Criminology and Climate

Insurance, Finance and the Regulation of Harmscapes

Cameron Holley, Liam Phelan, Clifford Shearing, Cameron Holley, Liam Phelan, Clifford Shearing

• Publisher: Routledge
• Year: 2020
• Print ISBN: 9780367683665
• eBook ISBN: 9780429574955
• Edition: 1
• Topic: Business
• Subtopic: Insurance
• Index: Business

This book explores the role of the insurance industry in contributing to, and responding to, the harms that climate change has brought and will bring either directly or indirectly. The Anthropocene signifies a new role for humankind: we are the only species that has become a driving force in the planetary system. What might criminology be in the Anthropocene? What does the Anthropocene suggest for future theory and practice of criminology? Criminology and Climate, as part of Routledge's Criminology at the Edge Series, seeks to contribute to this research agenda by exploring differing vantage points relevant to thinking within criminology.

Contemporary societies are presented with myriad intersecting and interacting climate-related harms at multiple scales. Criminology and Climate brings attention to the finance sector, with a particular focus on the insurance industry as one of its most significant components, in both generating and responding to new climate 'harmscapes'. Bringing together thought leaders from a variety of disciplines, this book considers what finance and insurance have done and might still do, as 'fulcrum institutions', to contribute to the realisation of safe and just planetary spaces.

An accessible and compelling read, this book will appeal to students and scholars of criminology, sociology, law and environmental studies and provides readers with a basis to analyse the challenges and opportunities for the finance sector, and in particular the insurance industry, in the regulation of climate harms.

1Dark clouds

Regulatory possibilities

Cameron Holley, Liam Phelan, and Clifford Shearing*

Tomorrow belongs to the people who prepare for it today.

(African Proverb)

This book arises at a time when our skies are dark, and are becoming darker. There is now irrefutable evidence that the temperate era of the last 12,000 years, the Holocene era, is drawing to a close. We are moving towards a series of tipping points that could well bring an end to the nurturing ‘ecological assemblages’ (Trisos, Merow and Pigot, 2020) and Schumacher's (1973) ‘natural capital’, which provided humans and many other species with the provision of essential ‘ecosystem services’ (Farber, Costanza and Wilson, 2002). During this now vanishing era, the earth has been characterised by what Rockström et al. (2009: 1) have termed ‘planetary boundaries’ that provide a ‘safe operating space for humanity’.

The warning that these dark clouds carry with them is that we humans have been, especially since we have begun living in industrial societies, systematically destroying the very basis of our existence – an engagement that Brisman and South (2018) compare with self-cannibalism, autosarcophagy. This autosarcophagy has been, and continues to remain, the consequence of carbon-intensive economies – ways of being, built on fire and the heat it produces (Hartmann, 1999).

Hidden in these dark clouds is the spectre of collapse (Diamond, 2005), a collapse that, as Umair Haque (2019) has recently argued, emerges from the bottom-up. This is a collapse of the biospheric foundations (see also Smil, 2002), upon which humans, as biophysical and social creatures, depend for their existence and upon which they have built their worlds. Yet, despite this complete dependence on these foundations, humans have collectively paid very little, if any, attention to them. The consequences in this ‘age of collapse’, according to Haque (2019), is that ‘the bottom [is] depleted, which causes the middle to implode, which takes the top away with it, too’.

* Chapter 1 draws on ideas initially presented in Holley, C., Mutongwizo T. and Shearing, C. (2020). ‘Conceptualizing Policing and Security: New Harmscapes, the Anthropocene, and, Technology’, Annual Review of Criminology, 3, pp. 341–358.

Back in 2017, as we began planning this volume, we settled on the term ‘harmscapes’ to conceptualise the evolution of arrays of intersecting and interacting harms. Climate change is a primary exemplar (Berg and Shearing, 2018: 75): a globally coherent phenomenon that creates myriad diverse harms, manifesting in multiple and connected ways. Climate change harms play out at multiple spatial and temporal scales: spatially, harms range from localised to global scales, and temporally, some harms are immediate, others are delayed, and others again are, from any meaningful human perspective, effectively permanent. Climate change is a change process characterised by non-linear dynamics and threshold effects: as such, impacts can cascade across sectors, and with limited predictability (Duit and Galaz, 2008). The impacts of climate change are dispersed, but uneven. And as with impacts, attribution of climate change, primarily through anthropogenic fossil fuel emissions, is also dispersed and uneven.

