sectoral economic costs and benefits of ghg mitigation - IPCC

Households and Services
operating costs down. Videoconferences save on air travel, because they generally replace longdistance
trips. E-commerce saves in terms of travelling to the customer or customers travelling to
the financial institution, i.e. distances travelled by car.
Figures for emissions of other greenhouse gases are provided only occasionally. The focus is
usually on the amount of refrigerants (CFCs and HCFCs) emitted because of leakage – a few to
several hundred kg per company per year.
In addition to seeking to reduce emissions of greenhouse gases, insurance companies are also
aware of and are working on the possibility of CO 2 absorption through (re)afforestation. For
example, Gerling Insurance, Cologne, Germany, set a target of compensating up to 10% of the
CO 2 emissions from its head office (10,000 t.p.a) through afforestation (EMAS Environmental
Statement, 1999). In addition to insurance coverage, RheinLand Insurance, Neuss, Germany,
offers its customers CO 2 compensation for the emissions from the object insured (e.g. a car).
Figure 4
Sources of CO 2-Emissions from Business
Travel Railway
2%
Aircraft
42%
Motor car
56%
2 Asset Management
2.1 Securities
“As much as one third of investments in global stock markets (with a total capitalisation of more
than US$ 15 trillion) are presently managed by the insurance industry and by pension fund
managers.” (Knoepfel et al. 1999, 4.2)
As a major shareholder and financier, the insurance industry is indirectly affected by the changes
that result from greenhouse gas mitigation in the regions and branches of industry concerned.
The results of cost-benefit analyses of greenhouse gas mitigation in certain sectors and regions
might have a significant impact on investment by insurance companies. One of the main tasks of
stock market analysts in the future will be to assess whether or not an issuer of securities is
affected by greenhouse gas mitigation and whether it has a strategy, if necessary, to deal with
changes in the greenhouse gas scenario.
The UNEP Insurance Industry Initiative has developed an instrument that analyses the impact of
CO 2 reduction measures on a company. The “CO 2 indicator” sets out a method that calculates a
company’s GHG emissions in CO 2 equivalents and relates the emissions to the company’s
turnover, added value, or number of employees (Tennant, 1998). For example, a low turnover per
ton of CO 2 equivalent indicates that the company’s profitability is more likely to be threatened by
GHG mitigation than if turnover per ton of CO 2 equivalent is high.
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