Tag Archives: Climate Change

Faith, Values and Clim-Ergy

This week I was invited to a meeting of a faith-based group which is planning a conference on Climate Change for communities on the Connecticut shore. The invitation was an outgrowth of a presentation I gave on the subject earlier this year.

While I was flattered to have been invited back, I was also mildly uncomfortable, as I typically am when engaging with faith based groups. I do not believe in God. I do not believe in heaven or a here-after. Though I was raised in the Judeo-Christian tradition by a family which was decidedly ecumenical in its religious composition before ecumenicism was cool, I have never felt comfortable in the modalities of religions. I am what some might call a heathen.

Yet I am a person of ‘faith’, by some home-brew definition of that term. Faith and prayer to me are very personal expressions. In the context of religions, faith and prayer too often seem to me to become commoditized and trite, and devoid of the spiritual substance that they purport to give. They become the spiritual equivalent of cereal, mistaking it for food. But that is my personal perspective, and I respect those who gain personal sustenance and value from their religious experiences that I am unable to share.

Still, I feel like a poser when venturing into these communities. As an auditor, trained in the mentality of professional skepticism, and seared by experience in some level of confessed cynicism regarding the capacity of redemption for human-kind from its multiple and serial and repetitive transgressions, I come to these gatherings with what I like to think is a pragmatism that does not fit well with the idealism to which many of the faith based communities strive. And those who have followed this blog for any length of time can appreciate that my sardonic humor might be a show stopper in these venues, but not a hit.

All of which is a long-winded digression to the main point of why I continue to inject myself into places of discomfort. Faith based communities, in my experience, remain one of the few gatherings of civil discourse in a world that is rapidly disintegrating socially and politically. This has some historical irony in that religions of the world have perhaps committed as many, if not more, atrocities against humankind in the name of God than have political entities. (I haven’t got authoritative stats on that, but I’ll throw it out for debate.) Not surprisingly, given that many religious entities are merely political and economic operations in moral robes.

So the challenge for a person of my particular persuasion is to determine how to distinguish the truly faith based communities from the religious posers who co-opt the moral garb of sanctity in order to promote an agenda, but bring no more clarity or certainty or validity to the proposition than you or I.

Enough about me.

In the evolving climate and energy (Clim-Ergy) paradigm, there are many outside the literal faith-based realm who embrace the subject as almost a secular religion. They bring a similar idealism and energy. They approach it from a principled position, and with great self-confidence and certainty that their conceived solutions are as if received from the hand of God on Mount Sinai, consolidated from two stone tablets to an iPad for portability. If their faith and idealism and energy and intellectual gifts were enough, I am confident that we would have progressed much farther on this issue by now than we have. Having observed this issue for 11 years myself, and being a somewhat impatient person with an acute sensitivity to the criticality of time, I am concerned that they do not understand the human and economic realities of this subject any better than their opposition in the climate denial community, many of whom are also in faith based communities, are willing to consider the scientific and environmental realities.

We are at a moment when a growing number of people in the climate denial faction, and a vast number in the “I-don’t-really-want-to-know-or-care” denomination are steadily embracing a ‘come-to-Jesus’ moment, if I may borrow that phrase. “Something’s happening.” They dare not acknowledge it as climate change. They decline to take responsibility in whole or in part for its manifestation. They’re paralyzed by indecision regarding what to do about it. But they’re quite sure that they don’t want to change their current modality of existence for the possibility of heading off something potentially nasty at the pass. (See California and green lawns vs. food and drinking water for illustration.)

The extremes are driving the conversation, but substantive action on a meaningful scale is not happening, or happening at unnecessary cost due to the fractious political environment. The folks who recognize the problem are almost as much of the problem as the folks who refuse to, though the former would loudly protest that proposition, and many times for the same reasons.

For example, in the course of conversation with the faith group, one participant proposed the theme of ‘sustainability’ for the conference. After 11 years, I don’t have a clear concept of what constitutes ‘sustainability’ in meaningful terms. But I am positive that the participant’s definition is not the same as Exxon-Mobil’s, or the coal miners of West Virginia, or the farmers of the Mid-West and California agribusinesses or the politicians whose next biennial contract with voters depends on an electorate largely ignorant of the nits and lice that constitute a true understanding of ‘sustainability’ in action. And much of what corporations peddle as ‘sustainability’ is merely green-wash. If they were truly ‘sustainable’, many of their products would be off the market.

So one group defines sustainability as maintaining the status quo. The other group defines sustainability as moving to a new paradigm that can be maintained because the current status quo cannot. In both instances, the partisans are driven by faith, more than anything else, that their imperfect knowledge of the situation is valid.

So, if we have two faith-based factions, each of whom are equally certain of their values, but both of whom are in conflict for sharing the same reality, what does that leave us? Historically, and all too frequently, war.

The reality is that the ‘sustainability of the status-quo’ faction is the dominant and driving faction at this time.

The reality is that Reality is steadily undermining their credibility, with each fire storm, with each drought, with each monsoon, with each progressively more frequent incursion of the sea upon the land, with each death from protracted famine, with each ravage of disease in an interconnected planet, with each struggle for non-renewable resources in a contorted world of abundant excess and deficient necessities.

But is the alternative camp any more credible? They are offering to take us to a promised-land yet unproven on the scale that it must exist to replace our current reality. They are standing on a platform of science that it riddled with internal contradictions, critical gaps in knowledge, and hidden agendas of human motives of which science is no more immune than any other human agenda, as science has been through the ages. It is populated with some who have never run a lemonade stand, but confidently presume to advocate for doing away with the grid. It is led by others who have created some small success on a local level and believe that it can somehow be extrapolated to the planet, without a clue as to what that entails organizationally, resource-wise or politically. Yet others see this as an eternal cause through which to define their personal importance, and try to bend it to their own psychological need in the name of saving humanity. There are some who will strive mightily to advance wind energy in someone else’s neighborhood or view-shed, financed by someone else’s money. And somewhere in the din of all these conflicting profiles, there are some, generally quiet and persistent and pragmatic, who work diligently below the radar to make some substantive progress in the midst of the human circus.

Neither side in the Clim-Ergy paradigm is totally right or totally virtuous, though both will insist they are, and therein lies the problem. The issue is devilishly complex. Both factions are similarly complex. And both factions, in my view, share an all too human inclination to simplify the complexity to a level they can comprehend and take comfort in. Regrettably, dumbing an issue down to one’s comfort zone does not solve the issue, although it may temporarily sustain some level of self-esteem.

* * *

In approaching this meeting, I took a trip down memory lane through my eleven years of engagement with this issue, reflecting what I had invested in it, how I had approached it, and what I had accomplished. I have invested a considerable amount of time. I would not change radically how I approached it. But I recognize that I have accomplished little of what I hoped for. That is because accomplishing what I had hoped for ultimately requires bringing other people to a shared perspective, a shared set of values, an alignment of interests that can achieve what none of us can alone.

