The biggest coming economic showdown you haven’t heard of

Close followers of the climate change battle have been watching carefully for one major event that might serve as a bigger catalyst than any other to mobilize legislative action. But that event has nothing to do with weather or natural disasters. It’s about money. Specifically, the big money behind the insurance industry.

You see, in the same way that net neutrality advocates benefit from having the support of companies like Google and Netflix, climate change advocates have been waiting for their own unlikely corporate allies in the insurance industry.

The reason is obvious in retrospect: rising sea levels and more frequent natural disasters will either make many areas uninsurable, or insurance companies will go bankrupt trying to insure them (and the same goes for insurance backed by the federal government.) Insurance companies have an existential need to get ahead of the curve on the climate question. It has just been a matter of when the battle would be joined.

That time is finally here, and that’s a very big deal:

A major insurance company is accusing dozens of localities in Illinois of failing to prepare for severe rains and flooding in lawsuits that are the first in what could be a wave of litigation over who should be liable for the possible costs of climate change. Farmers Insurance filed nine class actions last month against nearly 200 communities in the Chicago area. It is arguing that local governments should have known rising global temperatures would lead to heavier rains and did not do enough to fortify their sewers and stormwater drains.

The legal debate may center on whether an uptick in natural disasters is foreseeable or an “act of God.” The cases raise the question of how city governments should manage their budgets before costly emergencies occur.

This is the first ever lawsuit of its kind, but it will not be the last. The insurance industry is not going to do down with a sinking ship, and communities are obviously not going to go without insurance. Nor can the federal government realistically afford to singlehandedly cover the cost of repairing the damage from every increasingly severe wildfire, hurricane, drought, tornado, flood or snowstorm.

Right now the insurance companies’ strategy will be to lay the blame on governments for not doing enough to adapt to climate change. Attempts to set that precedent will be very challenging to say the least, and will likely fall short. The next step would be direct political action to support emissions reductions and to back away from coverage commitments.

Something is going to give. If the insurance industry gets serious enough to put enough of its money up to challenge the fossil fuel barons, we might even see some Republicans start to see the light on climate change. Probably not, but one can always hope.