Last year’s Maui fire driven by a changing climate, was a wake up call for many, especially for the state’s Property & Casualty (P&C) insurance providers.

While Hawaii’s insurance market has been relatively stable compared to states like Florida and California, the increasing frequency and severity of climate-related events are already placing upward pressure on insurance rates throughout the industry, leading to higher costs and changes in coverage and availability.

Hawaii’s residents not otherwise sleeping under a coconut tree generally find themselves within one of three residential P&C insurance market categories as; Home Owners, Condominium Owners, or Renters, and as a result, most residents have some form of Property & Casualty insurance coverage, and in many local markets have experienced annual cost increases exceeding inflation over the past several years.

For Hawaii and beyond, long-term premium increases are projected to increase throughout the insurance sector by 5.3% per year through 2040, largely due to increasing climate change impacts.

Locally, P&C insurance companies are a band on the run. Hawaii’s Insurers have so far paid out more than $2.34 billion and more than 10,000 claims as the result from the climate -driven Maui fires, as of June 30, according to the Hawaii Insurance Division.  About $1 billion more in claims is expected, the agency said in a late July update. The August 2023 wildfires that spread across much of Maui killed 102 people and displaced more than 12,000, further validated P&C insurers worst fears of greater financial exposure in an increasingly climate-unstable world.

Even before the Maui fire Hawaii property insurance premiums had been rising year-over-year, a trend likely to continue due to increasing climate related change property claims. While it’s too early to determine the exact impact of the recent Maui wildfires on rates, they are expected to contribute to further rate increases.

Insurance companies are likely to reassess the risks associated with offering coverage in Hawaii, particularly in areas prone to wildfires and other climate-related disasters. This reevaluation is already leading to higher premiums and more selective or limited coverage and coverage value ceilings.  Some insurers are already limiting coverage and/or increasing scrutiny in high-risk areas throughout Hawaii.

No major insurance carriers have announced plans to pull out of the state due to the Maui fires, but the industry as whole with customers in the state are or could reassess their risk exposure in Hawaii at anytime, especially as the industry is transformed by non-historic risk events that previously did not exist.

Cause & Effects

The 2023 Maui wildfires has had a significant impact on Hawaii’s property and casualty (P&C) insurance landscape, affecting rates and underwriting policies.  The Maui wildfires resulted in substantial insurance payouts, with Insurers having already paid $2.34 billion on more than 10,000 claims as of June 30, 2023.  An additional $1 billion in claim payouts is expected bringing the total insured Maui fire loss to an estimated $3.4 billion, and making it Hawaii’s second costliest natural disaster on record.

Significant losses have prompted insurers to reevaluate insured risks with Hawaii based customers, and like California, the threat of some P&C insurers leaving the state remains high a some future time.  In the meantime, insurers are likely to reassess their underwriting policies in Hawaii:

• Some companies may limit coverage or increase scrutiny in high-risk areas.
• At least one company has issued a moratorium on new fire policies in parts of Maui where wildfires are still actively burning.
• Insurers are further reevaluating the risks associated with offering coverage to homeowners in Hawaii.

Despite the aforementioned concerns, Hawaii’s insurance market appears relatively stable:

• No major insurers have announced plans to pull out of the state due to the fires.
• Hawaii’s market has been stable for many years, with availability across various insurance types.
• The state is in a better position compared to states like Florida and California, where more insurance companies are withdrawing.

However, the Hawaii Property Insurance Association (HPIA), which serves as an industry safety net, may struggle to handle an increasing number of homeowners unable to secure private insurance.  HPIA typically charges higher premiums for less coverage, with a maximum coverage limit of $450,000.  State government and insurance regulators are also taking steps to address the situation:

• The state issued a declaration allowing out-of-state adjusters to help process claims.
• The insurance commissioner encouraged insurers to ensure continued coverage for those impacted by the wildfires.
• The Hawaii Insurance Division is monitoring the situation and providing some support to affected policyholders.

While the full impact of the Maui wildfires on Hawaii’s P&C insurance market is still unfolding, it’s likely to result in some rate increases and changes in underwriting policies beyond Maui. However, regulators are presently actively working to maintain insurance availability in support affected Maui residents, but may this effort should be expanded with a statewide view into the near future.

