in the right direction: Rep. Chris Van Hollen (D-MA) (permit for fossil fuels; all returned to households) and Rep. Jim McDermott (D–WA) (permits; 75 percent returned to households; 25 percent to deficit reduction).

The fee and dividend improves on those bills. For several years Citizens Climate Lobby (CCL) has advocated this federal policy. CCL commissioned Regional Economic Modeling, Inc., a highly reputed economic policy forecasting company, to assess the impacts of such a policy. The results are attention grabbing. With $10 added yearly to a carbon fee and 100 percent rebated to households, by the 20th year there would be 2.8 million new jobs, $1.3 trillion boost to GDP, a quarter million lives extended (cleaner air), and 52 percent reduction in carbon dioxide.

Who can’t like an approach where economy and environment both win? The big question is: Will this be enough to make Congress finally act?

Reaves, a San Diego business and environmental lawyer and mediator, was a founding director of the Citizens Climate Lobby. Hering, a retired Navy rear admiral, is executive director of the California Center for Sustainable Energy.

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Climate change Threats Exist – Letter to the Editor San Diego Union Tribune

CLIMATE CHANGE THREATS EXIST
Reprinted from the San Diego Union Tribune February 25, 2014

Regarding the Feb. 22 op-ed “Unsettled science,” by Charles Krauthammer, Krauthammer’s recurring sarcasm over climate change and biblical references to “whoring” puzzle me.

Climate science may be incredibly complex, but risks can be assessed. While modeling can’t predict all variations, 98 percent of peer-reviewed climatologists warn of danger.

Many models are remarkably successful, but none is perfect, especially in gauging exactitudes. (Will La Nina appear and cool surface air but swirl heat deeper into oceans?)

Krauthammer mentions a couple of misleading points. He may claim to be agnostic on climate, but he sounds uninformed, scornful and reckless rather than contemplative of threats nearly all climatologists, National Academy of Science, military strategists, reinsurers, oil industry, etc., say we face, and we already see.

Here’s a reasonable analogy: Modeling can’t say exactly which cigarette smokers will die and when, but the risks are scientifically settled.

John Reaves

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Some Regulation Needed for Well-Being. Letter to Editor San Diego Union Tribune

Reprinted from San Diego Union Tribune Oct. 29, 2013

SOME REGULATION NEEDED FOR WELL-BEING

Regarding the “Regulation gone wild” duo of op-eds (“Fixing California,” Oct. 27), the U-T’s regular diatribe against environmentalists — do what you want with property and business and kill regulation reflecting environmental concerns — is myopic and old.

We have a large population with competing views on the need and cost of preserving diminishing natural resources, reducing pollution, and fighting climate change. There is always a tug of war between government creating regulations to protect broader interests and the narrow interests of business and property owners. Yet, without them, we often see the “tragedy of the commons.”

The auto industry fought California’s requirement of technology-forcing catalytic converters a few decades ago, but massive improvements in air quality resulted, despite more people and cars. Climate change is today’s front.

I don’t agree with all governmental regulation, but promoting environmental values while balancing economic interests is essential to our well-being. That’s not extreme.

John H. Reaves

San Diego

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Value in Carbon Pollution Disposal Fee. OpEd by John Reaves and Ret’d RADM Len Hering

Value in carbon pollution disposal fee.

San Diego Union Tribune. September 12, 2013

With President Obama’s June directive that the Environmental Protection Agency draft regulations to reduce power plant emissions, industry might consider supporting a broader, more effective approach.

First, let’s acknowledge the reality of climate change. It’s manifesting everywhere (8-inch sea rise; ice caps and glaciers receding; warming, acidifying oceans; storms on steroids). Ninety-seven percent of climatologists conclude fossil fuels cause global warming, according to a study by Dr. James Powell of the National Science Board. Most oil and gas experts know these truths, as do our military and national security officials. The latter have expressed concerns that climate change will flood populated coastal areas, undermine food supplies, and cause mass migrations of refugees, all of which would destabilize the world. Climatologists say we are heading there without major greenhouse gas reductions.

