Insurance

Buy Pollution Insurance and Save?

The solution to pollution is often said to be dilution, and yet, those who say that the most are probably trying to persuade others to allow them to pollute because, well, because they aren't polluting that much; according to them. Of course to me the solution to pollution is don't pollute, and as an entrepreneur seeking that ever illusive Sig Sigma perfection, I see pollution as waste, and waste is bad because it actually costs money.

Any bi-product not reused is waste and it costs money to dispose of it, and it is material that could indeed be used for something, which sometimes just takes a little creative intelligence to consider how or where you might use that left over material; gas, solid compound, or wasteful liquidity. Okay so, let's talk shall we, because now many corporations are considering "pollution insurance" to defer their risks of getting in a hot cease pool of water with authorities, governments, or regulators. After all, if there is a big pollution event, feathers get ruffled, and it will cost a lot to clean up.

On February 21, 2013 there was an interesting piece in Reuters titled; "China to push compulsory insurance for polluting industries," which stated; "China will force heavily polluting industries to participate in a compulsory insurance program to ensure they can adequately provide compensation for damage. Pollution has become a core concern for the stability-obsessed ruling Communist Party because of the public anger and protests it generates and because the issue cannot easily be hidden from view. "

There was another interesting piece I read in the Risk Management section of my Global Finance magazine issue of January 2013 titled; "The Polluter Pays – As regulators strengthen legislation, pollution insurance is ever-more essential."

Okay but consider what this is saying. Basically, it is saying that business as usual is fleeting and that governments and their regulatory authority is arbitrary, and it is also saying that companies can't trust the ever changing definition of pollution or a government which only enforces whatever happens to get into the media that week. All the more reason to shoot for zero pollution, but does this threat mean that you have to buy insurance anyway, despite your BMPs (Best Management Practices) just in case?

If so, insurance companies will want to do audits, and insurance companies will use their own lobbying skills to protect their losses, and in that case pollution insurance in protection of arbitrary regulation is going to become a little like extortion in the nations which are the most corrupt. With how broken our system is here in the US, I wouldn't be surprised if we become one of those nations, meaning even if you are doing everything right, you have to pay for protection and pass those costs onto consumers. Please consider all this and think on it.

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