In a certain sense, my generation and those following it have already been left holding the bag of climate crisis, but considering the national situation in the US in more granular fashion, it becomes apparent that a great deal of climate bag-holding will soon be being lamented.
I’ve previously pointed to Christian Parenti’s excellent 2017 Jacobin piece “If We Fail” on the risk of a climate catastrophe-tax flight-infrastructure collapse spiral that we face in New York City; and to Jeff Goodell’s readable The Water Will Come that addresses, among other things, “real estate roulette” in Miami, as high-priced waterfront condominiums change hands in a city facing existential threats from sea-level rise and extreme weather (exacerbated by its porous geology) more dire and imminent than those menacing NYC. In 2019, Jason Jacobs – of growing My Climate Journey fame – featured David Burt (not, contrary to my initial impression, the trader played by Christian Bale in the film The Big Short, but evidently also someone who made money betting against the pre-Global Financial Crisis mortgage bubble) who has, in more recent years, founded DeltaTerra Capital, “an investment research and consulting firm serving institutional clients that seek to mitigate climate risk exposure and integrate climate-driven alpha strategies in portfolios.”
Burt’s thesis is largely summed up in the following quote: “[Given] how much those costs [of maintaining properties] are likely to go up as a result of increasing severe weather events, you find that a large swath of real estate investments are mispriced. So again, that’s the parallel to the sort of big short story that I experienced, 2005 through 2008.”
I started the year by offering some pushback to Fred Wilson’s take on climate adaptation and flight from coastal cities (because there are no places that will not be impacted by climate crisis); however, it is almost certainly true that just as non-human species are being forced to migrate poleward, so too will human populations, and this (along with the swamping/destruction of some coastal cities) will lead to tectonic transformations of global political economy. Given the scope of all this, and the severity of the potential negative consequences, I believe the emphasis should always be on mitigation whenever possible, and only secondarily on adaptation whenever necessary; that profit motives should be subordinate to human needs in climate response; and that climate/disaster profiteerism (like pandemic profiteerism) is reprehensible.
That being said, I think Burt’s position is somewhat different, for while he is, indeed, looking to profit off of climate harm, he’s looking to do so by incentivizing a repricing of currently mispriced assets, which would, in turn, be predicated on actually taking climate risks seriously. Unlike proponents of solar radiation management – whose profit-model is contingent on a failure to adequately address climate crisis globally – if Burt’s bets against US mortgages (that are currently systematically over-valued owing to a failure to take climate risks into account) pay off, it will be because intensifying climate harms (the fires, the tropical storms, the derechos, etc., etc.) drive a reckoning with our changed reality – either that, or there’s simply another massive housing market meltdown.
The point here is less to defend Burt’s particular position though, but to point out to those who remain unmoved by our worsening climate reality that if their hearts have yet to be touched, their pocketbooks may soon be. If conscience doesn’t move you, then perhaps self-interest will.
Postscript: I didn’t actually read this piece from the New York Times, but didn’t have to to confirm that it lends further credibility to my argument about innumeracy and undercounting of COVID-19 deaths across much of the globe.
Climate / Change 