Photo: Tony Salas | Flickr Creative Commons
In my home state of California in the United States, major drought-fueled wildfires tore across the state in the latter half of 2017 setting records for both the state’s deadliest fire, as well as the largest fire. Wildfire season is back in 2018 with the most destructive year ever—currently more than 13,000 firefighters are battling 9 large blazes that have damaged or destroyed over 2,000 homes or buildings and scorched over 730,000 acres of land.
The Mendocino Complex fire in Northern California recently broke the state’s previous record for largest fire, spreading furiously due to heat, wind, and years of drought.
California’s Governor Jerry Brown said this is becoming the new normal…where fires threaten people’s lives, property, neighborhoods and, of course, billions and billions of dollars. Many point to climate change as the driver for weather conditions fueling most of the wildfires. July was the hottest on record for the state, and extreme weather is causing larger and more destructive fires across the whole western United States.
Photo: RoyBuri | Pixabay
In developed countries, we tend to take infrastructure services for granted. It’s easy to forget, when living in London, Washington, or Singapore, how much lies behind the simple act of switching on the lights. But as a young person growing up in India in the 1960s, I knew what it was like to live with rampant electricity shortages and terrible roads. It was easy to complain about it, and we did. It seemed, then, that the solution was simple: government should simply cough up the money, get to work, and build the infrastructure.
But there was a lot more we didn’t think about.
Photo Credit: United Nations
Public-private partnerships fit well into many sectors and industries, most obviously infrastructure and social services. But I never connected PPPs to the life insurance sector until I read a recent online interview with Andreas Gruber, the Chief Investment Officer of Allianz, a German insurance and asset management company. In the interview, Gruber gives a lucid assessment of PPPs and why they are important to Allianz.
Altruistic and marketing motives aside, a private operator of infrastructure (in particular in an arrangement as highly structured as PPP) is likely to implement renewable energy technology only if profitable and/or mandated in the PPP arrangements. Critics are often angry that private operators think first about the bottom line, rather than make decisions based on the best interests of the environment. This is unfair to some extent, as private companies are often committed to climate friendly efforts (whether truly altruistic or for marketing opportunities). But as a general premise, the private sector will do what you pay it to do.