With this self-assessment in mind, I approach the faith community with some ambivalence; prepared to point out those ideas that I believe will prove counter-productive, but wary of sapping their enthusiasm and idealism with a pragmatism that may be mistakenly (or possibly correctly) perceived as cynicism and negativity.

Still, my concern is that the faith community too often believes that it will succeed by bringing the community to its point of view when in all likelihood that strategy will be modest in success and inadequate to need. The faith community, defined broadly, is more fragmented than it would like to admit. It exists in a world that is becoming more secular by most statistical accounts, suggesting that religion, if not faith, is losing its relevance to the broader populace. To persist in the notion that faith alone can drag the non-believing to a faith-based common ground defined predominantly by faith is an exercise in Einstein’s definition of insanity.

This manifests itself to me in the sincere response of one participant to the meeting who advocated:
“…connecting with the head is fine and will get some people to do some things, but connecting with the heart is where real change happens.”

I would counter that ‘head or heart’ is not a binary choice; the two must inform each other, and advance together. In my line of work, I do autopsies on loads of initiatives driven by the heart or the gut, but from which the head was apparently AWOL. And I have seen too many instances in which the head ruled without the heart to no positive purpose.

I would suggest that the Indiana legislature reversed its faith based position on the LGBT community not out of a change of heart but out of a cerebral calculation of the economic impact of its supposedly ‘moral’ position.

I would suggest that the South Carolina legislature voted to take down the Confederate flag not out of moral outrage for the carnage associated with it, or moral outrage for what the flag had come to represent for too long, but out of pragmatic calculation that the symbol’s optics will cost the State more in tangible and intangible ways from the people who detest it than it benefits from the people who still revere it. This calculation was no doubt more readily achieved in the wake of and with an eye to the Indiana experience.

I believe that the success of the Pope’s recent encyclical, yet to be verified in results, will be due to his effort to reach beyond the incantations of faith to incorporate the teachings of science and speak to the human conditions that transcend religious and philosophical boundaries. This is the true essence of communication: not merely to tell you what I want you to know in terms that I embrace, but to tell you what I want us to share in terms that we can both embrace.

So I become yet again concerned when a participant says:

“We are a group of religious folks, so we should embrace that aspect. People are waiting, anxiously, for the religious community to take the lead on this from a moral, ethical and theological standpoint.”

Again, I do not doubt the sincerity in which this belief is held by the individual and many others in the faith based community, but I question if they have a firm grasp of where the faith-based community stands in the esteem of a world ripped apart by faith-based conflicts, and abused by merchants of faith acting in ungodly ways in God’s name.

This is not to disparage faith based groups as a whole, but simply to point out that their franchise as a whole has been tattered by the abuses of too many among them. That franchise may be overvalued, but it is not without value.

What I believe the faith community can do is to be the facilitator of a community-wide discussion of shared values, not its values; and build the common ground of values that is so desperately needed and so desperately lacking. It should not try to promote its values as a focus so much as to strive to find the common values that all segments of the society can embrace, and build on those with its own contribution as well as others’.

Many of the values issues that underlay Clim-Ergy are at the core of other social, economic and political issues as well. It occurred to me as I approached this meeting that the real need is for human society at whatever level, parish, village, region, state, nation, planet to work toward the shared values on which it can build a shared future. It is audacious of me, to use a polite term, to suggest as I did to this group that before they contemplate a conference on climate change per se, they might want to explore the underlying core of generic values that we must begin to embrace and share in order to come to terms with Clim-Ergy, and our many other challenges. That process could begin next Sunday or Saturday or Friday night.

I have faith in the faith community’s capacity to facilitate change, but to do so, it must see itself more as a facilitator and collaborator than a leader. Sometimes, the best leadership is from within and behind, and not up front.
* * *
In closing, I am reminded of my favorite line from Oedipus Rex:

“When wisdom brings no profit, to be wise is to suffer”

…to which this accountant would add:

When prophets bring no wisdom, there can be no profit.

Whatever may be the core of our faith, we must be courageous to constantly test its wisdom against its fulfillment in improving the human condition.

Onward

20150711

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Science, God and James Inhofe

In a moment that caught undeserved attention,  a week ago the US Senate voted 98 to 1 to recognize the reality of climate change.  This Pyrrhic victory for the believers of climate change was made notable by the ‘yes’ vote of James Inhofe, Senate Denier-In-Chief, and coincidentally, Chairman of the Senate Environmental and Public Works Committees, both of which will be heavily engaged in the phenomenon.

As we have come to learn, Senator Inhofe’s vote was less an epiphany than a shallow effort to co-opt the issue by placing the issue in God’s hands and casting it as merely a manifestation of God’s Plans for just another splendid day in Paradise.  So, here we are.  Is it science or God’s Will?

Yes,  it is true. Since the Planet was slapped together in the Cosmic Workshop, we have always had climate and it has always been changing.  Thank you Mr. Inhofe!.  Your high school science teacher and minister must be proud of you.  But the issue remains: are we getting more than our millenium’s fair share, and are we major contributors, and therefore, major actors in influencing its direction.  Not to take anything away from God, mind you.  He (or she, it can still be argued)  did a marvelous job.  But something is seriously out of whack and deserves attention it is not getting, either from the All Mighty or from us.

I know that Senator Inhofe is a private plane pilot, and the record suggests that his piloting skills sometimes place too much reliance on the assumption that God is his co-pilot. With that in mind, I am deeply  skeptical about his judgment as he pilots (or hijacks) Senate policy on the environment and climate change.

This issue of Science versus God in the matter of climate change seems to be slowly tilting in the favor of science as a growing number of people, including Evangelicals, recognize the undeniable:  that our environment is altering at a rate unprecedented in our experience across the total range of ecologies and factors. And the net result is not positive.  So,  let’s try to distill knowledge down to some rudimentary facts, and not get lost in the minutia that drives too many discussions.

–  Depending on one’s source of information, The Planet has been in business for between 5,775 and 4.54 billion years,  give or take a million or two for rounding.

–  Depending on one’s source of information, Version 1.0 of humankind has been operational for between 5,775 years and 1.7 million years.  If you take the longer value of planetary existence, people have been messing around with the neighborhood for 0.0374% of the Earth’s existence, and most of that with little or no impact.

–  It is estimated that the Planet’s carrying capacities for humanity during much of this time up until the beginning of the twentieth century did not exceed 1.75 billion people.  Population is projected to reach 9 billion by 2050. The earlier number reflects the technologies in place to support the population. The latter number is made possible by the technologies that have proliferated in the twentieth century, when the budding industrial age of the prior two centuries achieved full blossom and ubiquity, thanks to the maturing of the oil industry.

–  The Industrial Revolution began around 1750, with the benefit of coal to fuel it.

