SACRAMENTO — Governor Gavin Newsom has initiated a new phase of California’s coordinated effort to tackle the growing economic and insurance-related consequences of climate change. The state faces mounting pressures from increased natural disaster risks, rising costs for property owners and insurers, and instability in the energy utility sector—issues affecting communities across the U.S. and globally. n nThrough a newly signed executive order, the Governor has directed multiple state agencies to collaborate on developing long-term strategies to manage the financial burden of natural disasters, enhance insurance affordability and accessibility, stabilize utility operations, protect consumers from excessive rate hikes, and ensure fair compensation for wildfire survivors. n nThis action follows the passage of SB 254 (Becker), which established an updated version of the state’s Wildfire Fund. A key provision of the bill requires the fund’s administrator to deliver a report by April 2026 exploring innovative approaches to catastrophe response. The executive order accelerates this timeline, underscoring the urgency of preparing for escalating climate threats. n nThe California Earthquake Authority (CEA), serving as the Wildfire Fund Administrator, will lead a comprehensive study on structural reforms for the state’s energy and insurance markets. The CEA will work alongside various state departments and has invited input from stakeholders invested in disaster resilience. Experts and organizations are encouraged to contribute insights to inform policy development. n nAdditionally, former Cabinet Secretary Ann Patterson, now a Policy Scholar at Stanford’s Woods Institute for Environment and Sustainability Accelerator, has agreed to participate in the initiative in her personal capacity. n nIn 2023, Governor Newsom issued a prior executive directive urging the Insurance Commissioner to address longstanding vulnerabilities in the home insurance market intensified by climate change. This led to the implementation of the Sustainable Insurance Strategy, a reform package designed to strengthen market stability while preserving consumer safeguards and affordability. n nRecent regulatory actions have required insurers using advanced catastrophe modeling to expand coverage in high-risk areas. The Department of Insurance has completed evaluations of three forward-looking wildfire risk models, a critical step in executing the broader strategy. n nDespite rising premiums nationwide due to climate-related hazards, California’s home insurance rates remain below the national average—among the most competitive in the country. n nCalifornia continues to demonstrate leadership in climate action. Since 2000, greenhouse gas emissions have dropped by 20%, even as the state’s GDP grew by 78%, solidifying its position as the world’s fourth-largest economy. n nClean energy milestones include powering the state with two-thirds renewable or zero-carbon electricity in 2023—the highest such share for any major global economy. On numerous occasions this year, California’s grid has operated entirely on clean electricity for parts of the day. n nUnder the Newsom administration, battery storage capacity has surged to over 15,000 megawatts—a more than 1,900% increase—while over 25,000 megawatts of new clean energy resources have been integrated into the power system. n
— news from California State Portal (.gov)
— News Original —
Governor Newsom signs executive order launching next phase of whole-of-government response to the economic and insurance consequences of climate crisis
SACRAMENTO — Governor Gavin Newsom today launched the next phase of California’s all-in response to the ongoing economic impacts of the climate crisis, including the insurance crisis felt across the U.S. and globally as climate change creates new risks to property owners and insurers as well as the destabilization of the energy utility sector that directly impacts ratepayers and wildfire survivors. n nThe Governor signed an executive order that calls for multiple state agencies and departments to collaborate on research and recommendations to develop long-term durable tools to mitigate and fairly allocate the costs of recovering from natural catastrophes, further stabilize the insurance market and utility sector, make insurance more affordable and accessible, protect ratepayers, ensure compensation for wildfire survivors, and more. Text of the executive order is available here. n nThe executive order comes after the Governor signed SB 254 (Becker) to create the next generation of the state’s Wildfire Fund to support wildfire survivors and protect ratepayers from excessive utility liability costs. One major component of SB 254 directs the state’s wildfire fund administrator to prepare a report by April 2026 analyzing new approaches to responding to catastrophes, including wildfires. This executive order expedites the state’s work to undertake that analysis, reflecting the Governor’s urgency to protect Californians from the costs of catastrophic wildfire, and other climate threats and natural disasters. n nThe California Earthquake Authority (CEA), as the Wildfire Fund Administrator, will evaluate and prepare a report on innovative and durable reforms to California’s energy utility and insurance markets in the face of the state’s growing exposure to natural catastrophes. CEA will collaborate with several state agencies on the study and has issued a call for stakeholder contributions to the study. Those with an interest in California’s natural catastrophe resiliency are encouraged to participate and share their expertise. n nGovernor Newsom also announced that his former Cabinet Secretary, Ann Patterson, who will be joining the Woods Institute for Environment and Sustainability Accelerator at the Stanford Doerr School of Sustainability as a Policy Scholar, has agreed to participate in this process in her personal capacity. n nStabilizing California’s home insurance market n nThe Governor took action in 2023 with an executive order urging Insurance Commissioner Lara to take swift action to address decades-old issues with the insurance market exacerbated by climate change and expand coverage options for consumers, while maintaining strong consumer protections and keeping plans affordable. That led to the creation and swift execution of the Sustainable Insurance Strategy, a package of reforms that strengthens California’s marketplace and maintains strong consumer protections. n nThe Governor has continued to support the Insurance Commissioner’s regulatory actions in this space, including requiring insurers that use new catastrophe modeling to write more policies in distressed areas. The Department of Insurance recently announced it had completed review of three forward-looking wildfire catastrophe models, a key element of implementing the Sustainable Insurance Strategy. n nHome insurance rates in California – while increasing along with the national trend due to climate-related threats – continue to be lower than the national average, among the lowest in the nation. n nCalifornia’s climate leadership n nPollution is down and the economy is up. Greenhouse gas emissions in California are down 20% since 2000 – even as the state’s GDP increased 78% in that same time period all while becoming the world’s fourth largest economy. n nThe state also continues to set clean energy records. California was powered by two-thirds clean energy in 2023, the latest year for which data is available – the largest economy in the world to achieve this level of clean energy. The state has run on 100% clean electricity for some part of the day almost every day this year. n nSince the beginning of the Newsom Administration, battery storage is up to over 15,000 megawatts – a 1,900%+ increase, and over 25,000 megawatts of new resources have been added to the electric grid.