Fossil fuels have provided great benefits for contemporary societies, as well as significant costs: as Mitchell notes, ‘[f]ossil fuels helped create both the possibility of twentieth-century democracy and its limits’ (Mitchell, 2009: 399). As such climate change presents a profound challenge to regulatory approaches and frameworks, and one that we use harmscapes to accentuate.

Warnings about climate change, and other environmental catastrophes, that are today at the forefront of our existence, are not new. Indeed, as Bonneuil and Fressoz (2016) have recently spelt out so clearly, they have been articulated for centuries. But they have fallen on deaf ears. Virtually no one has listened, and this remains broadly true today although these warnings are clearer and louder than ever. Rather than heed these increasingly clear warnings of our dark clouds, many political and economic leaders, as they have for some time, continue to treat these very pointed warnings by the very constituency that has enabled our industrial societies to emerge, namely scientists, as the alarmist cries of ‘Chicken Littles’, making absurd claims that the ‘sky is falling’ when only an acorn has fallen.

Fortunately, responses and action have begun to emerge and accelerate – for example, varieties of international and domestic environmental laws, regional and state-led reforms, along with civil society litigation against states and companies, and business-led reforms (Dahlmann et al., 2020; Hamann et al., 2020). At the same time, many of today's political and economic leaders across the world, the current president of the United State of America provides perhaps the prime example, continue to claim that the sky has not changed and that it has most certainly not fallen, and that it will not fall any time soon. It is this attitude of fundamental neglect of the foundational nature of ecosystem services that has driven, and continues to drive, contemporary economies – embraced by businesses both big and small. This attitude is finally being challenged by some, including investment-focused businesses – the focus in this volume – by rethinking their foundational dependencies and incorporating this into wider conception of purpose; what Dahlmann et al. (2020) term ‘purpose ecosystem’.

The essays in this volume explore the response of businesses to climate change, with a particular focus on the insurance industry and the broader finance industry, industries whose existence is central to the global economy but who had (bar concerns over corporate social licence) historically stayed outside of climate and environmental interventions. It is true that criminology and its green variants have extensively critiqued corporate activities that harm the environment and people (see generally Brisman and South, 2020: 19). However, there is value, we argue, in extending our focus beyond established boundaries and traditional institutions of criminal justice to consider the potential of these private auspices and providers of security (see Brisman and South, 2020: 19). A core reason for our focus is that the finance sector occupies a ‘fulcrum position’: if it chooses to act in response to the dark warning clouds, it would likely trigger a cascade of activity that could, in short order, bring about an enormous and crucial reshaping shift in the earth system, which might just provide sufficient mitigation to avoid the emergence of a sixth extinction.

At least two drivers are spurring the finance industry to begin to act. First, under Article 2 of the Paris Agreement, the financial sector was championed by the global community as having a central role in enabling the transition to an environmentally sustainable economy in line with global climate targets, and in building global financial resilience to environmental risks (Grünewald, 2020). Vast amounts of finance for climate action was said to be needed to solve climate challenges: finance that only the private sector has the wherewithal to provide (Gunningham, this volume). But scaling up climate finance – for low-carbon infrastructure, renewable energy, energy efficiency, and other mitigation measures – involved transforming a finance sector that had only just begun its journey towards sustainability. This led to call for a ‘quiet revolution’ (UNEP, 2015; Gunningham, this volume), led partly by financial market regulation and regulators who recognised ‘a need for collective leadership and globally coordinated action’ (NGFS, 2019: 4).

As this quiet revolution began, business leaders recognised the financial risks of climate change, both physical and transitional in nature (Grünewald, 2020). Directly threatened by the emergence of very tangible and costly impacts of post-Holocene earth system changes, insurance and finance industry leaders, most notably perhaps Carney, the former Governor of the Bank of England, sounded loud and shrill calls for change.