–  Joseph Fourier, some seventy years later and more by coincidence than by consequence, proposed the Greenhouse Effect theory.

–  John Tyndall in 1859 confirmed the Greenhouse Effect theory in laboratory experiments.

–  Coincidentally, in 1859 the first commercial oil well began production in Titusville, Pennsylvania.

–  In 1896, 52 years BG (Before Gore) Swedish chemist/physicist Svante Arrhenius produced the first mathematical model to calculate possible effects of  Global Warming from greenhouse gases.  He viewed the impacts as largely beneficial to mankind, mostly through enhanced agricultural impacts.  His model understated the impacts to follow, but he cannot be faulted for that as he probably did not calculate the impact of the first automobile produced in 1889, nor did he get the memo of Henry Ford’s master plan for mass mobility, which achieved reality in 1913 with the first plant to mass-produce automobiles.

– It takes between 2,000 and 10,000 years for Mother Nature to cook a barrel of crude oil.  (God could probably do it faster, but appears not to be in that business, or Exxon-Mobil would not be so worried about where to replace its diminishing conventional reserves.

–  It is estimated that the total global inventory of conventional reserves at the beginning of commercial exploitation was about 3 trillion barrels.  ( Conventional reserves are the easy stuff, excluding the unconventional stuff made available by fracking that makes such a mess and is causing increasing rumbling.  If Coca Cola was in the oil business, it would brand  conventional reserves ‘Crude Classic’).

–  Of that, it is estimated that we have depleted one-third or 1 trillion barrels by the year 2000.

–  Of that, it is estimated that half was depleted in the last half of the twentieth century.

–  The United States has 5% of the world’s population, and used 25% of the world’s annual consumption of energy as of 2000.

–  The coal and oil that is consumed is carbon that was in essence ‘sequestered’ until combusted. The consumption of that carbon in such relatively large proportion in a veritable nanosecond of geological time can only rationally be viewed as a human ‘forcing’ of the climatic norms that have more slowly evolved over thousands of years.

–  We know the chemistry of carbon consumption.  We know the physics of its effect on the atmosphere.

–   We know what caused Los Angeles’ smog in the latter half of the twentieth century,  and we know that we were capable of intervening to reduce it.

–  We know what causes algae blooms in lakes and rivers, and other forms of industrial pollution, and we know how humans can cure what humans create or contribute to.

–  We detected the depletion of the Ozone layer, and with the aid of science, bent political will to do something to reverse the process.

With these facts of history and science as context, for Senator Inhofe and other political and thought leaders to deny the human role in mitigating conditions and consequences to which it contributes is an act of colossal stupidity or craven indifference*.   (*See also: Concerted Ignorance).

*   *   *

So much for science and history and facts.  Let’s spend a moment with God.

I am a person of faith, but I happen not to subscribe to any particular brand of religion.

I would like to think that there is a benevolent God who is watching over me and has a plan in which peace and prosperity and well-being are secured for myself and humanity in general.  Unfortunately, I have not found evidence of it.

I see the universe as a place in which magnificent beauty and brutality exist side by side in the interplay of forces that shape and evolve it….by whatever plan and whose ever hand.  I do not presume to understand it, nor do I expect to before my clock runs out.  So I navigate the unknowns with the best I can hobble together of wisdom and insight, much of which I have accumulated as the byproduct of my mistakes.  Nonetheless, I am grateful that I and others are capable of doing so because,  by whatever means, we have been endowed with the capacity to reason and learn and self-actuate within the boundaries of our resources and the random roll of the cosmic dice that is the nature of the universe.

The Judeo-Christian theology to which Senator Inhofe professes to subscribe recognizes the reality of human intelligence and free will.  After all, it is that free will and the exercise of choice (though often not intelligence) which makes us capable of sin, the raw material for all the religions to sell salvation through their particular franchise with God.

So, if I were to presume to argue the case for climate change responsive action from the vantage point of Senator Inhofe’s toe-hold on reality, I would argue this.  A God which has given the children made in his image the capacity for rational thought, and is observing them squandering it yet again, must surely be displeased, and disinclined to accept the responsibility that Senator Inhofe, and Ted Cruz and Bobby Jindal and Marco Rubio and a vast array of other numb-nuts would like to dump in his lap.  I imagine that an all-knowing, all-powerful God, whom the Bible suggests had little hesitancy to rain down bolts of lightning upon the richly deserving, could exact some terrible punishments on the criminally indifferent for the trespasses they are wrecking upon His realm.

I’m waiting.

And while he’s at it, could he take out ISIS as well?  It would save a lot of unnecessary hardship.

Onward.

20150208

The Storm that Wasn’t, And The Storm That Might Have Been

So Philadelphia and New York City are whining that they were denied the ‘historic blizzard that the weather establishment was promising, and that they were denied the adrenaline rush enjoyed by Stonington, CT and Scituate, MA and many other communities north of there.  All that prior prep.  For Nothing!

The big story was the historic storm that didn’t happen.  But the bigger story is of the storm that might have happened, and that is a story of future relevance.

When I’m not writing blogs or harassing my local officials for one reason or another, I devote some time to amateur radio, and specifically areas of the hobby known  as Amateur Radio Emergency Service (ARES) and Skywarn.  Skywarn is a group of trained volunteers, many of them hams, who assist the National Weather Service by reporting ground conditions during and after major storms.  We provide ‘ground truths’ that radar and satellite imagery cannot provide, and fill out the picture of a weather event.

As such, I pay a little more attention to the weather than many, and when a ‘historic storm’ is about to visit the neighborhood,  I pay a lot more.  On Saturday night, Jan.24, I began monitoring the GOES satellite images to gain a sense of how the storm might develop.  incidentally, for any of you who are mildly interested in the weather, I would encourage you to make the GOES satellite images one of your favorite sites.  I like the infrared image on loop, which gives a fascinating insight into how globally driven our local weather patterns are.

The storm did not look that impressive Saturday night, but I was mindful that, 36 hours away from the main show, conditions  that have little prior evidence on imagery can explode quite dramatically.  This is where the models, with different information and predictive capacities augment what radar and satellite can tell us about the past and present, and allow us to reasonably extrapolate about the future.

When I awoke Sunday morning,  the event morphed in projections from a major snow event to a blizzard of historic proportions.  Still the imagery had not changed that much, although it showed potential that could not be dismissed.

As I continued to watch the GOES images through the day and take screen shots of the development for future reference, the main body of the storm from the northwest over Canada continued to develop, and was impressive in mass.  But this was to be a Nor’easter, which suggested that something significant needed to be developing in the Gulf and Caribbean to feed the cold northern air.  This had been a recurring pattern since 2010 in which strong Lows combined cold northern air and supersaturated southern air, drawing from a great geographical expanse  into a weather witch’s brew.

