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Within just a week, the sheer devastation of the Los Angeles wildfires has pushed to the fore fundamental questions about the impact of the climate crisis that have been largely avoided by lawmakers, influencers, and the public. Among them: What is the future of insurance when peoples homes are increasingly located in areas of climate riskwhether wildfires, hurricanes, flooding, or the rising sea levels? Those questions have bedeviled policy makers in Californiawhere insurance giants like State Farm, Farmers, and Allstate announced last year that they were no longer writing new policies in the state due to the surge in wildfires (in 2024 alone, firefighters across the state battled 8,024 wildfires that burned more than 1 million acres and destroyed 2,148 houses and other structures). Insurers have long been aware of the risk of climate changerising premiums, increasing losses. In 1973, the German insurance firm Munich Re published a brochure on flooding that it claims was the first use of the term climate change in the industry, warning of the growing risk of rising temperatures and increased carbon dioxide in the air. Some 40 years later, the CEO of French insurance giant AXA said it would be impossible to insure a world that is 4 degrees Celsius (7.2 Fahrenheit) warmer. Nonetheless, insurance companies have become some of the biggest financiers of fossil fuels, which are the primary cause of climate changethe extraction and burning of oil, gas and coal are responsible for over 75% of greenhouse gas emissions and nearly 90% of carbon dioxide emissions. Fossil fuel companies made up 4.4% of the investment portfolio of the insurance industry in 2023, up from 3.8% nine years earlier. Two insurance giants, Berkshire Hathaway and State Farm, increased their fossil fuel positions by around $200 billion in that period. Overall, however, more than half of the countrys 238 property and casualty insurers recently surveyed by the Wall Street Journal have reduced their investments in oil, gas, and coal over the past decade. But while insurers around the world have restricted their coverage of fossil fuel projects, U.S. companies continue to write policies for conventional oil and gas projects. Spokespersons for State Farm and Berkshire Hathaway did not respond to requests for comment. Its a vicious cycle, some insurance industry experts say, with insurers investing their customers premiums in fossil fuel companies, whose activities accelerate climate change, which in turn increases the risk of the wildfires, super storms, and flooding that are causing insurers to drop coverage for millions of homeowners in order to avoid losses. Thats a significant amount of capital that is supporting polluting industries, said Frances Sawyer, the founder of Pleiades Strategy, which works to stimulate climate action. That hasnt been as much of a focus as it should be in their total structural riskfossil fuel investments that are directly making the risk environment worse that theyre handling on the other side of the balance books. By the numbers, climate change is having an enormous impact on the industry. The insured weather losses attributable to climate change have increased from 31% to 38% in the last decade, an annual increase that significantly outpaced the growth of losses in other sectors. Overall, about $600 billion in such losses over the last two decades can be attributed to climate change, according to a report by Insure Our Future, a global consortium of groups pushing insurance companies to stop investing in fossil fuels. For many insurers, the losses are not being offset by the premiums they collect from their coverage of fossil fuel companies. For more than half of the 28 leading insurance companies, their estimated losses due to climate change exceeded their fossil fuel premiums. Overall, climate-attributed losses for all 28 insurers totaled $10.6 billion, erasing most of the $11.3 billion they collected in premiums from fossil fuel companies. As a result, insurers have now dropped more than 1.9 million home insurance contracts since 2018, with nonrenewal notices tripling in more than 200 counties across the country, according to a recent congressional investigation. The burden falls heaviest on lower-income Americans and people of color. About 15% of the countrys homeowners who earn less than $50,000 a year are uninsured, according to the Consumer Federation of America. And 14% of Latino and 11% of Black homeowners are uninsured. Increasingly, more Americans are underinsured, making it likely that the full cost of reconstructing a house wont be reimbursed. A University of Colorado Boulder study on the 2021 Marshall Fire, the worst in that states history, revealed that 74% of affected homeowners were underinsured. Among them was Erica Solove, a mother of two who was forced to flee their family home barefoot when it was destroyed in the Marshall Fire. Because her policy reflected the valuation of her home when she bought it years ago, it wasnt nearly enough to help build a new home. She had to rely on savings and a GoFundMe campaign to finish reconstruction. When she tried to get homeowners insurance for that home, We were rejected by all of them, she said. The insurance companies are not being held responsible for not insuring people to any reasonable level reflecting the current reality, said Solove, who started the group Extreme Weather Survivors, and recently started an online Slack community for California wildfire survivors. Its not an individual problem, its a systemic industry problem. And the cost of homeowner insurance has skyrocketed, jumping more than 30% between 2020 and 2023 (13% adjusted for inflation), according to a study by the National Bureau of Economic Research. That dynamic has increased pessure on insurers to shun the fossil fuel industryboth by no longer providing coverage to oil, gas, and coal projects and by no longer investing in the industry. Insurers self-reinforcing cycle of driving climate risks higher and restricting coverage for those risks is threatening