Self-Insure?

Some people are rolling-the-dice and self-insuring or skipping traditional P&C insurance altogether.

A recent study by the Insurance Information Institute, a nonprofit that seeks to educate consumers, found that the number of people foregoing insurance coverage is rising sharply.  “Twelve percent of homeowners are now voluntarily not purchasing home insurance versus 5% before the pandemic, so the rate has more than doubled,” Mark Friedlander, the institute’s director of corporate communications. That comes despite the finding in a survey by the financial adviser firm Bankrate that most Americans don’t have $1,000 set aside for a family emergency.

“How realistic is it for an American family to say, ‘we’re just going to forego insurance and we’ll pay for a loss out of pocket’? Not very.” Friedlander said. “But that’s the kind of trend we’re seeing.”

Editorial – updated

“Misinformation” is today’s polite media term for “lies” now lubricating the Trump-for-President narrative. It is also the fuel for a machine of talking heads both in and out of the cable and internet media spaces serving as the campaign’s echo chamber.   The most recent example of Trump campaign “misinformation” claims is about immigrants eating their neighbors pets in Springfield, Ohio.

“In Springfield they’re eating dogs,” the former president said, referring to an Ohio city dealing with an influx of Haitian immigrants. “They’re eating the cats. They’re eating … the pets of the people that live there. And this is what’s happening in our country, and it’s a shame.”

Although, thoroughly debunked, and based on unfounded rumors and racist stereotypes, new polls show lots of Trump backers “still” believe Trump’s pet-eating cause and effect claims about Haitians, as well as plenty of other unhinged claims.

The origin of the dogs and cats being eaten by immigrants originated from unverified social media posts and comments at local meetings, and amplified by right-wing figures in the media after the Trump campaign picked-up on the story and ran with it.

Despite the lack of evidence, the rumor has been roundly promoted by prominent Republican figures, specifically Donald Trump and his running mate JD Vance during campaign events, and the one and only recent Harris-Trump national debate.

The spread of these rumors has led to increased tensions in Springfield, including bomb threats against schools and government buildings.  Both Springfield’s mayor and Ohio’s Republican governor have spoken out against these false claims and emphasized the positive contributions of the immigrant community.

It’s important to note that these types of unfounded rumors can have serious consequences, fueling xenophobia and potentially inciting violence against immigrant communities. Responsible discussion of immigration should focus on factual information and policy debates rather than spreading unsubstantiated claims and lies.

Today’s media hardly resembles the investigative and truthful news reporting period of the Watergate years. Instead, we to live in a media echo chamber of false narratives replacing news and investigative reporting, once the primary and verifiable domain of national broadcasting outlets.

Investigating and informative news outlets in various forms are now competing with talk show formats masquerading as TV & Internet news outlets. Today’s media lacks the necessary investigative and truthful reporting required to support a free and open democratic society, and media sponsors seem to like it that way.

Meanwhile, corporations have also discovered profitability in selling products and ideas as news, and news as infotainment. The arrival of AI tech applications will only accelerate this disturbing trend, and truth telling is paying the price of an increasingly misinformed public.

Another problem are the various forms of false news stories currently circulating on social media. One recent example alleged that Kamala Harris was involved in a 2011 hit-and-run accident in San Francisco. The fake news  manufactured and was the work of a covert Russian disinformation operation, according to Microsoft.  Researchers found that the group created a video, paid an actor to appear as the alleged victim, and spread the video report  through a fake website of a nonexistent San Francisco news outlet named KBSF-TV.  The Russian disinformation group responsible, Microsoft dubs Storm-1516, is described as a Kremlin-aligned troll farm, and exemplifies the growing public challenges of separating fake from real, informative, and honest news coverage.

World breaks hottest day record

Across the United States millions of residents have experienced, and are experiencing, soaring temperatures and extreme heat.  Increasingly all too familiar, scientists around the world have once again linked an increasingly hotter climate to rising global fossil fuel emissions.

The world registered its second hottest day in modern times. That was last Monday, and inching past the previous high record set the previous 24 hours, according to the a European Union’s climate monitoring agency.

Breaking record heat around the world also is responsible for wildfires engulfing parts of the United States, Mediterranean, Russia and Canada, and the accompanying hazardous public health air pollution impacts.