As late as 9:30 Sunday night, I didn’t see what I was expecting.  I didn’t see a tightly wound, powerful Low pressure cell that was in a position or powerful enough to pull in Gulf Stream moisture.  I did see a high in position over the Carolinas that could push an evolving northerly flow of moist air out into the Atlantic.  But I’m just an amateur, speculating with minimal information and without a model or a degree in meteorology.

But there was one interesting feature that caught my eye by Monday around 4:30 p.m..  The evolving blob of  moisture that I first saw off the Florida coast at 5:30 am appeared to be breaking into two distinct masses of moisture out in the Atlantic, as if something was cutting the source with a knife. The western blob would become our weather.  But the eastern mass which was much larger and more powerful, would bypass us for Nova Scotia and New Foundland.  That eastern mass, if it had wrapped into New England, would have developed the historic storm that was predicted.

*   *    *

The day after the storm, with incriminations of the National Weather Service   flying as fierce as the snow flakes the day before.  NWS acknowledged its failure to effectively communicate the sensitivity of its forecast to variance as well as the potential severity of the storm.  This is the point that bears emphasis with future relevance.  We have been, are now, and will continue to deal with conditions that will be highly variable.  Even as the technology of forecasting advances, it is likely to struggle to keep up with and comprehend a continually morphing weather system.   Weather communicators must present their forecasts with that in mind, but we the public must also be prepared to receive that with an understanding that this is our current reality, and quite likely our future.

*  *  *

On the eve of the historic storm Five Thirty Eight published an article listing the ten most severe snow events for New York City, Philadelphia and Boston going back as far as 1869.  It was interesting to note that each decade from the 1870s forward averaged one or two major storms among the three cities, with the exception of the 1940s with 3.  but the  1990s had four Top Ten: the ’00s six; and this first half of the Teens, six, with half a decade to go.  Do you see a trend? Does this refute Global Warming? No. Counter-intuitively and ironically, it confirms it.   Our polar regions, once outposts of frozen stability, are careening through cycles of seasonal variability,  The equator isn’t getting any cooler; but is sending more super moist air north. The two regions are shaking hands in the middle, and squeezing the atmospheric sponge above us.

*    *    *

Today I noticed an experimental site on the National Weather Service that seems to address the complaints with last week’s forecast.  Labeled Experimental Probabilistic Snowfall Graphics, it slices and dices the possibilities for snowfall as finely as one could reasonably ask.  Just in time for this week’s major storm.

*   *   *

Coming Attractions:  Science, God and James Inhofe

Onward

20150201

Climate Change: An Affirmation – With Regret

This week was for me a culmination in my ten-year journey as a student in the matter of Climate Change.  Having entered this journey as a tangent to a coastal land use  study project, I have endeavored to ensure that what we learned in a workshop of 2004, November 19 translated into policies and actions that might protect us from unnecessary risk, and still allow us to exploit the limited opportunities of possible advantage.

When I emerged from that workshop ten years ago, I perceived two distinct threats.  The first was the array of threats posed by natural forces, aided and accelerated by contributing human actions of unintended consequences; i.e. our destabilizing of the environment’s carbon component with collateral environmental and economic consequences.

The second and more troubling threat was the prospect that the human response, the managed response, to this natural challenge would be as muddled and incompetent as we have too often witnessed in execution of our wars, our economies and our political institutions.

In my small parcel of this planet, in the matter of community planning for storm resilience and sea level rise sustainability…that second threat has now been realized in the essence of a Resilience Plan that is little more, in my opinion, than a thinly disguised fig leaf of protection for business as usual with no credible plan for substantive action, but a veiled accommodation for continued investment in vulnerable shoreline property that is pouring long-term money into the sea in pursuit of short-term profits and another hit of  shoreline tax revenue, for which the cost of withdrawal will likely be greater than the near-term benefit.

The attendance for the meeting was large at about 100, compared to prior efforts. The presentation of the plan was classic bureaucratic bilge.  Our Skeptic in Chief regaled the audience with our wonderful accomplishments to date and the fact that we are revered by other communities and our region for our progressiveness, which in truth is comparing the little we’ve done over ten years to the nothing that others have done.  In truth, we’ve done a lot of planning, but very little implementation. And of the action we’ve taken over those ten years, eighty percent of it occurred since Storms Irene and Sandy when Mother Nature slapped us into some measure of reality, taking hypotheticals to ground zero.

Then followed the presentation of the report.  In fairness, the report contains much useful information about policy options and present and future conditions to which they might apply.  But it lacks the critical elements of a plan: a list of specific actions, timelines for implementation, critical trigger points and criteria for contingent actions, and the defining objectives that the preceding are intended to achieve.  In other words, it is not a ‘plan to act’.  Though the Plan’s horizon looks out to the end of the century, which many assume to be a long, long way away, the conditions that it anticipates addressing need concerted attention beginning now.

The most glaring faults in the report, and the reveal of its true intent can be found in two hypothetical illustrations of future action in two areas of town that will be subject to eventual inundation. One is an industrial area in which the report suggests in one breath that current industrial uses, including fuel storage, may need to be relocated eventually due to threats of storm surge and eventual sea level rise.  But in the next breath,  it proposes replacing industrial use with possible new residential construction in an area with no particular aesthetic appeal, and the same risks facing industry.  Short form: we need to protect business property, but it’s o.k. to put people at risk.  Who would benefit from this cerebral methane emission? Developers who would take their profits up front, if someone was dumb enough to buy these houses, and leave the risks for the buyers to realize and lament at some future time.  And the Town can brag about added tax revenue, until the costs come in down the road in some future administration.

The other proposal doubled down on absurdity.  It addressed a road where approximately thirty houses will be subject to probable surface inundation by 2050, and a remaining nineteen may survive under tenuous terms of storm risk on bad days and sustainability of livable conditions on good days. For this area,  the authors applied their prescriptive magic to suggest retreat in stages that would expend resources unwisely to sustain the ultimately unsustainable for as long as possible. Call it Denial-to-Resignation strategy.

But then, the end result of this three stage retreat to reality is to create on land abutting the now undefendable yet another area of new construction that will be equally undefendable and put new people and new capital at exactly the same risks of human loss and premature decline as sea level rise continues to progress.  Einstein’s definition of insanity in action.

It’s not as if the flaws of this strategy are in any way hypothetical.  While this report was in development, and the implications for this particular street were well-known (in fact, have been for seven years), a local developer has bought three existing houses on this street for tear-down and new construction.  One has been completed and is now on the market….for $1.4 million.  Lovely house.  Wonderful water views.  Quality construction.  It should retain economic value for 100 years under normal conditions, passing value from one owner to another during that period.  But if projections are correct and the area floods regularly by 2050 at the latest, or possibly as early as 2030, the value of that property is likely to drop like a stone.  Added to that is the cost during the interim of insurance at painful premiums, even recognizing that it is built to today’s FEMA NFIP standards, which are inadequate going forward as sea level rise progresses, and irrelevant to sea level rise.