public interest and financial stability, warned Insure Our Future. Some insurance giants are taking stepsItalys largest insurer, Generali, announced in October 2024 that it will no longer provide new coverage for oil and gas companies in the midstream and downstream sectors, which includes liquefied natural gas terminals and gas-fired power plants. But U.S. insurers in general continue to back the industry, and they have played a prominent role in the liquefied natural gas boom along the Gulf Coast. All of the senior lenders for the giant Rio Grande LNG terminal in Texas were insurance companiesFidelity & Guaranty Life Insurance (F&G), Everlake Life Insurance, American General Life Insurance, Security Life of Denver Insurance, Symetra Life Insurance, and Allianz Life Insurance of North Americaaccording to an SEC filing by the developer, NextDecade. Spokespersons for the companies did not return requests for comment. That role was highlighted in an industry publication, Insurance Asset Risk, which noted that despite seemingly making progress towards net-zero goals, insurers seem to be taking on a role previously occupied by banks in financing fossil fuel projects. In recent years, some insurance regulators have pushed for more transparency from the industry and warned it of the danger of investments that contribute to climate change. The insurance commissioners of California, Oregon, and Washington did a first-ever stress test of insurance company investments last year to detail the hidden cost of delaying climate action. In addition to exacerbating the climate crisis, such investments could be risky for insurance companies bottom line as the world moves to a clean-energy future, making it harder for them to write policies going forward. The three insurance commissioners warned in their report: Insurance companies invest premiums that they collect from people and businesses, generating returns that enable them to pay future claims, meaning the performance of investment income can have a direct impact on a companys ability to take on additional policies down the line. According to the insurance commissioners findings, insurers face greater exposure to climate risk in their corporate bond portfolios than in their equity investments. Their future losses on corporate bonds could range from $7 billion to $40 billion, per the analysis. Because homeowners insurance is required for most home loans, some economists are concerned that the insurance crisis could reignite a mortgage crisis on a scale of the 2008-2009 recession. Rising premiums and limited availability of insurance can have significant ripple effects across housing markets, reducing demand (and housing values) for homes in high-risk areas, according to a new Brookings Institute study. Any wide-scale decline in property values would present a systemic risk to the U.S. economy similar to what occurred during the 2007-2009 mortgage meltdown and ensuing global financial crisis, the Senate Budget Committee warned in a December 2024 report. It has a sort of this chilling effect where if insurance companies are announcing that theyre no longer writing policies in entire neighborhoods or entire communities or in some cases even entire states, that has implications for whether youre going to be able to sell your home because the mortgage market wont be available, said Jordan Haedtler, climate finance strategist with advocacy group the Climate Cabinet. The crisis has prompted most states to develop an insurer-of-last-resort program, available to those who cant get coverage from private insurance companies. But they are at risk of being overwhelmed. Californias FAIR Plan, which has only $200 million in reserves and $2.5 billion in reinsurance, has exposure of $5.9 billion from homeowners policies in Pacific Palisades alone, where the number of policyholders grew by 85% from last year. As Californias former insurance commissioner Dave Jones told Capital & Main, provisions in the FAIR Plan leave homeowners across the state on the hook for losses if the government plan is exhausted. Moving forward to address this crisis may take some dramatic steps, say experts. Publicly funded climate risk insurance, such as the FAIR Plan, dont adequately address the problem since they would face many of the same challenges as the private market in terms of managing rising costs and increasing climate risk exposure, plus the added complexity of political pressure to keep premiums artificially low, according to the Brookings report. The think tank recommends that state regulators develop initiatives to make more advanced catastrophe modeling tools available to insurers and incentivize them to offer discounts to policy holders for taking steps to make their homes more resilient by installing wind-resistant roofing, fire-resistant siding and hail-resistant shingles. Unfortunately, insurers arent on board yet in California. Last year, Jones worked with state Sen. Josh Becker and the Nature Conservancy on a bill that would have required the models used by insurers to account for risk mitigation efforts such as forest treatment, creating defensible space around homes and home hardening. The insurance industry killed it, Jones said. They killed the bill through lobbying and donations to lawmakers. They basically went in front of the insurance committee of the Senate and the Appropriations Committee of the Assembly and, and said, Were opposed to this, and convinced those two committees to gut the bill. Whats key is addressing the role of climate change, said Sawyer. Weve got to think about how were reducing climate pollution and continuing and accelerating Californias commitment to emissions reduction and investments in resilience, she emphasized. The last thing we need is solutions that try and treat this as a temporary financial crisis without reaching down to those roots and really thinking about the [insurance] sectors role in decarbonization and making us safer across the board. This piece was originally published by Capital & Main, which reports from California on economic, political, and social issues.