Leaders in industry and government hold an awesome responsibility for our future. Will they rise to the occasion?

Several major oil companies have expressed concern about climate change and have embarked on developing renewable energy. Unfortunately, most have retrenched considerably because renewables are less profitable than fossil fuels, which don’t include the full cost of greenhouse gas pollution. We have a herculean problem, and profit margins cannot be the deciding factor. Industry can help by telling Congress climate change is serious and calling on lawmakers to level the field for clean energy with a fair price on carbon.

Most industry leaders believe greenhouse gas pollution should not be free. ExxonMobil’s CEO, Rex Tillerson, expressly supports a carbon tax. Expecting a price on carbon, many companies already discount the value of their reserves.

Here’s an option: Start adding a carbon pollution disposal fee to fossil fuels by roughly $15/ton each year (about 15 cents per gallon of gasoline). Everyone then has skin in the game. Economists and businesses like the predictability. The free market will innovate. Make the fee “revenue-neutral” — keep government hands off and return all fees to households to offset the burden. ExxonMobil supports a “revenue-neutral carbon tax mechanism.” Rebate fees to U.S. companies for exports to countries without the fee. Tack our fees on imports if the exporting nation lacks the same, compelling other countries to join.

The disposal fee is simple to implement: collect at the wellhead, mine, and port of entry. The fee will exponentially accelerate the development of non-carbon energy in the United States by making it more price-competitive. A disposal fee invites an orderly transition and would enhance our world competitiveness. Renewables are a tiny percentage of our current energy mix, but in 20 years they could be substantial, helping buffer price spikes in fossil fuels.

While some still attest climate has always changed, civilization was built in the past 10,000 years in relative climate calm, mostly in coastal areas. But today’s rate of warming of atmosphere and oceans is unprecedented. Most greenhouse gases last decades to centuries in the atmosphere. It is urgent we correct course and diversify before the stage is set too far. It will be impossible to adapt to upheavals that will occur with the major climate change predicted with business as usual. The common understanding that industry fuels lives to a better future is at odds with the slow-motion staging of major, intractable climate change that will prove disastrous to 7 billion-plus people.It’s time to place strong policy into action. Like insurance, hedging risk and diversifying assets now are critical. What will it take for industry leaders to act courageously and make a real difference?

Industry’s expertise and scale can be a substantial part of the solution. Our military — already making major strides in reducing fossil fuel use — will be supportive. With a predictable, rising disposal fee, and removal of tax rules that incentivize fossil fuel development, clean energy will become more profitable and affordable.

While a disposal fee is not the only solution, it could be an integral piece. With consistent resolve and policies, today’s uneven puzzle can line up with broader world involvement in solutions. When investors know the future is in renewables, there will be breakthroughs we cannot imagine.

Reaves is a lawyer based in San Diego and was a founding director of the Citizens Climate Lobby. RADM Hering, retired from the Navy, is recognized for his efforts in sustainability and is currently the California Center for Sustainable Energy’s executive director.

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FEELS TIME IS RIGHT FOR CARBON POLLUTION FEE (Letter to the Editor)

Reprinted from the San Diego Union Tribune August 12, 2013.

FEELS TIME IS RIGHT FOR CARBON POLLUTION FEE

Three articles were published this past week on climate change.

The first concerned a poll showing an overwhelming desire by Californians to combat climate change. Seventy-seven percent say global warming is “very serious” or “somewhat serious,” and 65 percent want immediate steps to counter it.

The second discussed the National Oceanic and Atmospheric Administration report confirming “rapid” and “remarkable changes” in key global warming indicators, including spikes in ocean temperatures and record Arctic and Greenland ice melts, and that 10 of the past 15 years have been the hottest since 1880.

The third discussed a state report showing broad effects already occurring in California, including ocean acidification.