So who benefits?  The developer, if he can find a sucker (uninformed buyer) to purchase the property.  He takes his profits and walks away, leaving the buyer, and possibly the Town holding the long-term bag of risks.

That is totally possible because the developer is not required to disclose future events that have not happened.  The realtor is not obliged to do due diligence in disclosure about anything but historical events, and rightfully so as assertions about future climatic events are beyond a realtor’s professional scope of competence and obligation.  It is the Town government’s obligation, knowing what it now knows about future possibilities, to place relevant disclosures with appropriate caveats about what future conditions this parcel may be subject to, and what contingent government actions might result, such as condemnation in the event that the property becomes uninhabitable and a risk to human health and safety.

Protections for home buyers of vulnerable property should be no different in principle than protections for car buyers and consumers of prescription drugs.  But builders are not subject to lemon laws.  In the case of property, protection against abuse, where regulation exists at all, should be with the local or county government and at the very least in the form of a warning label, like prescription drugs, that advises of possible ill effects to your well-being under certain conditions of use.

But The Plan does not propose such a procedure to begin avoiding knowable future risks, nor does our local leadership appear remotely willing to bite that bullet.  What should happen is that the government should institute a disclosure requirement in the property record that clearly states the risks to prospective buyers and lets them make their own informed decisions.

Instead, the government prefers to align itself with the interests of developers and sellers and its own myopic pursuit of near-term tax revenue.  Its bigger fear should be of the unsuspecting buyer who later discovers what the government knew but has refused to disclose.  This is worse than concerted ignorance on the part of government. Possibly, in my opinion, worse than criminal negligence. If allowed to continue, it will have severe repercussions.

So, we will see if this first installment of institutional idiocy finds a market, and the next two properties in queue follow.  Caveat emptor.

*   *    *

Next came public comments.  The discussion was diverse in point of view with some preponderance of skepticism about the seriousness of the threat.  Our chief denier in residence, who I call Mr. Sunspots, delivered his usual assault on the theory of climate change.  A more reasoned citizen questioned the scientific basis for the report and its lack of citation in the plan.  Ironically, when asked by the moderator if the chief scientific advisor on the panel would like to defend or explain the science, he demurred.  Not helpful.

The more troubling moment for me came when a resident of the street subject to probable inundation stated that he had purchased his property on that street five months ago without full knowledge of risks and the prospect of a possible future condemnation.  Members of the report panel vigorously denied that the report was recommending condemnation.  I was astonished.  The report explicitly notes abandonment of certain roads as a possibility.  It specifically notes that failure to sustain acceptable quality water and waste management may be conditions for condemnation when sea level rise threatens the sustainability of the property.  It’s there in the policy definition of the report.  The three stage exhibit of accommodation strategies for that particular road make it the poster child for the strategies.  To deny the obvious was stunning.

This speaks to the ultimate problem of moving climate change adaptation strategies forward with a largely skeptical public.  If the government is unable or unwilling to justify and defend its science, to put forth unflinchingly the steps it is preparing to take based on that science, and to speak unequivocally to the possibilities we face, then we have no prayer of addressing this critical issue in a timely and effective and optimal, or even minimally sufficient, manner.  We are dooming ourselves by our own willful stupidity and cowardice.

*   *    *

We recently learned this week of the success of the European Rosetta mission to a comet. It determined that such interstellar cosmic vehicles do carry organic material which might spawn life on other space rocks like ours.

There have been growing exhortations among the cognoscenti (Stephen Hawking) and technorati (Elon Musk) that we must resume our interplanetary exploration of near space and prepare to colonize on other planets in order to preserve our species from a possible catastrophic cosmic hit on the Home Rock.  I agree that we are destined for destruction, but I am comfortable with the prospect that we can do it to ourselves far quicker than the prospects of getting slammed by a high velocity space snowball.

Allow me to entertain the fantasy that there is indeed extraterrestrial intelligence out there, monitoring our every move as diligently as the NSA and Google, and possibly reading this blog.  This is my message:  Quarantine Earthlings until we are cured of our idiocy. Don’t allow us to infect the rest of our solar system with our toxic, contagious culture of self-destructive values. Don’t let us off Home Base until we prove that we can manage ourselves.  And if by chance we should get whacked first? Well, I guess that contains the problem by other means.

Unless, of course, we get cue-balled into a trillion pieces; in which case all bets are off.

Onward….maybe.

20141123

Prior postings of possible interest:

Resilient, Sustainable or Unsustainable?

Imperfect Knowledge or Concerted Ignorance?

End Game: Flood Insurance and Coastal Retreat

Trianuglating the Flood Insurance Vortex

 Video of Town of Guilford, Connecticut Public Meeting on the Resilience Plan

 

 

 

What’s In a Name: Climate Change, Weather or Not

Alarmists will attribute every weather event to climate change. Deniers will dismiss climate change as just weather variability. Apathetics will dismiss the whole discussion as irrelevant. Is it?  What’s in a name? Identity, understanding, specificity,

There has been a running battle between meteorologists and climatologists as to the interpretation of the day-to-day events that we know as weather. Neither side has been all that helpful.  Meteorologists seem to argue that the two are different, and ignore that daily weather, cumulatively, is climate on the installment plan.

Climatologists think in long-range terms transcending the boundaries of individuals’ personal timelines, and threshold of caring.  Thus the possibilities that trouble climatologists are generally dismissed by most of the population which doesn’t view events in the same parameters.  Further, while climatologists generally paint scenarios in decades or centuries, the time frame in which cumulative daily weather events will trend to undeniable consequence, they are generally shy about making definitive statements regarding what recent events add up to.  Has recent tornado activity increased in severity? Dunno. Will a warming planet spawn more tornadoes or hurricanes with greater force? Dunno.  When will sea level rise reach critical levels of impact in various areas? Dunno.

I can respect the admission of what we don’t know, and I prefer it to brash projections based on what we think we know.  But, from a managerial point of view, it makes very difficult the task of positioning one’s self for a future that could be radically different in unpleasant ways…or not.

The recent National Climate Assessment repeats the urgency of preparing for climate change.  I accept it as a working premise, in spite of all we do not know, because of what we do know. I have paid attention to weather during the past ten years.  No, I don’t play a weather personality on TV.  I’m just like you and Bob Dylan.  I don’t need to be a weatherman to know which way the wind is blowing.

I perceive that weather events of all kinds in aggregate have increased in frequency and severity and impact over the past ten years. Since 2010, even weather personalities and many bona-fide meteorologists have come to speak routinely about ‘extreme weather’ with each such event. How long until they acknowledge that which they now call extreme as ‘the new normal’?

In corporate circles where the words ‘climate change’ dare not be acknowledged, because one knows not which wing-nut among customers, clients or other stakeholders might be enraged, the term ‘sustainability’ has served as a proxy for discussing adaptive strategies for the unspeakable.