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The iconic Louvre in Paris is no stranger to crowds. Since first opening in 1793, the museum has played host to millions of guests and undergone dozens of expansions and renovations to accommodate them. Today, though, overtourism has brought the historic site to a breaking point. In a typical year, the Louvre is prepared to accommodate 4 million visitors. But in 2024, almost 9 million people70% of them originating from outside of Francepassed through its doors. Visiting the Louvre is a physical ordeal, museum director Laurence des Cars wrote in a widely publicized leaked memo. Now the Louvre will now undergo a massive renovation to address overcrowding and expand its viewing capacity to 12 million annual visitors, French President Emmanuel Macron has announced. The ambitious project includes opening a new entrance on the Seine river, and dedicating a stand-alone room to house the Mona Lisa by Leonardo da Vinci, to give the famed Italian Renaissance painting some breathing room. A timeless attraction with an outdated structure The Louvre’s proposed redesign follows a slew of critiques from des Cars and years of wear and tear to the museum’s architectural structure, which has been exacerbated by growing crowds. There isn’t room for visitors to take a break, according to des Cars, who also assessed the museums food and restroom facilities as insufficient in volume. She added in her memo that some areas of the museum are prone to leaks, while others experience wide temperature variations, potentially impacting the preservation of the artwork within. The Louvre’s signage needs to be redesigned as well, des Cars asserted. [Photo: Antoine Boureau/Hans Lucas/AFP/Getty Images] The Louvre currently has only one entrancethe iconic glass pyramid by architect I.M. Pei, opened in 1989. Overcrowding of the throughway in recent years has led to both a greenhouse-like heating effect and unpleasant sound amplification. A similar issue has plagued staffers guarding the Mona Lisa. According to des Cars, around 20,000 people pack into the room housing the famous painting each day, resulting in massive lines and far-from-ideal viewing conditions (if you can even get close enough to catch a glimpse). Im leaving in a state of extreme fatigue and Ive vowed never to visit again, one loyal local visitor told The Guardian. The noise is so unbearable under the glass pyramid; its like a public swimming pool. Even with a timed ticket, theres an hour to wait outside. I cant do it anymore. Museums are supposed to be fun, but its no fun anymore. A design solution to overcrowding At a speech delivered in front of the Mona Lisa on Tuesday, Macron introduced a plan to bring the fun back to the Louvre. In short: improve the flow of foot traffic throughout the space in order to prevent major backups. To start, Macron announced, the renovation will include a new grand entrance at the Colonnade de Perrault on the museums western side near the Seine, finally adding an additional pathway for guests to enter the building, and relieving crowding at the pyramid entrance. The Louvre will hold a competition to choose the firm responsible for the addition, which is slated to open in 2031. Several underground rooms will be added to boost exhibition space. And the museum will relocate its pice de résistancethe Mona Lisato its own dedicated room. That room will require a separate access pass and be independently accessible compared to the rest of the museum, Macron said. In response to the issue of overtourism, the museum will also institute higher prices for foreign travelers. Starting on January 1, 2026, Macron announced, all guests from outside the EU will be required to pay a higher entrance fee. These renovations come as other popular destinations like Spain, Greece, Italy, and Germany have all begun implementing taxes for foreign visitors as a means of dealing with rampant overtourism. It’s only a matter of time before additional landmarks will need to consider designs specifically created to manage the effects of overcrowding.
