Cat Bonds and Budget Battles

Primary season heats up.

cat bond

Some “cat bonds” are the relationships people form with their feline friends. Other “cat bonds” are catastrophe bonds, securities used by insurance companies to offload climate-disaster risk to the capital markets, a role traditionally held by re-insurers like Swiss Re. Catastrophe modelers like Karen Clark & Co. and Verisk Analytics are investing in cutting-edge climate models. Specialist investors, like Elementum Advisors, Fermat Capital Management, Twelve Capital, and Tenax Capital, are trying to build better climate models than their competitors to win big. As Gautam Naik reports, the industry is discovering that as fossil-fueled global warming accelerates, climate disasters are growing faster than their models are predicting, particularly wildfires and thunderstorms.

Speaking of which, thousands of Canadians are having to evacuate as wildfires spread with unprecedented speed through tar-sands country, choking the Midwest with smoke. Fossil-fueled storms ripped through the Gulf Coast with 82-mph winds, killing at least four, as record heat grips south Florida. Torrential rains are flooding Hawaii. Fourteen people were killed when a storm toppled a giant billboard in Mumbai. More storms are on the way.

Ruddy Turnstone (Arenaria interpres). Credit: Ash Ponders

PRIMARY COLORS: It’s the hottest primary season in 2,000 years. In the Maryland primary to succeed Sen. Ben Cardin, PG County Executive Angela Alsobrooks trounced millionaire Rep. David Trone, whose bid to buy the seat was unsuccessful. She will face former Gov. Larry Hogan in a costly general race. Trone’s seat will go to former Rep. John Delaney’s wife April McClain Delaney, who won that primary. And the AIPAC-backed State Sen. Sarah Elfreth beat former U.S. Capitol Police Officer Harry Dunn in the primary for the seat being vacated by Rep. John Sarbanes.

AIPAC money is flooding into several other key Democratic primaries, regularly backing the opponents of Green New Dealers and climate hawks. Green New Deal champion Rep. Jamaal Bowman (D-N.Y.) is under an AIPAC barrage in favor of his opponent George Latimer. AIPAC funds are being funneled secretly to Maxine Dexter, the opponent of progressive climate hawk Susheela Jayapal in the race to succeed Rep. Earl Blumenauer (D-Ore.).

In another Oregon primary race, it’s mostly local corruption—the cabal that pushed the failed Jordan Cove pipeline and LNG export terminal, including former Rep. Pete DeFazio (D-Ore.), now a corporate lobbyist, and former state Rep. Brian Clem (D-Ore.), a businessman—are financing a nasty campaign against climate hawk Doyle Canning.

Gee Bill! How come your mom lets you have your own yellow pigment?

At 10 am, Senate Budget chair Sheldon Whitehouse (D-R.I.) holds his latest climate risk hearing on national security, with the evocative title “Budgeting for the Storm.” The witnesses are former Navy vice admiral and climate official Dennis McGinn, former Navy oceanographer and rear admiral Tim Gallaudet, Center for Climate and Security’s Erin Sikorsky, and Hampton Roads official Rick Dwyer. The Republican witness is the American Enterprise Institute’s Mackenzie Eaglen.

As the United States finances multi-billion-dollar wars in Ukraine and Israel, both with profound implications for global energy politics and international diplomacy, and directs its trillion-dollar war machine towards confrontation with China while ratcheting up clean-energy tariffs, this hearing could not be more timely.

Wednesday also features numerous fiscal-year 2025 budget hearings, in which members will discuss agency priorities with administration officials:

Hearings on the Hill:

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