Hunters and farmers and gardeners, and business people who will vehemently dismiss climate change in one breath will acknowledge in the next breath that the norms of the environment on which their avocations and occupations and ventures depend are undergoing undeniable change; not merely variability.

Firefighters who once spoke of ‘wildfire seasons’ now acknowledge that wildfires no longer have ‘a season’.

Despite warnings of approaching drought, the West is belatedly coming to grips with a future that is not likely to improve in the near term, and for which adaptation will be wrenching, with collateral impacts for the rest of us.

Does it matter whether we call all of this climate change or weather?  One can choose to look at storm surge, or future sea level rise, or drought, or deluges, or wildfires or flooding or extreme temperature  fluctuations,  or species migration and extinction, or tornadoes and hurricanes or economic loss from extreme weather events and resulting damage to the built environment… as individual issues. Coloradans can dismiss sea level rise. Connecticut Yankees can dismiss the risk of wildfires. But when these disparate constituencies find themselves competing for constrained resources to cope with their individual crises, they may belatedly acknowledge that they are in the same boat on the same turbulent sea.

We have witnessed the economic and political trauma resulting from storm impacts, property loss, and resultant economic hardships from the rising cost of flood insurance premiums.  What happens when comparable costs associated with all the hazards listed previously come to bear on all of us in unison?

Connecticut is today actively engaged with the issue of storm surge, courtesy of Storms Irene and Sandy.  But its legislature is beginning to look down the road at its water resource relative to future projected droughts before we become Texas and Arizona and Nevada and California.  Next we might want to think about fire hazards at a level we have not previously experienced as we observe some of our most prominent species in our heavily forested state fail over the progressively warming years.

This is the importance of a name. If we do not begin to recognize these diverse hazards as part of a shared paradigm; if we do not begin to comprehend that we will have to prioritize our limited (yes, limited) resources across this array; if we do not grasp that they are all a part of a paradigm that is driving each of them in various ways, then we cannot begin to intelligently manage the situation to our best advantage.

*   *   *

This week’s announcement of an agreement between the US and China on greenhouse gas reductions is a bit of drama without very much substantive impact at ground zero.  China has agreed to do what it must anyhow to avoid environmental suicide, but has likely been granted flexibility in approach that does not grate on its imperative of not succumbing to ‘foreign domination and dictates’ (not too different from our own ‘People’s Congress’).  And Mr. Obama will return to face a semi changed but not evolved group of Luddites in the opposition and cowards in his own party who will continue to stall progress at the national level where we can best move action to critical mass and momentum.

We are told that, while Congress may be morally, ethically and intellectually bankrupt on this issue, real progress is beginning to happen at the local and state levels where public executives have to deal with the real problems.  That may be true, but in my own state, which I affectionately refer to as ‘the land of good intentions’, because we really can’t afford more than symbolic acts of enlightenment, we have a long, long way to go.  And for all that we know,  few leaders have the courage to speak in terms of Climate Change.

What’s in a name? Identity, understanding, specificity,  Or sometimes, sustainable obfuscation.

Onward

20141114

 

 

 

The Grid: News of its Death Is Premature

The latest claptrap ricocheting off the walls of the business and environmental media echo chambers is word of the inevitable decline and death of the electric grid…or not.  It is more likely to succumb to neglect, along with the rest of our infrastructure, than to technological displacement by renewable technologies any time in the foreseeable future.

Nonetheless, the subject is a tug-of-war between two rival camps of idiocy.  One is comprised of the fossil fuel feudalists and their various front organizations who are fighting the growth of renewables at any scale as a perceived threat to the inevitable decline of cheap and easy carbon.  The other camp  is a combination of visionaries and eco-huckster capitalists who believe in a Disney World (both capitalist and fantasy) future but ignore the social and economic inertia that impedes reasonable progress at best, and their wildest dreams, to be sure.  The utilities themselves in varying degrees are more inclined to be on the side of the Feudalists  than the Fantasy folks.

The following quote is indicative of the kind of siloed, echo-chamber consensus that propagates the illusion of inevitability:

“Utilities are afraid that solar power will be to the electrical grid what PCs were to mainframes, or e-mail to the Postal Service: a technology that will simply kill its predecessors. Coal and nuclear power are both doomed, and the profit-making power grid with it. That’s all to our benefit.”

The writer may not realize this, but personal computers have not dispatched the mainframe; they have merely augmented it.  The Mainframe of yore has morphed into the server farm of now; Big Iron still lives. If it didn’t, there wouldn’t be The Cloud and Big Data.  And, while information is more widely distributed than in the ’70s through the internet, ironically it is every bit as centralized and concentrated as previously.  Just ask your government, or Jeff Bezos, or Eric Schmidt or Mark Zuckerberg.

And email has assuredly impacted the Post Office, but it has not rendered it to the dust bin of history yet, nor is it likely to in the near future.  Congress has reserved that privilege to itself.  The Post Office can still evolve, adapting its network to new and evolving needs, if allowed. But the same sclerotic forces that would kill renewables are doing their best to slay the postal service and any other institutions of social and economic unification.

The electric grid is most definitely in transition, but it is by no means a ‘dead man walking’ for the next half century for three very simple reasons.

1) The technology to replace it with renewable energy is not there, will not be sufficiently developed by the end of this decade, and will take three to four decades or more to propagate to scale.

2) Much of the generation of renewables will be on industrial scale wind, wave  and solar farms (the equivalent of mainframes, if you will) in places of best advantage, for transport to places of greatest need.  Hence, the grid, on some scale, in some configuration, lives. And some power consumers will never have the means to deploy stand-alone renewables without augmentation from the grid.

3) The ultimate system will be a hybrid of distributed and industrial scale generation integrated in a truly intelligent grid because neither option by itself will meet a variety of circumstances than can compromise each.

The Grid is The Net, It will evolve technologically, but it is unlikely to be replaced.  The fact that phone companies are seeking to dis-own their land lines as subscription declines is not the death of the telephone network; it is simply moving to wireless technology, but it is still a centrally managed and financed network.

What is disconcerting in this nonsensical rumination about the inevitable death of The Grid is that it distracts us from the real issues affecting the grid and its constituent utilities:  an orderly technological,  financial and regulatory transition to a differently configured and operational reality.

The notion of ‘going off the grid’ for most of us is more a fantasy than a future.  For those of you with solar panels on your house, ask yourselves: if your system was wiped out by a hurricane, along with many others in your town, how quickly would you be able to replace your panels and get back to business?  Alternatively, how long would it take the utility to re-string lines to your house?  Aside from storms, how many office buildings are likely to meet their own needs from home-grown renewable generation any time in the intermediate term future?  Can we get Metro-North to run its trains on anything but industrial grade electric generation in the intermediate term?

