Last month, Sen. Joseph Lieberman (I. CT) and Sen. John Warner (R. VA), respectively the Chairman and the Ranking Member of the Senate Environment and Public Works Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection, formally introduced to Congress “America’s Climate Security Act of 2007”, which if enacted, would empower the Administrator of the Environmental Protection Agency to establish a Federal program whereby the Environmental Protection Agency would have the duty and authority to reduce greenhouse gas emissions in the United States. The stated purposes of the Climate Security Act are: "(i) to establish the core of a Federal program that will reduce United States greenhouse gas emissions substantially enough between 2007 and 2050 to avert the catastrophic impacts of global climate change; and (ii) to accomplish that purpose while preserving robust growth in the United States economy and avoiding the imposition of hardship on United States citizens".
The Climate Security Act, through the proposed Federal program, will aim to reduce America’s greenhouse gas emissions in the electric power, transportation and manufacturing sectors by capping the emissions of the six primary greenhouse gases: carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, hydrfluorocarbons and perfluorocarbons.
In the event the Climate Security Act is passed, entities subject to the Act will be statutorily required to reduce their respective greenhouse gas emissions as well as maintain such emissions in the future as per the emission levels set forth under the Act. Therefore, the reducing and maintaining of greenhouse gas emissions will present new risks for the subject entities and in turn such risk present insurance companies with the opportunity to create new insurance programs, products and services.