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Governor Newsom signs executive order launching next phase of whole-of-government response to the economic and insurance consequences of climate crisis

The 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.

Governor 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.

Stabilizing California’s home insurance market

The 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.

The 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.

Home 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.

California’s climate leadership

Pollution 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. 

The 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.

Since 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. 

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