And finally, much as many of us would welcome the demise of coal, it is notable that a growing number of thought leaders in the climate change community are becoming resigned to the need for carbon sequestration technology, given the growing consensus that coal will be with us much longer than our fondest hopes would allow, for a variety of reasons.

Among the major concerns that the utilities and everyone else should be concerned about are:

–  resurrection of the grid that is from its current state of decay due to deferred maintenance;

–  armor the grid against cyber-attack or otherwise mitigate the risks of conventional sabotage;

–  armor the grid against probable extremes and transitions in climate;

–  create a grid that is more modular in design and thereby more scalable and adaptable to the various fluctuations in energy generation, distribution and utilization technology and patterns of usage:

–  evolve a more enlightened management capable of managing a more sophisticated grid;

–  evolve a more sophisticated citizenry willing to accept that this is an infrastructure that we will all depend on in varying degrees, and therefore we must all support.

The Grid is not dead or at death’s doorstep.

But we must not let it linger in agony, or its agony will be our own.

Onward.

20140427

 

 

Triangulating the Flood Insurance Vortex

“For we are all, like swimmers in the sea,

Poised on the top of a huge wave of fate,

Which hangs uncertain to which side to fall,

And whether it will heave us up to land,

Or whether it will roll us out to sea,

We know not, and no search will make us know,

Only the event will teach us in it’s hour.”

Mathew Arnold, Sohrab and Rustum

    The above quote came to mind as I watched the latest hearing of the Connecticut Legislature’s Task Force on Sea Level Rise and Preserving Long Island Sound, dealing specifically with changes in the Biggert-Waters Flood Insurance Reform Act and its collateral damage to shoreline real estate. Yes, I’m referring to Biggert Waters, not Storm Sandy.

    The Task Force, under the leadership of Rep. James Albis, has done a commendable and thorough job to date striving to understand the environmental and economic challenges facing the Connecticut shoreline, and hearing from as diverse a collection of stakeholders as possible.  The January 15th hearing endeavored to get a handle on one of the most challenging issues in the portfolio: flood insurance.  Much useful perspective was gathered, but through it all was a thread of magical thinking that somehow the Private Sector might intervene to make this all…better…if not good.

    Not.

    The hearing began with a presentation by George Bradner, Director of the Property and Casualty Division of the Connecticut Insurance Department,  providing a summary of Biggert Waters provisions and a review of insurance loss history over the past forty years.

    He noted that since 1978, $468 million in flood insurance premiums were collected in Connecticut, against which $484 million in claims have been filed, resulting in a loss ratio of 103% for the period.  But if you take out Sandy’s contribution of $244 million in claims, the loss ratio improves to 54%, and might attract private sector insurers.

    …or gamblers posing as insurers who believe that Sandy was a one-off.

    As Mr. Bradner correctly notes, insurers must make money over the long-term in order to absorb those infrequent but catastrophic events that are an inherent part of the insurance industry’s raison d’etre.  But it has been precisely those events that have caused insurers to retreat to safer grounds in other property and casualty lines outside of flood insurance.  So why are he and others at the hearing hopeful that the private sector can be seduced into filling the coverage gap, or the affordability gap?

    Well, because a couple of firms in Florida and Connecticut and other states in the Excess and Surplus markets have tip-toed into the flood insurance market to compete with our favorite Uncle.  But, as Representative Rosa DeLauro’s representative, Lou Mangini, noted, persons who sign on to such policies face exposure to much higher rates if the private underwriter later chooses to bail, and forces them to go back to NFIP as the insurer of last resort, which is what the government is and does.

    So, if I may translate this into the vernacular, There is no free lunch, but we’re still looking and praying.  We have potentially lucrative insurance markets that should be of interest to the private sector if we can convince them to ignore the infrequent catastrophic losses that will wipe out their better days.  After all, one bad season in thirty-six years ain’t so bad.

    But what if the next one comes sooner?

    Again, as Mr. Mangini points out, the National Flood Insurance Program was solvent as of 2004, but from then until 2011 it racked up $18 billion in debt…..before Sandy.  So, what lesson on the cyclicality of catastrophic loss should the private sector draw from recent history in contemplating its future?

    I suspect that the private sector insurance industry will approach flood insurance as it has managed health care.  It will cherry-pick the best risks, weed out or abandon the worst, and leave them to the tender mercies of the NFIP and the US taxpayer, who is becoming increasingly unsympathetic in the face of multiple collateral challenges. Following a ‘greater fool than I’ meme so typical in business, the individual players in the insurance industry will collectively contract their market and concentrate their book of risks,…to their detriment. And ours.

    That gets us back to affordability and what I referred to as Darwinian Economic Displacement in a prior post.  If there is no free lunch, and no private sector sugar daddy, then a lot of folks on the shoreline will find themselves under water, physically and fiscally. One of the functions of insurance is to spread risk not only for themselves but their insureds, and to provide financial liquidity in times of crisis through timely and substantive settlement of claims. But a number of participants, most notably First Selectman Michael Tetreau of Fairfield, noted that it was not merely a case of funding the coverage, but making the mechanisms of claim processing and reconstruction responsive to need.  Indeed, Sandy has reminded us that Best intentions are too often not followed by best performance, creating an endurance contest between insured and insurers as challenging as between the insured and the storm itself.

    Michael Barbaro, representing the Connecticut real estate industry, but speaking from his own personal professional experience, noted that Biggert-Waters has cast a pall over any shoreline property within flood zones and potentially subject to flood insurance. To a separate comment by Mr. Mangini that the 23 bills currently before Congress are at best short-to-intermediate term solutions, and a long-term solution is not likely for four years at the earliest, Mr. Barbaro stated that such uncertainty for so long will only do further damage to an already fragile market, and by extension to municipal tax bases dependent on that market.

    One might infer from that comment that if only the situation of flood insurance can be made more amenable to our wishes and means, things would settle back a little closer to normal.  But that ignores the other shoe waiting to fall: what are Mother Nature’s intentions?  (My working hypothesis:  Mother Nature is a centipede and she’s wearing combat boots.  Just my opinion.  I could be wrong.)

    One of the problems with the premise that modifying Biggert-Waters to our wishes will re-set the clock to better days is this:  neither FEMA, nor the NFIP, nor the retail insurance industry are forward looking in their risk assessments.  They are fighting the last war. They are looking backward at historical loss data, and not looking forward at possible future trends which may depart materially from recent and long term history.  If future events unfold as scientists suggest, both the footprint and financial impact of future storms could escalate significantly.  Translation:  even today’s premiums may prove insufficient in such event, and much more property could be affected than is presently designated.  And, in certain cases, raising structures will prove irrelevant, and a fool’s errand in hindsight.

