By Bob Percopo, Lecturer in the Insurance Management Program, School of Professional Studies
The United States has done more to reduce its environmental footprint than most of the remainder of the world. What we haven’t done effectively is take our technology and export it to those countries that don’t have the willingness or the ability to improve their profile.
As Congress continues wringing its hands whenever there is a severe weather event and electric power is lost, life for the masses in affected areas quickly turns to inconvenience, hardship, disease, and sometimes death. We sit back and wait for the next event, but what’s missing is not fixing what’s broken. Look at Haiti and Puerto Rico. We have a real fix that is well within our capabilities—a fix that can change the landscape for those needlessly suffering and that will make a real difference.
The area of climate change solutions will require significant funding, and bespoke insurance policies can facilitate funding. The energy space is one of the largest consumers of funding and insurance capacity, and is no stranger to collaboration with insurers, among others.
Let’s use Bermuda as an example, for the simple reason that it has a government that is open to realistic solutions. Its electric utility, Bermuda Electric Light Company Limited (BELCO), along with the parent company, were bought by the Canadian company Algonquin Power and Utilities Corp. The fuel used by Belco is heavy fuel oil and diesel. The fuel is dirty, and the facility is in need of a major upgrade.
With Bermuda as the candidate for implementing the solution, and focusing on the available resources there, I propose that Algonquin, owner of the Bermuda electric utility, and SMR technology provider NuScale form a joint venture to look into the feasibility of utilizing NuScale’s Small Modular Reactors (SMRs) to change the face of power generation in Bermuda and use it as a test case that may be utilized in the Caribbean and other areas of the world that are currently using high volumes of climate-damaging fuels. This joint venture is an ideal way to facilitate funding requirements for SMR projects.
Why NuScale? Its reactors. On Jan 20, 2023, the U.S. Nuclear Regulatory Commission issued its final rule in the Federal Register to certify NuScale Power’s small modular reactor. The company’s power module became the first SMR design certified by the NRC and just the seventh reactor design cleared for use in the United States. The rule took effect February 21, 2023, and equips the United States with a new clean power source to help drive down emissions across the country, and possibly the world.
By taking a page out of the U.S. Navy’s exemplary safety record for its entire fleet, including aircraft carriers and submarines, the U.S. could lead the world in improving its climate footprint.
This is mitigating damage that has occurred and most likely will increase in the too-near future. We have the technology, the expertise, and the drive. Do we want to lead this effort as a country or do we want to leave it in the hands of countries such as Russia or Japan, who have black marks on their records with Chernobyl and Fukushima, respectively?
We have all the attributes to implement a climate beneficial plan, so it’s time to start taking action.
Views and opinions expressed here are those of the authors, and do not necessarily reflect the official position of Columbia School of Professional Studies or Columbia University.
Special thanks to Mike Wilson, SVP, Stevens Insurance, Energy Risk Management and Insurance, Ron Rispoli, Entergy, Director Risk Management & Risk Engineering, and Senator Joe Manchin, Chair of the Energy and Natural Resources Committee, US Senate, Paul Laurenzini, CEO NuScale (Retired) for their contributions.
About the Program
The Columbia University Master of Professional Studies in Insurance Management equips a new generation of professionals to lead insurance businesses with advanced industry knowledge, strategic and operational expertise, and the skills to champion new ideas. The program is part-time, online, and instruction is asynchronous to accommodate working professionals. It consists of 10 required courses taken over four consecutive semesters (approximately 16 months, total, including a summer session), and two on-campus, in-person residencies, to the extent possible, prior to the start of and at the conclusion of the program.
About Bob Percopo’s Course: The Role of Finance in the Insurance Industry
The course is designed to provide students with a rigorous combination of theory and practice in the fundamental principles of finance for insurance. Students will have the opportunity to become familiar with many of the core principles and concepts commonly applied in the insurance field, including the use of reinsurance, expense management, and capital deployment, as tools for organizations to accomplish a variety of “core” and “strategic” corporate goals such as reaching revenue and profitability targets, managing capital, entering or exiting new lines of business, buying or selling entire companies, and expanding into or exiting from entire geographic areas.
