The climate crisis is expected to destroy capitalism – Watt gets along with it?

Eric Worrall's paper

“…It is urgent to take action to save the market and the conditions in which civilization itself can function…”

High-rise insurance companies warn

Senior Allianz figures say there is a urgent need to take action to save the market and the conditions in which civilization itself can function.

Damian Carrington Environment Editorhu April 3, 2025 20.41 AEDT

A senior insurance company warns that the climate crisis is expected to destroy capitalism, and the huge impact of extreme weather has left the financial sector unavailable.

Günther Thallinger, a board member of one of the world's largest insurance companies, said the world is approaching temperature levels quickly and insurers will no longer be able to provide coverage for many climate risks. He said many other financial services from mortgage to investment have become unfeasible if no insurance has been withdrawn in some places.

Global carbon emissions are still rising, and current policies will lead to a higher global temperature range between 2.2C and 3.4C than pre-industrial levels. Thallinger said the losses of 3C will be so great that the government will not be able to provide financial assistance and will not be able to adapt to many climate impacts.

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Read more: https://www.theguardian.com/environment/2025/apr/03/climate-crisis-crisis-crisis-on-track-track-track-destroy-capitalism-warns-allianz-ismurer

Original post by Günther Thallinger, a member of the Allianz Insurance Committee, on Linked In;

Climate, risk, insurance: the future of capitalism

GüntherThallinger
Allianz SE
March 25, 2025

Emissions directly increase the amount of energy trapped in the Earth's atmosphere. This is not a vague or future issue, but a physical reality. The more emissions, the more energy you retain. The more energy, the greater the behavior of the atmosphere. The storm intensified. The heat wave lasts longer. The rain is even harder. The drought is deeper. This is the first principle.

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The insurance industry has managed these risks historically. But we are quickly approaching temperature levels -1.5°C, 2°C, 3°C – and insurers will no longer be able to provide coverage for many of these risks. Mathematical breakdown: The premium required exceeds what people or companies can pay. This is already happening. The entire area becomes uninsurable. (See: National Farm and Allstate Leave California’s Home Insurance Market due to Wildfire Risk, 2023).

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Once we reach 3°C warming, the situation locks in. Due to carbon cycle inertia and the lack of scalable industrial carbon removal technology, this level of atmospheric energy will last for more than 100 years. There is no known pathway to return to 2°C conditions. (See: IPCC AR6, 2023; NASA Earth Observatory: “Long-term Warming Commitment”)

At that time, the risk cannot be transferred (without insurance), the risk cannot be absorbed (without public capacity), and the risk cannot be adapted (without physical limitations). This means no more mortgages, no new real estate development, no long-term investment, no financial stability. The financial sector we know is stopped. With that, capitalism as we know it is no longer feasible.

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Read more: https://www.linkedin.com/pulse/climate-risk-insurance-future-capitalism-günther-thallingher-thallinger-smw5f/

Günther did not give a detailed look at how capitalism would solve the so-called climate crisis in his main article, but one of the comments and answers related to the article is being revealed.

Vincent Huck•3rd+

Editors of insurance asset risks and company disclosures

Thanks Guenther, can the only two levers you can really mention be achieved without growth? (This is not capitalism)

Reply to Vincent Huck's comment

GüntherThallinger Writer SE

Vincent Huck I believe we need to rethink the concept of growth. The starting point should be to integrate financial information and sustainability information (period reports, quality assurance). This may help us quickly transition from excavated objects to recycled and waste-free economies. This kind of economic growth may actually be very necessary.

Read more: Same link as above

The garbage-free economy proposed by Günther Thallinger is a fantasy.

Yesterday I had to replace all four tires on the 4WD because they broke in just a few years – road maintenance in my corner of Australia was somewhat overlooked. Due to decades of government neglect and our tropical climate, roads also wear out quickly in Queensland, and due to road conditions and the high risk of surprising animals encounter, they have drivers who drive a solid 4WD vehicle safely.

How do you apply the concept of “zero waste” to consumables like tires and roads? There is no chance to restore original raw materials in meaningful recycling. Even if everyone turns to rail, the rail lines will wear out – we need more rail lines.

The thing that replaces most of the accounts of the “mining” economy seems to be despised.

As for California's fire risk, that risk is in Günther's paper on insurance becoming unfeasible, a problem arising from the capacity management of dry fuel loads rather than climate change. Clearing on fire can eliminate fire risk if necessary. There is a fire risk only if something is to burn.

Günther Thallinger is currently the head of sustainable investment at Allianz – which can be quite an undertaking given how most parts of the world exit green investment.

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