Essay by Eric Worrall
“… Action urgently needed to save the conditions under which markets – and civilisation itself – can operate …”
Climate crisis on track to destroy capitalism, warns top insurer
Action urgently needed to save the conditions under which markets – and civilisation itself – can operate, says senior Allianz figure
Damian Carrington Environment editorThu 3 Apr 2025 20.41 AEDT
The climate crisis is on track to destroy capitalism, a top insurer has warned, with the vast cost of extreme weather impacts leaving the financial sector unable to operate.
The world is fast approaching temperature levels where insurers will no longer be able to offer cover for many climate risks, said Günther Thallinger, on the board of Allianz SE, one of the world’s biggest insurance companies. He said that without insurance, which is already being pulled in some places, many other financial services become unviable, from mortgages to investments.
Global carbon emissions are still rising and current policies will result in a rise in global temperature between 2.2C and 3.4C above pre-industrial levels. The damage at 3C will be so great that governments will be unable to provide financial bailouts and it will be impossible to adapt to many climate impacts, said Thallinger, who is also the chair of the German company’s investment board and was previously CEO of Allianz Investment Management.
…
Read more: https://www.theguardian.com/environment/2025/apr/03/climate-crisis-on-track-to-destroy-capitalism-warns-allianz-insurer
Allianz Insurance Board Member Günther Thallinger’s original post on Linked In;
Climate, Risk, Insurance: The Future of Capitalism
Günther Thallinger
Allianz SE
March 25, 2025CO₂ emissions directly increase the amount of energy trapped in the Earth’s atmosphere. This is not a vague or future issue—it is physical reality. The more emissions, the more energy retained. The more energy, the more extremely the atmosphere behaves. Storms intensify. Heatwaves last longer. Rain falls harder. Droughts cut deeper. This is the first principle.
…The insurance industry has historically managed these risks. But we are fast approaching temperature levels—1.5°C, 2°C, 3°C—where insurers will no longer be able to offer coverage for many of these risks. The math breaks down: the premiums required exceed what people or companies can pay. This is already happening. Entire regions are becoming uninsurable. (See: State Farm and Allstate exiting California’s home insurance market due to wildfire risk, 2023).
…Once we reach 3°C of warming, the situation locks in. Atmospheric energy at this level will persist for 100+ years due to carbon cycle inertia and the absence of scalable industrial carbon removal technologies. There is no known pathway to return to pre-2°C conditions. (See: IPCC AR6, 2023; NASA Earth Observatory: “The Long-Term Warming Commitment”)
At that point, risk cannot be transferred (no insurance), risk cannot be absorbed (no public capacity), and risk cannot be adapted to (physical limits exceeded). That means no more mortgages, no new real estate development, no long-term investment, no financial stability. The financial sector as we know it ceases to function. And with it, capitalism as we know it ceases to be viable.
…
Read more: https://www.linkedin.com/pulse/climate-risk-insurance-future-capitalism-günther-thallinger-smw5f/
Günther doesn’t go into detail about how Capitalism will solve the alleged climate crisis in his main article, but one of the comments and answers associated with the article is revealing.
Editor at Insurance Asset Risk & Corporate Disclosures
Thanks Guenther, can the only two levers you mention truely be achieved without de-growth? (Which wouldn’t be very capitalistic)
Replies on Vincent Huck’s comment
Günther Thallinger AuthorAllianz SE
Vincent Huck I believe we need to rethink the concept of growth. A starting point should be that financial information and sustainability information (regular reporting, quality assured) are integrated. This may help us to quickly switch away from an extractive to a regenerative and no waste economy. Growth of such an economy may actually be very wanted.
Read more: Same link as above
The no waste economy proposed by Günther Thallinger is a fantasy.
Yesterday I had to change all four tires on my 4WD, because they wore out in just a couple of years – road maintenance in my corner of Australia is somewhat neglected. The roads also wear out quickly in Queensland, thanks to decades of government neglect and our tropical climate – and the high proportion of drivers who embrace the safety of driving rugged 4WD vehicles, because of the state of the roads and because of the high risk of surprise animal encounters.
How do you apply the concept “zero waste” to consumables like tires and roads? There is no chance of recovering the original raw materials in a form which can be meaningfully recycled. Even if everyone switched to rail transport, railway lines also wear out – and we would need a lot more railway lines.
Replacing stuff which wears out accounts for most of that “extractive” economy Günther seems to despise.
As for Californian fire risk, which featured in Günther’s thesis about insurance becoming unviable, this is a problem caused by incompetent management of dry fuel load, not climate change. Clear out the tinder, with bulldozers if necessary, eliminate the fire risk. There can only be fire risk if the fire has something to burn.
