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Green is the color: motivating the masses

Green is the color: motivating the masses

On an unseasonably warm winter day in snow-less Austria , I did my part to stem global warming: I bought a hybrid car.

Nobody likes the thought of polar bears drowning, more Katrina-type hurricanes and Kyrill-like windstorms, or even Venetian-style gondolas floating in lower Manhattan.

But while I consider myself greener than the average guy, I am also slightly motivated by another "green," as in the color of cash.

When I chose to buy my hybrid, it wasn't just because Al Gore made me feel guilty about buying a second car after watching his movie "An Inconvenient Truth." It was going to take more than that to shell out the extra euros to buy a hybrid.

Quite conveniently, there were some decent perks. I got a break on Austria's one-off car tax, known as NoVA. I'm also saving on car insurance, not to mention relishing what I'll save at the pump.

For all the scary predictions of what life for our children and grand-children will eventually be like on this planet, I think the best way to spur the masses to reduce carbon emissions comes down to financial incentives to help ease the transition.

Swiss Reinsurance Co. in Zurich announced recently it would give its employees incentives to reduce greenhouse gases. Through the end of 2011, the company is giving each employee one half of the amount they've invested--up to 5,000 Swiss francs (€3,090).

It is a natural extension of the company's goal to make its own operations carbon neutral by 2013.

Now I wondered, what if the insurance industry offered some type of incentives to its corporate clients. Would that provide some extra motivation to business and industry to undertake the major investment needed to reduce their emissions--or, like Swiss Re, to become carbon neutral?

Such incentives don't currently exist for commercial lines, but I was told it's not out of the realm of possibility.

"I don't think it's far fetched at all," Phil Bell, group casualty director for Royal & SunAlliance Insurance Group P.L.C. in London, assured me.

"I think insurers ought to be saying to business, 'Well, if you have good procedures in place that prevent damage to the environment, to the workforce, to your neighbors, that make sure your products are high quality, all of those factors should see premiums come down," he said.

Warren Diogo, a climate change specialist at Marsh's marine and energy practice in London, thought it conceivable that insurers in the future would start to link environmentally-friendly practices to good risk management.

"If the company is investing in clean technology and employing the best state-of-the-art risk management controls, then yes, I think maybe you could argue that insurers should look more favorably on that company," he said. "Maybe there is a link there."

For consumers, green incentives are fairly commonplace. In the United States., where hybrids are big sellers, drivers not only get discounts on auto insurance and tax-credits, but they also get free parking in some states and can drive in commuter carpool lanes.

Meanwhile, in Europe, hybrid drivers avoid the congestion charge when driving into London. And here in Austria, my wife and I got a small, but appreciated rebate from the state of lower Austria when we switched from oil heating to carbon-neutral wood pellets last year. (That was an expensive decision we made back when oil was over $70 a barrel. Again, economics were at work.)

But while it's important that individuals do their part, no matter how many energy efficient light bulbs I screw in, it won't do much if business and industry don't do their part.

Of course, that is happening. In Europe, the carbon trading scheme is providing a financial incentive for heavy carbon producers to reduce emissions through allowances that can be bought and sold.

Generally, the preference seems to be to wait until government imposes regulation before its time act.

The World Economic Forum in Brussels recently suggested the creation of "coalitions of the willing" whereby countries would cooperate on a specific global risk issues, like climate change. They would be "acting as an avant-garde for risk mitigation," WEF said.

What about "coalitions of the willing" among businesses, with insurers leading the way?

In the meantime, I can think of some more choice incentives for us hybrid drivers, like a half-price sticker for the Austrian autobahn, or a free large fries at the McDonald's drive-thru or how about ...