Insurance News
- Allianz launches 'green' insurance to fund renewable energy project in China
Date: 16-Nov-2007 Sources: (Xinhua Online)
BEIJING, Nov. 15 (Xinhua) -- A German driver could invest a renewable energy plant in northern China's prairie by voluntarily purchasing a carbon dioxide certificate from Allianz car insurance.
Part of the fund collected from such German drivers went to a biomass-fired power plant in Wushen Banner, Inner Mongolia. The plant, costing 241 million yuan (32.1 million U.S. dollars) in investment, will use 199,200 tons of desert bushes annually to generate electricity and supply heat for local industry.
The cost of a certificate depends on the type of vehicle, mileage driven per year, and the current price of mitigation certificates on the world market. A carbon dioxide certificate for a Volkswagon Passat driven 11,000 kilometers a year, for example, is about 37 euros, which allows a client to neutralize a car's carbon dioxide emissions for a year.
This is the latest drive of the Munich-headquartered insurance giant Allianz to help mitigate bad effects resulting from climate change. A client who decides to buy the new insurance product, ECOmotion, can purchase a CO2 reduction certificate from Allianz along with car insurance, and thus invest directly in projects to protect the climate.
Armin Sandhoevel, chief executive officer of Allianz Climate Solutions GmbH, said here Thursday in an interview with Xinhua, 'As climate change becomes a serious emerging risk, the financial industry should contribute to systematically mitigate such a risk and turn it into opportunity.'
'The proposed project in China will reduce the CO2 emission by using desert bushes to generate the power,' Sandhoevel said.
Allianz contracts a leading European emissions trading and CO2 asset management firm, 3C Consulting GmbH, to review and select high-quality climate protection projects that meet the requirements of Gold Standard, which is designed by the World Wide Fund for Nature (WWF) and goes beyond Kyoto Protocol requirements.
Gold Standard projects are either based exclusively on renewable energies, or ensure that employed energy can be used more effectively.
With a shrewd eye on business opportunities on climate change-related issues, Allianz set up its climate change team, currently grouping 10 people, in May 2007. The team, largely being mandated as a consulting entity, focuses its research and advice on new products ranging from car insurance to renewable energy project investment and emissions trading, said Sandhoevel who led the carbon risk center at Dresdner Bank, one of the world's earliest players in the thriving carbon trading market.
Statistics showed that at present 40 percent of insured damages are due to storms and floods. Allianz lost about one billion euros in each of the past couple of years.
'The insurance sector is changing our risk assessment from one based on historical data to the current thinking that includes future weather related risks,' Sandhoevel said.
Sandhoevel sees rosy business opportunities in China where the price of carbon emission rights (CERs) is much lower than those in Europe and North America.
Carbon emissions trading is a market-based scheme, under the Kyoto Protocol, for environmental improvement that allows parties to buy and sell permits for emissions or credits for reductions in emissions of carbon dioxide, a Green House Gas primarily contributing to global warming.
The Kyoto Protocol Clean Development Mechanism (CDM) presents new business opportunities in many Chinese industries such as energy and mining, industrial products and waste management, experts said.
As the world's largest CDM market, China has huge potential, estimated at about eight billion U.S. dollars per year in carbon trading.
'We're providing consulting services for investment in projects that generate CO2 certificates for investors,' Sandhoevel said.
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