Günther Thallinger currently serves as head of sustainable investment at Allianz – probably a rather thankless job these days, given how most of the world is backing away from green investments.
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
Climate crisis on track to destroy capitalism, warns top insurer
No, it’s the way to fight against a non existing crisis.
Seeing as how glaciers nearly wiped out humans, as it did numerous other species, we are on the preferred path.
When did this happen? Neanderthals did quite well during the last glacial cycles, and modern man didn’t leave Africa until the glaciers were retreating.
“Evidence suggests that glaciation events, particularly during the Pleistocene epoch, led to a significant human population bottleneck, with our ancestors experiencing a drastic reduction in population size, potentially to as few as 1,280 individuals.”
And apparently, humans are ancestors to AI.
That bottleneck had nothing to do with glaciers. There were never any glaciers in Africa and that is where most humans were at the time. First off, the alleged bottleneck is not proven, and if it did occur was the result of a volcanic eruptions, not glaciers.
Slartibartfast had problems with that, too…
The suggestion that anyone can count human population at any time in Pleistocene with accuracy of 10 individuals is laughable at best.
the CAGW cultists sure are getting desperate !
But the symbol above is wrong.
The AGW cult, and all woke, use the inverted Ouroboros
where the ass eats the head.
They are so fascinated by themselves and the smell of their own poo
that they can never get their heads deep enough into it.
Reminds of Naomi Oreskes.
It is not Climate Change per se, that will destroy capitalism. It is the anti capitalist policies demanded by climate change zealots that are the destroyer of capitalism Our very well tried and trusted capitalism based societies that dominate civilised societies across the world are being targeted by rabid socialists aka Climate Alarmists.
“The west and the church are the 2 only real obstacles in the way of global communism. ”
Frankfurt School, almost 100 years ago.
And they are being continuously bribed.
Communism just makes so much political sense…equal paychecks…equal sharing of production…lifting peasants out of poverty into factory jobs….except that it defies the competitive nature of human beings and the innate desire of people to improve their lives. And those that insist it’s the best system have killed millions in their desire to achieve that equality.
What?
Are you saying that “you will own nothing and be happy” is bullshit?
It doesn’t lift peasants out of poverty, it reduces everyone to the same level of poverty. Except for those in charge, of course.
Correct, and their supply chain management without profit motivation sans customer satisfaction incentives….is famous for sending trainloads of left-footed work boots to the gulags with everyone at the boot factory and the gulag getting equal pay of a food slip for 200 grams of ground beef with sawdust in it…unknown amount in next month’s pay packet…or knowledge of when the train with the ground beef might show up….
Or if it’s really ground beef.
Easy on the hyperbowl (hat tip Julia). They didn’t kill them all but interred lots for re-education. Leftys are big on public Ed in that regard.
He is very sure that his figures about increasing temperatures and their cause are true.
I would like to see his working to prove that hypothesis.
No?
Can’t do it?
Didn’t think so.
Gunther is a little hysterical.
He definitely drank the Alarmists Kool-aide.
He doesn’t know what he is talking about.
I think Gunther’s problems are in his fevered imagination. Reality is much different. Gunther couldn’t prove the temperatures are going to increase if his life depended on doing so. Yet he is sure of his position.
Fuzzy thinking, Gunther. Not the way an insurance executive should look at the world.
He is Allianz head of sustainable investment. Those returns are so poor that they will wipe out Allianz’s ability to insure. Right for the wrong reasons is still wrong.
Anyone that would take a job as head of ‘sustainable investments’ has got to be a bit weird since ‘sustainability’ is nothing but an unattainable pipe dream.
Rearrange it’s letters and Allianz is All Nazi.
The goal of the climate warriors has been the elimination of capitalism from the get go.
The left’s growing acceptance of violence to get what they want:
New bombshell study reveals ‘assassination culture’ spreading on the left under President Trump | Fox News
Did you hear about the guillotine at the “Hands Off” protest in DC, Mark?
Good one!
Did anyone have to be disarmed?
Regarding this article’s artwork, I’m not usually a fan of modern art, but this new sculpture in Canberra looks interesting. Jump to best photo for understanding what it looks like.
Thirteen tonne $14 million Ouroboros sculpture unveiled at National Gallery of Australia
State Farm has also pulled off the Texas Coast and state sponsored Texas Windstorm is subsidized indirectly by taxpayers. Increased insurance and property taxes are forcing too many into trailer parks which can and have acted like dominoes falling in a severe hurricane.
As for your roads I’ve been on worse in Nova Scotia. One experience somewhere near the Snowy Mountains with a rental vehicle properly fitted with ‘roo’ bars was coming around a corner with a big freshly dead red roo in the middle of the road. Was told later it would have been proper to pull it of the road but it was too big and with limited vision. Lots of road kill wombats also.