The stakes are undoubtedly high, but the commitment of all actors in the financial system to act will help avoid a climate-driven ‘Minsky moment’ – the term we use to refer to a sudden collapse in asset prices…There is a need for [action] to achieve net zero emissions, but actually it comes at a time when there is a need for a big increase in investment globally to accelerate the pace of global growth, to help get global interest rates up, to get us out of this low-growth, low-interest-rate trap we are in…I don't normally quote bankers, but James Gorman, who is the CEO of Morgan Stanley, said the other day: “If we don't have a planet, we're not going to have a very good financial system.” Ultimately, that is true.

(Carney, quoted in Carrington, 2019)

Perhaps recognising that they ‘can't wish away systemic risks', and that ‘in the end, a small investment up front can save a tremendous cost down the road’ (Carney, quoted in Gill, 2020) the financial and insurance industry have been motivated to change. By 2020, the ‘quiet revolution’ in climate finance was, in fact, no longer quiet or niche, but defined by an explosion of sustainable finance-related tools and initiatives driven by private banks, other finance actors, and public and private partnerships (Mancini and Van Acker, 2020: 10). There are now more than 390 policy and regulatory climate finance measures implemented at national, sub-national, and regional levels (Mancini and Van Acker, 2020: 25).

These developments, albeit briefly covered here, reveal an emerging practice of finance and insurance businesses as governors of global environmental security, a fact that led us to pursue this book on criminology and climate.

Criminology, climate change, and the role of private securities

In the global climate change context, criminology is arguably at a crossroads. Globally, we are beginning to rethink safety and security in biophysical terms, which poses a challenge for criminology as an area of enquiry whose fundamental topic has been safety and security (Shearing, 2015). Recognising that security itself is an idea that arguably cannot be constrained into a single discipline (Zedner, 2009: 10; Ngoc Cao and Wyatt, 2016: 415), the joining of environment and security (once common only in international relations' geopolitical focus on environmental impacts upon states, see Brauch, 2008: 31; Chalecki, 2013: 4) has come to include broader understandings, such as legal scholar Hulme's (2009: 25) explanation of the term as capturing ‘the environment's ability to impact on human security and man's ability to impact on the stability and viability of the biosphere’. Similar definitions can be found in green criminology (e.g. see Shearing's (2015: 261) description of environmental security as an umbrella term for ‘water security’, ‘energy security’, ‘food security’, and ‘climate security’) and in international relations (e.g. see Dalby's (2002: 60) description of ‘developing an economic system that reduces dependence on a single resource, a dynamic system that can accommodate change’.

The rise of environmental security concerns (see Dalby, 2002; Chalecki, 2013), prompted vociferously by climate change, has seen criminologists begin to ask what criminology could be, and should be, in this Anthropocene age (see e.g. contributions in Holley and Shearing, 2018). While answers to the question are being explored, the growth of private actors in climate governance may in fact provide rich ground for criminologists to till. As many readers will know, private security provision has in fact been a long, rich, and debated issue in criminology.

Traditionally, the governance of security in criminology (sometimes termed ‘policing’ – see Stenning and Shearing, 2015) referenced activities – particularly activities by government agencies – intended to maintain rule-based relationships with respect to property and the integrity of persons, (prevention) and to respond to breaches of these relationships once they have occurred (law enforcement). For many criminologists, there was typically an acceptance, and indeed an embracing, of a Maitland-esque conceptualisation, which argued that the only way to enhance the delivery of public goods like safety, to be enjoyed by all, was to ensure the adv...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• List of illustrations
• Preface
• Acknowledgements
• List of contributors
• 1 Dark clouds: Regulatory possibilities
• 2 Co-creating sustainable risk futures: A role for insurers
• 3 Crime, regulation and climate finance
• 4 Speak loudly and carry a small stick: Prudential regulation and the climate, energy, and finance nexus
• 5 The contradictory roles of the insurance industry in the era of climate change
• 6 Quantifying changing climate risks and built environments in Australia: Implications for lenders, insurers and regulators
• 7 The influence of government regulation on insurers’ responses to climate change
• 8 Insurance in the Anthropocene: Exposure, solvency and manoeuvrability
• 9 Finance actors and climate-related disclosure regulation: Logic, limits, and emerging accountability
• 10 Towards attribution-based climate insurance: Redefining who should pay for weather-related insurance
• Index