The average global surface air temperature rose to 62.87 degrees Fahrenheit on Monday. That was 0.11 F higher than Sunday’s record breaking temperature, according to global temperature data tracked back to 1940.  The temperature data includes record breaking temperature highs in the Southern Hemisphere as well, which is currently in its winter season.

La Nina, no longer cooling higher temperatures

What makes this year’s record breaking temperatures so unusual is the world has had in recent-history higher temperatures during which La Niña events were characterized by the cooling of ocean surface temperatures in the central and eastern equatorial Pacific.

La Niña events typically lead temporarily to cooler temperatures, the 2010-2012 La Niña was notable for occurring during a period of overall rising global temperatures, which affected its impact and intensity, and led to significant weather anomalies globally, including extreme rainfall and flooding in Australia, drought in East Africa, and unusual tropical cyclone activity.

Karsten Haustein, a climate scientist at Leipzig University in Germany, said it was “remarkable” that as global temperature rise and records setting heating trends which now breach the traditional cooler phase of the Southern Oscillation climate cycle, the scientific findings are revealing how global heating is now impacting both the hotter El-Nina and cooler La Nino cycles, and manifesting those impacts in the form greater event extremes and consequences.

It doesn’t take a room full scientists to read the obvious evidence; the world’s rising temperatures are the consequences of humans and our accumulative burning of fossil fuels from tailpipe-to-smokestack. And, Hawaii and its remote location are no longer exempt or protected by location from growing global climate impacts and rising temperatures.

The continued global burning of fossil-fueled energy sources has not only disrupted the Earth’s natural climate cycles, but poured gasoline on the fire of summer heating, adding to the frequency and ferocity of destructive fire events and dangerous levels of air pollution.

El Nino and La Nina cycles represent both ends of the oscillating climate system linked to the Pacific Ocean, and each increasingly fueled by rising global temperatures and supercharged by warmer-than-usual ocean water in the Eastern Pacific.

US government urged to declare wildfires, smokes, and extreme heat as major disasters

The risks associated with rising global temperatures and intense weather events are increasingly understood by the global scientific community.  The National Weather Service says heat is the leading disaster-related killer in the US, killing more people than hurricanes, floods, tornadoes, and fire events combined.

Higher temperatures tend to fuel weather intensity, including wild wind storms, which together fuel more wildfires with greater intensity and impact on property and people. These are lessons now well understood by the residents of Lahaina, and by extension, a greater awareness of changing climate and weather impacts on all residents of Hawaii.

The three most important elements affecting wildland fire behavior are wind, fuel, and moisture. Abundant elements comprising life in Hawaii.   Of the three, wind is the most variable and the least predictable. Winds, particularly near the earth’s surface, are strongly affected by the shape of the topography and by local heating and cooling which are highly variable across Hawaii’s island chain, and accounts for much of the state’s island-by-island variability.

Wind affects wildfire in many ways

As our understanding of wind behavior and fire grows, wind carries away moisture-laden air and hastens the drying of forest fuels. Light winds aid certain elements in igniting a fire. The direction a fire spreads is determined mostly by the wind direction.  Once a fire is started, wind also aids combustion by increasing the oxygen supply. It further aids fire by spreading burning embers to new fuels, and by bending the flames closer to the unburned fuels ahead of the fire.

Risks associated with intense heat include more wildfires, and poor air quality associated with large scale fires.  The high demand for emergency response resources, coupled to a strain on the state’s infrastructure that delivers much needed power to keep vital services operating in an emergency, as with hospitals, schools, and key infrastructure services, for the most part is a work in progress.

Lawmakers and emergency services are increasingly aware of the growing climate and fire threats Hawaii faces.  However, the state’s emergency response policy and resources are poorly equipped to address present and future challenges as the consequential and deadly lessons of the Lahaina fire already demonstrated.

NASA - USFS North American Satellite Fire Map - July 29, 2024

Solar energy currently accounts for a minority, but growing share of the Hawaii’s energy mix.  Despite having the third-lowest total energy consumption in the United States, Hawaii uses almost nine times more energy than it produces.