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Until recently, if you threw away an old mattress in Amsterdam, it would likely end up in an incineratorthe same way that most of the 15 million-plus mattresses thrown out in the U.S. each year end up in landfills. Now, however, around half of Dutch mattresses are recycled, and that number is growing. Some of the material is starting to be used in new mattresses, sofas, and other furniture by manufacturers like IKEA. [Photo: IKEA] In one facility near Amsterdam, a company called RetourMatras uses automated equipment to dismantle old beds, beginning with a machine called a peeler that cuts off the mattress cover so the fabric can be recycled. Then the core is separated into materials like polyurethane foam, latex foam, and metal springs, depending on whats inside a particular product. More than 80% of a typical mattress can be recycled. In another corner of the facility, the company has pioneered a process to turn polyurethane foam into the chemical building blocks for making new foam that can be used in furniture. [Photo: Ikea] In the past, shredded foam could only be “downcycled” into a lower-quality material for products like carpet backing. Now, if you buy an Extorp sofa or Poäng chair from IKEA in Europeor a new mattressit will likely contain foam partially made with chemicals that RetourMatras recycled from old mattresses. The investment arm of Ingka Group, IKEA’s largest retailer, first invested in the recycling startup in 2019 to help it scale up. The aim was to help with IKEAs own circularity goals. We would like to recycle as many mattresses as IKEA puts on the market globally, says Alberic Pater, who manages business development at Ingka Investments. (Last year, the company sold more than 11 million mattresses.) At the time of the first investment, there was almost no recycling capacity in the region, Pater says. Incineration or landfill was still commonplace, because the cost was far cheaper than recycling, he says. Cost is still a challenge, though RetourMatras says that automation is helpingalong with the fact that the company can now produce higher-quality materials for use in new furniture. The recycling company now has three facilities in the Netherlands, along with three facilities in the U.K. and one in France. In total, it has the capacity to recycle 2.5 million mattresses in a year; last year, it handled 1.6 million. So far, only the location outside of Amsterdam has the new tech. But another new investment from IKEA will help the startup grow. This month, the furniture giant announced that it planned to invest more than $1 billion in recycling infrastructure, including an unspecified amount in RetourMatras. (The recycler hasn’t yet announced any plans to expand to the U.S., and so far, there aren’t any other American recycling companies with the same type of foam-to-foam recycling technology.) At the same time, IKEA’s product designers are working on making mattresses more recyclable. For example, many of its mattresses now have covers made from 100% recycled polyester, which can be recycled again. The covers also have zippers, so they’re easier to remove. “It’s extremely easy just to unzip the cover, take out the foam, and let the cover go in a different recycling stream,” says Johan Kroon, a product developer for Inter IKEA. (Because they’re removable and washable, it also makes it more likely that consumers will keep the mattresses longer, which can cut the environmental footprint of the product even more.) The company’s product design team is working on multiple projects related to mattress recyclability, including making it easier to separate the materials inside. Other companies are also innovating in the space. Royal Auping, a Dutch company that has made mattresses since 1890, designed a fully circular mattress in 2020. Called Evolve, it’s made from only two materialsPET, the material used in plastic water bottlesand steel springs. A specially-designed adhesive makes it possible to separate the materials with heat instead of energy-intensive shredding. PET is also easier to recycle than foam. The design has fewer than half of the components of a typical mattress, but is as comfortable, the company says, with better ventilation than a foam mattress. RetourMatras says that mattress brands can tour its facilities to better understand how to design for recyclability. It will take time to see the benefits. “We’re dismantling mattresses from 10 years ago,” says Chico van Hemert, managingdirector at RetourMatras. “If we change something now, we’ll benefit in 10 years.” Meanwhile, IKEA’s product developers are also figuring out how to use the new recycled foam. Right now, it only makes up a small percentage of the total material in the company’s products; one IKEA mattress sold in the Netherlands, for example, uses 10% recycled polyol, the main building block for making foam. That percentage can increase as the supply of recycled material keeps growing and costs come down. “The biggest challenge is to get more mattresses,” says Pater. IKEA collects old mattresses at its stores, but governments need the right policies to collect mattresses at a large scale. Several European countries now have “extended producer responsibility” laws that require mattress retailers to figure out how to get old mattresses back for recycling. The U.S. lags behind, but four states also have similar laws. “We need more markets, more countries, to implement the right legislation,” he says.
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