Thankfully I’ve only ever been sideswiped by a big roo once, big dent in the passenger door.
Have hit a couple of smaller wallabies but they got up and hopped away.
A friend once hit a wombat in a small car, and it totalled his front suspension. !
“There can only be fire risk if the fire has something to burn.” From the photos of recent LA fires, it seems that the best fuel are their houses – trees still standing but each house reduced to ashes and a lone chimney. House fire standards need a lot of improvement along with forest management.
Yes yes yes. Clear the fuels, fireproof the houses, maintain fire fighting equipment and personnel, provide water systems (storage, hydrants, sprinklers, etc.) All of which could be improved if the insurance companies provided community-level leadership.
Allowing the hazards to build up and then bailing on the policies is BAD for business. No premiums, no income, hello bankruptcy for the insurance cos. They might try positive engagement instead of pusillanimous advertising. They’ve DEI-ed themselves into a bottomless money pit.
House fire standards need a lot of improvement
Modern house construction is much less fire resistant than older construction, due to the materials used – such as LVL beams (one example). They catch sooner and burn faster than older construction (in that case, dimensional lumber beams).
Furniture is also more volatile due to the materials used.
And then there’s roofing materials…
The absence of man made climate change is more likely to end capitalism once the dud investments finally get written down to , er, net zero.
6th former Damian Carrington has been at the native home brew, again.
There is an old-fashioned word “honesty”.
Insurance companies do not practise it.
Be sceptical of their smooth wordsmithing.
Years ago we terminated all of our insurance except that made compulsory by compliant politicians. Financially, we are streets better off and laughing.
It takes only one or two episodes of insurers dudding you when you make a claim, to cancel out the whole concept.
If you think I am talking nasty exaggeration, dig out your own insurance documents, the agreements that bind, assume a bad scenario then work out whether you are protected or not. If you are reading motor vehicle insurance, for example, read up on how an insurer -any insurer – can class your own car as “written off” with severe detriment to you. (Example from Victoria, Road Safety Act 1984 provisions). Geoff S
Here, if you cause an auto accident, are underinsured and have assets, you are likely to be sued for at least some of your assets. Therefore, liability insurance above and beyond the legal minimum requirement could be a wise choice.
Scissor,
You miss the point, which is the long term money balance. Insurers who make a profit do so partly with your premiums. Geoff S
It’s a pretext for insurance companies to increase insurance rates because cLiMaTe cRiSiS.
Gunther has clearly achieved escape velocity in his climate derangement hysteria. Why is a serious insurance company allowing this pathetic individual to publish such uninformed rubbish?
Woke.
Places that flood are generally built on a flood plain.
Places that burn are generally in or near dry forests… (except for one off accidents)
Places that get hit by cyclones and tornadoes, are generally those that have been built in cyclone and tornado prone areas.
Dwelling and human development in these types of locations have expanded quite a lot.
We humans are not completely pathetic. We could if we wished build flood-proof, fireproof, tornado-proof dwellings. It’s not rocket science (and we can build rockets, too).
I think Australia has a pretty reasonable system for trying to cope with bushfires.. called the BAL rating.
I live in a BAL29 rated area, and when I renovated, I had to spend a bit more to be compliant with that rating.
New back veranda couldn’t be built using pine, so cost quite a bit more.
Timber used is very hard to burn, even in a fireplace, and it will also last a lot longer as well.
Front veranda, the bushfire side, is steel joists and 19mm compressed fibrous cement.. will not burn !
Flood proofing is easier.. just don’t build on flood plains. Can’t comment about tornado proofing, we don’t get them here. 🙂
As a friend and former colleague has said, “Rocket science is easy. Rocket engineering, on the other hand, is hard.”
Your friend is correct.
It is my current profession.
We are often called Rocket Scientists but in reality we are Rocket Engineers.
“sustainability information “
The very last thing the wind and solar industries would want to be fully exposed.
Wind turbines require massive amounts of magnetic neodymium, the production of which is a highly toxic polluting and waste manufacturing process. Then all the plastics, resins and other materials.
Massive concrete and steel bases that will never be removed.
One top of that there is the massive environment degradation while installing and later disposing of waste from them after a relatively short life… if they even bother..
Solar is even worse, requiring one of the most toxic and polluting manufacturing process around, using hydrofluoric and other acids for wafer manufacturing.
End of life is also a massive toxic disaster waiting to happen, with recycling too expensive, so to landfill, where toxic chemicals will leach into the ground over time.
Wind and solar are probably the LEAST SUSTAINABLE form of energy ever invented !!