In 2023, solar power provided about 19% of Hawaii’s total electricity, the majority of which was from small-scale rooftop and customer-sited solar power generation. These same utility customer generation sites provide a return-on-investment benefit (and energy security when batteries are included) to Hawaii’s solar energy homeowners and businesses. Also, by producing their own power, HE’s solar energy customers off-set a portion of the utility’s dirty energy costs, and that utility cost reduction benefits all ratepayers.

Utility scale solar on the other hand has been historically hobbled by Hawaiian Electric’s obstruction and otherwise slow-walking of solar development. The company’s clear investment bias in the state’s combustion power plants, both directly and indirectly, have played an obvious role.

Today’s solar photovoltaic (PV) energy sector is the fastest growing electricity generation technology worldwide.

• In terms of new electricity generation capacity added globally in 2022, solar PV accounted for a staggering 56% of the total, far outpacing all other sources.

Over the past three years, solar PV and wind together have contributed over 75% of new electricity capacity expansions worldwide.  At the same time, legacy fossil fuels (coal, oil, and gas) overall continue to dominate the world’s energy markets.  These dirty fuels presently account for nearly 80% of the global energy supply.  This same market dominance has remained relatively stable for over a century.  Although fossil fuel market shares are shrinking and expected to decline to around 70% by 2030, this will only happen in light of continuing and dedicated efforts to decarbonize the world’s economies. Clean energy replacements aimed at reducing and eliminating carbon emissions now fueling global heating are already in place, it’s mainly a matter will, not technology, cost, or opportunity.

Of particular opportunity and benefit to Hawaii is it’s highly solar-productive location, combined with the need for a transition to clean energy self-sufficiency. As the state follows energy market trends elsewhere, solar is transforming the electricity supply grid, advancing energy distribution opportunities and increasingly energy resiliency in an increasing less resilient world of disrupted energy supply chains, super storms, and ever increasing fossil-fueled energy costs.

According to the International Energy Agency’s (IEA) World Energy Outlook 2023, solar photovoltaic (PV) is projected to experience astonishing growth rates and become a major contributor to the global energy mix, now and in the coming decades.  Solar PV deployment is projected to more than double from current levels by 2030.

The UN recently reported that climate pledges made by governments plan a dedicated boost in the solar economy through increased PV manufacturing capacity, and appear (unlike other international climate pledges entering various stages of  development and deployment) designed to meet their part in global clean energy transformation milestones targeting an end-date of 2030.

In the energy mix to a Net Zero Emissions deadline of 2050, most countries are planning and fully supporting the enabling role of solar PV, increasingly the dominant clean energy source in the global energy mix which includes, nuclear power, hydrogen, carbon sequestration, and many other dubious endeavors in the name of fighting climate change.

• By 2030, in the UN’s “Stated Policies Scenario” report, solar PV alone is expected to account for more than half of all new power generation capacity and energy additions, globally.   The global energy share of fossil fuels is also projected to decline from it present 80% position to 73% by 2030; less than 6 years from now. Considering the science and magnitude of global heating impacts, the present fossil fuel reduction commitments are analogous to “lipstick on a pig” as the world’s clean energy transition goal for the near term.

Solar PV and the electrification of transportation are clear frontrunners in the world’s clean energy transition off fossil fuels.  So while solar PV’s current contribution to the total global energy mix remains modest, it is projected to experience phenomenal growth in the coming years and decades, rapidly increasing its share as part of the clean energy transition away from fossil fuels.

In Hawaii, nobody appears to be in a hurry, until the next hurricane, next supply chain disruption, or utility rate increase.

As Solar Power Surges, U.S. Wind may be in trouble

When President Biden signed the 2022 Inflation Reduction Act, it was expected to set off a boom in renewable energy, with hefty tax breaks that would make solar and wind power cheaper than fossil fuels.

So far, however, that dream has only come partly true. Solar panel installations are indeed soaring to record highs in the United States, as are batteries that can store energy for later. But wind power has struggled, both on land and in the ocean.

The country is now adding less wind capacity each year than before the IRA law was passed.

Some factors behind the wind industry’s recent slowdown may be temporary, such as snarled supply chains. But wind power is also more vulnerable than solar power to many of the biggest logistical hurdles that hinder renewable energy projects today: a lack of transmission lines, a lengthy permitting process and a growing backlash against new projects in many communities.