Isn’t it time we urge a national revenue-neutral carbon pollution fee, with a rebate to all households, to start the necessary course correction?

John Reaves

San Diego

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Climate Debate Heats Up (Letter to the Editor)

Reprinted from San Diego Union Tribune, May 22, 2013.
Letter to the Editor in response to Lamar Smith’s opinion, “Needed: Better Debate on Climate and Energy” (San Diego Union Tribune, May 21, 2013).

Lamar Smith’s dogmatic view of climate is exactly why climate change will soon split the Republican Party. It is embarrassing that Smith, Chair of the House Committee on Science, Space, and Technology, refuses a hard look at the science. Over 97% of peer-reviewed climatologists say fossil fuels are causing climate change. Yet Smith is essentially calling them (and we who heed their caution) fools while repackaging disproven pro-industry sound bytes against climate science – designed to stop innovation (their competition) and U.S. leadership. He presses for dirtier, unconventional fuels the same week CO2 dangerously crossed 400 parts per million. Shame on this paper for republishing propaganda. We need a revenue-neutral carbon fee and rebate, and removal of fossil fuel tax incentives, to start course correction.

John H. Reaves

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Pope and Climate Change (Letter to the Editor)

Reprinted from the San Diego Union Tribune (3-23-13)
POPE AND CLIMATE CHANGE

Pope Francis calls on people around the world to protect the poor and the environment. He will certainly be continuing the call by the Vatican in May 2011, through the report by the Pontifical Academy of Sciences, called “Fate of Mountain Glaciers in the Anthropocene.” In their declaration, the working group for the report called, “on all people and nations to recognize the serious and potentially irreversible impacts of global warming caused by the anthropogenic emissions of greenhouse gases and other pollutants, and by changes in forests, wetlands, grasslands, and other land uses.” May the new pope be a strong new voice to avert the worst of climate change, which will impact the poor the worst. – John H. Reaves, San Diego

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Keystone, Energy Concerns (Letter to the Editor)

Reprinted from the San Diego Union Tribune (March 6, 2013)
Regarding the editorial “Keystone pipeline: Reason trumps hysteria” (March 5): U-T, why the name-calling and selective reasoning? The State Department – in a twist of logic – says Keystone would create minimal environmental damage because Alberta tar sands’ exploitation is inevitable (but questions our need for it due to the U.S. boon in oil). Canadians are fighting this, too. Climatologists warn tar sands exploitation is a giant step backward.

CO2 must decrease. The U-T has acknowledged global warming is real but now ignores the science. Ideological schizophrenia? Why disdain for those with contrary view, supported by 99 percent of peer-reviewed climatologists? To commit infrastructure and our future to dirty tar fuels is short-term and blind (one-third the size of California will be destroyed). The technology exists to build a clean energy future, which produces more jobs than oil and gas. A revenue-neutral carbon pollution fee, returned to all households, accelerates the conversion. – John H. Reaves, San Diego

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Keystone XL Pipeline opposition LTE

From the San Diego Union Tribune (printed February 2, 2013)

The paper’s editorial supporting the Keystone XL pipeline (“Time for Obama to reverse Keystone stand,” Jan. 26) shows the ideological shift of the paper’s new management and disregard for science. In the past, the paper acknowledged the science shows climate change is occurring as a result of fossil fuels and that we need to address the problem. Now, however, the paper says “The environmental risks (of Keystone) are minimal.”

Dr. James Hansen and countless other climatologists vehemently disagree. Hansen says it is “game over” for the climate if Keystone is approved. Why? Because a massive carbon bomb will be released if the tar sands are exploited that will force CO2 and global temperature to far overshoot acknowledged dangerous levels. Also, the scale of the Florida-size devastation resulting from scouring the earth to access bitumen, and loss carbon-absorbing forests, are hard to fathom.

We need to push for an international treaty to keep all tar sands in the ground. – John H. Reaves, San Diego

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