    Among the many pointed observations in this discussion were those offered by Mac McCleary of Connecticut’s Department of Energy and Environmental Protection. He offered that, whatever the defects and imperfections of Biggert-Waters, we would be well advised to view it as the harbinger of things to come, and prepare ourselves.  He further urged the chair to engage the reinsurance industry and Connecticut’s wealth of risk assessment expertise to better assess what lies ahead for us.

    Mr. McCleary, who is among the more pragmatic executives in the agency, noted that the agency is aggressively studying all suggested avenues of addressing risk exposure and loss remediation; even the half-baked-not-ready-for-prime-time possibilities, because there are no easy, obvious solutions to the multitude of thorny issues confronting us.  In other words, to borrow an oft used and overused phrase: ‘no low-hanging fruit’.  True statement.

    Among the half-baked ideas that are still in the oven and rising is a plan to fund proactive efforts at risk mitigation for home owners and businesses: a $2 million fund intended to provide up to $300,000 per applicant to raise structures or otherwise mitigate risks from storm surge before the fact. A commendable concept, and worthy of expansion. But at $60,000 to $100,000 on average to raise a shoreline residence, the current state funded program would touch at most thirty homes. Milford had eight times that number that might have benefited from the program before Sandy, and many more that survived Sandy, but could become the next debris field with the Son of Sandy.  The hope, again, is that the private sector (banks, mortgage companies, insurers) can be induced to join the fund in their enlightened self-interest, expanding its reach and impact. Keep hope alive.

    But even Mr. McCleary, the pragmatist, spoke to the hope that the insurance industry might find ‘arbitrage opportunities’ in the market that will invite them in. I would suggest that such opportunities, if they are taken, will be interim advantages to the industry, but of little long-term benefit to property owners and mortgage companies and communities in the long-term in extending coverage or making it more affordable.

    *   *   *

    A few observations on the insurance industry.

    Most people think of the insurance industry as being in the business of providing risk underwriting and loss financing  (claim settlement) services.  Not true.  Insurance services are a front for the primary business of insurance companies: investing the premiums that are generated. It’s not about risk; it’s about positive cash flow and net return. The P&C business in particular has been historically cyclical, riding the waves of the economy and, yes, environmental cycles of loss that have substantial historical precedent, and therefore a degree of predictability.  In fact, many P&C insurers routinely run a modest loss on the underwriting side of the house, but make it up on the investment side of the house, and therefore acquit themselves for the year with a net profit that their shareholders consider acceptable.

    And what do insurers invest in?  Real Estate, like Miami condos, and Kansas farm land and petrochemical infrastructure, and capital plants in Bangkok, and stocks and bonds of various blue-chips like utilities and agribusiness and home builders and municipalities and all sorts of enterprises whose performance is ultimately dependent upon—the environment. They do so successfully  by carefully understanding and balancing HISTORICAL underwriting and economic (investment) cycles, balancing and diversifying their portfolios of underwriting and investment risk in order to dodge, or significantly mitigate, the BIG HIT that could render their corporate logo an artifact in the Corporate Hall of Fame.

    The retail insurers, the Travelers and Cignas and All States and State Farms and other street level purveyors of protection, do have a card up their corporate sleeves: reinsurance through such global firms as Swiss Re and Munich Re and the like. The retail insurance trade ‘re-insures’ the policies the retailers sell the public to further dilute the risk they hold on their books. The re-insurers further spread their assumed risks among themselves so that no one of them is left (hopefully, fingers and toes crossed) holding the whole bag of a catastrophic loss, like maybe Fukushima?

    In the past ten years of my observation, and probably longer, there has been an interesting divergence of perspective on the subject of environmental (climate change and other) issues. For the most part, the retailers have continued to perceive  the CC issues as no different from traditional hazards, and within the competence of their history-oriented statistical tools.  The reinsurance industry? Not so sure.  ‘We’re gonna need a better business model!’

    Because of their global reach and global exposure, and because they backstop their little brothers and sisters of the street trade, reinsurers must take a particularly long long-term perspective, and with good reason.  It’s o.k. if Bangkok and much of southeast Asia is getting whacked in a particular year as long as North America and Europe and most other parts of the world are doing business as usual, including paying premiums.  But what if the whole world is going toastados at once, And it’s not a cycle, but a trend?

    Hence, the reinsurance industry’s quiet but substantive presence in the study of climate change in recent decades, and with good reason. Because reinsurers have global reach, they have global exposure.  They, like their little brothers and sisters of the retail street trade, must have deep pockets to endure infrequent but catastrophic losses. Because, unlike their little brothers and sisters, there is no backstop for the reinsurers, except the government, maybe.  (AIG, The Sequel?)

    I don’t believe the reinsurance community shares the view of their retail brothers and sisters that it’s just another day in underwriting paradise.  But they have been discrete and circumspect in expressing their views on climate change to date, even as they study it aggressively.  At some point, they will make their views explicit in underwriting standards and rates, and their little brothers and sisters of the street trade will be forced to pay attention, as will we all.  Economic gravity, trickle-down if you will, does work.  Selectively.

    This is why Mac McCleary is right about the Cassandra effect of Biggert-Waters, and overly optimistic about the potential of the private insurance industry to play the role of the cavalry.  The private insurance industry will cherry pick its risks and retreat when necessary. At best, it may be the front-end servicer of government-insurer-of-last resort programs, as it currently is for NFIP.  But in the intermediate to long-term, the private sector will not add capacity, and will not reduce rates.  Because it can’t.  At best, it will stimulate economic prioritization of private sector decision-making in defining the risk-reward prospects of personal and commercial investment–Darwinian Economic Displacement.

    *  *  *

    As for me, I’ve defined my own personal benchmark for determining when the retail insurance industry and the rest of the FIRE (Finance, Insurance, Real Estate) industry encounter a come-to-reality moment.

    There is a distinction that still is not appreciated between properties that are subject to periodic storm flooding, and those that are subject to eventual and permanent routine daily inundation from sea level rise.  Intermittent storm flooding may remain insurable for some at some price.  But, as I have previously noted, routine inundation probably is not, according to the norms of insurance underwriting (possibility of loss is insurable; certainty of loss is not).  However, there is a window of opportunity for insurers relative to properties subject to ultimate inundation in twenty to fifty years.  It is conceivable that insurers might write policies (at some price) to protect such properties, and their collateral loans, from premature compromise by sea level rise ahead of projections.

    Such a policy would be significant in two respects:

    –  It would evidence the insurance industry’s acceptance of climate change and a phenomenon (in sea level rise) the consequences of which it has yet to address to my knowledge.

    –  It will put a time-line to its critical impact, a prerequisite for underwriting the risk.

    With the introduction of such a policy, sea level rise and climate change more generally will have transcended the debate of passionate lunies on the left and right, and will be ratified by the most staid of Establishment institutions.

    End-game of debate.  As for evolving reality, the beat goes on.

    Meanwhile, good luck riding the wave, Dude.

    Onward.

    20140216