If wind power continues to stagnate, that could make the fight against global warming much harder, experts say.

Historically, quickly shifting the country away from fossil fuels envisioned a large expansion of both solar and wind, because the two sources generate electricity at different hours and can complement each other – batteries have not changed this reality, but instead offer a viable wind replacement role, fulfilling the potential of 24×7 on demand solar energy stored in batteries and hydropower systems. Both are competitive and technologically superior to so-called “firm energy”combustion energy power plants, when measured in terms of cost and performance.

Previously utility assumptions have called for wind assets to be balance-out with daytime solar additions and off-peak fossil fueled generation. These assumptions have been upended with the utility-scale introduction of battery storage options fully integrated into legacy grid generation energy assets and / or clean energy additions to the grid..

A clean energy transition boom focused on solar power generation alone is now not only possible, but increasingly practical.  As battery costs continue to drop, the technology performance per KWh continues to advance and improve, the added-value of battery energy management systems and their adoption is a validating business case for the technology, and an essential component of today’s and tomorrow’s renewable energy projects.

The growing energy management operating efficiencies also associated with utility scale battery installations are yielding built-in cost performance and reliability as recently demonstrated in Hawaii, and at greater scale elsewhere.  These same battery benefits apply to single family residential and commercial rooftop solar-battery installations. In these smaller scale applications of energy self-sufficiency, designed to fulfill reliable 24×7 power supplies both on or off the grid.

Giant Batteries Are Transforming the Way the U.S. Uses Electricity

They’re delivering solar power after dark in California and helping to stabilize grids in other states. And the technology is expanding rapidly.

California draws more electricity from the sun than any other state. It also has a timing problem: Solar power is plentiful during the day but disappears by evening, just as people get home from work and electricity demand spikes. To fill the gap, power companies typically burn more fossil fuels like natural gas.

That’s now changing. Since 2020, California has installed more giant batteries than anywhere in the world apart from China. They can soak up excess solar power during the day and store it for use when it gets dark.

Utility scale batteries play a pivotal role in California’s electric grid stability, now replacing and off-setting fossil fuels in the evening and during peak power periods.

For example, between 7 p.m. and 10 p.m. on April 30, batteries supplied more than one-fifth of California’s electricity and pumped out 7,046 megawatts of electricity, akin to the output from seven large nuclear reactors.

Across the country, power companies are increasingly using giant batteries the size of shipping containers to address renewable energy gaps when the wind and sun aren’t always available.

To meet the utility’s load balancing responsibilities and power dilemma between supply and demand, and for power to be reliably and consistent, Hawaii’s ratepayers have been told that is the role of Hawaii’s so-called “firm power” combustion power plants. Yet, Hawaiian Electric’s increasing power failures on Oahu and Hawaii Island have demonstrated that so-called firm power is less  reliable, no matter what fuel they burn, compared to battery storage energy assets properly managed.

BeyondKona Comment

There are better ways to serve the clean energy goals of Hawaii’s residents and visitors, and power its economy.  So far, the state’s primary and essential utility has set lofty renewable energy goals over the past decade. These goals have been marked by mismanagement and lost opportunities.

Serving the utility investor priorities is not the responsibility of Hawaii’s ratepayers nor the state’s elected officials. The public interest comes first!

It is increasingly clear there is a misalignment between Hawaii’s ratepayers and the utility, and one which preceded the 2023 Maui fire.

Ever rising ratepayer costs and greater grid service instabilities is not the path forward for Hawaii’s largest utility nor for multi-island customer base.  The utility has historically demonstrated it has not been a full partner in Hawaii’s journey to a self-sufficient and clean energy economy.  Before or at the statewide energy deadline calling for a 100% renewable energy powered grid within Hawaiian Electrics’ service territory, the state’s renewable energy clock will continue to tick down to zero hour, 2045..

For the Biden Administration, Earth Day is …Everyday

“This is a case where conscience and convenience cross paths, where dealing with this existential threat to the planet and increasing our economic growth and prosperity are one in the same. When I think of addressing climate change… I think of jobs.” 

President Joe Biden

Monday was Earth Day 2024, and on that day U.S. Senator Brian Schatz (D-Hawai‘i) announced that the Hawai‘i Green Infrastructure Authority will be receiving $62.45 million in Federal grant funding from the EPA which will fund solar power systems for many of Hawaii’s low-income households across the state.