“Capitalism” is not a “system”. It’s the recognition of natural forces that exist between people and entities as they exchange goods and services for their own self interests. It exists everywhere, even under the most repressive and supposedly non-capitalist regimes. (Ironically, it is under the most repressive regimes where it can be found in its most pure laissez-faire form, otherwise known as the “black market”) When conservatives speak of “capitalism”, what they are really talking about is “freedom”, people living under a paradigm where they can exchange labor and capital easily and without interference or theft from the state, and rule of law protects their right to do so.
Capitalism cannot be created or destroyed. Capitalism can no more suffer a demise or be replaced than can other natural forces like gravity. Every attempt to do so has resulted in mass economic misery, starvation and death. It can’t disappear or be disappeared. Capitalism is not a “system” that can be vanquished. It is the explanation of how people interact in their own self interest.
The only system that can fail is the one that maintains civil order and protects property rights as well as arbitrates exchanges of wealth. Only those with hard skills to trade will survive and prosper.
Simply produces the greatest good for the greatest number as well as elevating the productivity of all with consequential wisdom whereas all alternatives tried produce worse outcomes long term. If you think you’ve hit on a better idea you get to try it out with a collection of others and demonstrate the benefits to all. Dollar votes and real votes will be the judge of that.
John, you are trying to invent definition of something that has been defined long before you were conceived. Why do not you just use the world “capitalism” in standard sense?
AI summary
Capitalism is an economic system characterized by private ownership of the means of production, where individuals or corporations own and control businesses and resources, with the goal of making profits through competition in a free market
https://www.merriam-webster.com/dictionary/capitalism
an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market
If we use the word “capitalism” in its textbook meaning, we will see that it can be created and destroyed. It was imported by Europeans into feudal China, an example of creation. It was destroyed in Soviet Union when private ownership of means of production was outlawed.
My point is that it’s not a “system”. Systems are developed, implemented and actively managed. “Capitalism” in its purest form is the lack of those 3 things.
Capitalism is the only true democracy.
Individuals vote with their dollars.
If they want it, they buy it. If they do not want it, they buy something else, something they want.
According to the climate alarmists, the destruction of capitalism is precisely what’s needed to save the planet, civilization, the sun, moon, and stars, etc. Shoving mankind back to a pre-industrial, non-carbon-dependent society is exactly what the doctor ordered to force mankind into a more primitive existence when life expectancies would be lower along with deflated living standards and higher rates of malnutrition, frequencies of diseases, famines and all the other creature comforts and conveniences that have become commonplace because of big, bad capitalism. Bring it on but just leave me and most of the rest of the other 8 billion Earth dwellers out of it.
The insurers, like bankers, move money all day. They don’t do actual work. Their hands don’t get dirty. They do not create wealth, they only corral it. Which is why Wall Street so loves scams and grift. And when those are busted up by honest men, stocks take a tumble – temporarily we hope.
Gunther appears to be on his way to become a fossil.
Communism: an economic non-system where everybody is equally miserable and poor except for those with the guns who accumulate all the wealth created by the serfs.
I thought the whole purpose of the “climate crisis” was to end Capitalism and usher in a Socialist utopia.
One World Order with socialist economies (oxymoron alert) is the STATED objective.
Some insurance people will use every excuse they can to try to justify higher rates.
I’ve told one Canadian association executive that to his face.
Companies have a habit of reducing rates to compete then panicking when an unusual event occurs, such as the floods on the midwet coast in November 2021 and any bad year for forest fires.
Sometimes they do wake up, raising rates for earthquake risk which is not higher but is better understood.
But sometimes they are stoopid, such as the outfit that started offering US medical coverage with residential polices – very attractive price but had to increase it yearly when it was realizing the reality that some people visit the US for longer than they assumed. IOW they jumped into a market without doing homework.
OTOH, I once lived in strata title townhouse development whose management company found an insurer who recognized that the odds of 200 units separated into 8 buildings with 30 feet between them burning up completely was much smaller than of a single building of 200 units.
“CO₂ emissions directly increase the amount of energy trapped in the Earth’s atmosphere.”
I’m not sure that “trapped” is a useful term to use when describing the constant flow of energy from the sun and back into space. Nevertheless, it may take a century or so to add as much more CO2 to the atmosphere as we now have, “trapping” all that extra energy that CO2 absorbs. Meanwhile, here on the real Earth, the water cycle transports several orders of magnitude more energy from the surface to the clouds and back in one day (10^12 metric tonnes of precipitation daily) than the extra CO2 could possibly “trap”. Relax, Gunther!
If CO2 trapped energy, we would be an iceball.
Trapped means it does not transfer without someone pulling the release level.