“The new Solar for All grant funding will help low-income households across Hawai‘i take advantage of solar power and save money on energy bills – all the while cutting pollution and creating good-paying jobs statewide,” said Schatz.  The program is designed to provide financial assistance towards the funding of residential rooftop solar projects, as well as energy storage, and further enable the deployment of community-owned solar systems.  The solar grants being awarded are directed to projects expected to eliminate greenhouse gas emissions equivalent to 30 million metric tons of carbon dioxide and is projected to save U.S. households $350 million annually in reduced energy costs.

On the campaign trail, President Biden reminded voters that, “… Despite the overwhelming devastation in red and blue states, there are still those who deny the climate is in crisis.” “My MAGA Republican friends don’t seem to think it’s a crisis. They want to repeal the Inflation Reduction Act, which provides the funding for the vast majority of climate-related energy projects, and roll back protections for clean air and clean water.”

In addition, the Biden administration also announced the launch of a new website for the American Climate Corps (ACC), a national program aimed at training young people for clean energy and climate resilience jobs. The Nature Conservancy (Hawai‘i) and Kupu are among local organizations accepting ACC applications.

Tenth consecutive monthly heat record alarms and confounds climate scientists

This is the 10th consecutive monthly record in a warming phase that has shattered all previous records. Over the past 12 months, average global temperatures have been 1.58C above pre-industrial levels. And now exceeds the 1.5C benchmark set as a target in the Paris Climate Agreement but that landmark deal will not be considered breached unless this trend continues on a decadal scale.

Climate experts warn that if the heating anomaly does not stabilize by August, ‘…the world will be in uncharted territory in facing ever-rising temperatures’

Another month, another global heat record that has left climate scientists scratching their heads and hoping this is an El Niño-related hangover rather than a symptom of worse-than-expected planetary health.

Diana Ürge-Vorsatz, one of the vice-chairs of the UN’s Intergovernmental Panel on Climate Change (IPCC), noted the planet has been warming at a pace of 0.3C per decade over the past 15 years, almost double the 0.18C per decade trend since the 1970s. “Is this within the range of climate variability or a signal of accelerated warming? My concern is it might be too late if we just wait to see.” 

Michael E Mann, the scientist whose 1999 “hockey-stick graph” showed the sharp rise in global temperatures since the industrial age, said the current trends were to be expected given the continuing rise in emissions. But he said that should not be a source of comfort. “The world is warming AS FAST as we predicted – and that’s bad enough,”

Gavin Schmidt, the director of NASA’s Goddard Institute for Space Studies, noted that temperature records are being broken each month by up to 0.2C. “It’s humbling, and a bit worrying, to admit that no year has confounded climate scientists’ predictive capabilities more than 2023 has.”

Based on preliminary analyses, Schmidt added:  “If the anomaly does not stabilize by August – a reasonable expectation based on previous El Niño events – then the world will be in uncharted territory. It could imply that a warming planet is already fundamentally altering how the climate system operates, much sooner than scientists had anticipated.”

The core of the problem – fossil fuel emissions – is well-known and largely uncontested in the scientific community. A survey of nearly 90,000 climate-related studies shows a 99.9% consensus that humans are altering the climate by burning gas, oil, coal, and trees (as in biofuels).

In 2023, global levels of the greenhouse gas rose to 419 parts per million, around 50 percent more than before the Industrial Revolution. That means there are roughly 50 percent more carbon dioxide molecules in the air than there were in 1750.  As carbon dioxide builds up in the atmosphere, it traps heat and warms the planet – period!

“Stopping further warming requires rapid reductions in greenhouse gas emissions,” said Samantha Burgess, the deputy director of the Copernicus Climate Change Service.

Living in Denial

Opposition to climate science comes from a variety of vested sources, but not too surprising is the fossil fuel industry – in particular the 57 companies linked to 80% of greenhouse emissions – and stands to lose trillions of dollars in the current global transition to a clean energy economy.

Just last month, Saudi Aramco chief executive Amin Nasser was applauded at an oil industry conference in Houston for declaring: “We should abandon the fantasy of phasing out oil and gas.”