And I don't know if "tax payers" can be called on to share the risk. Especially in the United States, where individual states are becoming the insurers of last resort, state governments are faced with the same fiscal realities as insurers. This isn't something you can MMT out of either, not when the expenditure is economically insolvent, not when extreme weather is tearing apart existing productive capacity.
The most difficult question to ask is if the rate of natural disaster is financially or economically solvent. That's a very complicated question to answer. It depends on a lot of factors like land use profiles. With the scientific realization that natural habitats are responsible for 30% more carbon processing than had previously been thought of, their importance to regional climate and weather has been underrated (read ignored).
In the 70s, land use was understood to be the second leg of climate change. It is an artifact of the confrontation between CO2, climate modelers, environmentalists, and the oil industry that that land use has fallen off the table. Politicians won't talk down development projects..
I think only RockStröm regularly speaks on the topic of land use.
The world's biomes have been torn apart, and everywhere this is evident from the plumbing insect and wildlife populations to the inability the growing in ability of natural habitat to recycle nutrients, sequester carbon and water.
Thanks for this concise but powerful post, Ann! I recall being asked to speak a decade ago to a small international seminar in BC. I spoke on the climate crisis from a community economic development - solidarity economy perspective, particularly because of a book I co-wrote with Pat Conaty, whom you have met. (The Resilience Imperative: Cooperative Transitions to a Steady State Economy) An Australian insurance group financed the whole thing. This was 15 years ago or so. It is pretty terrifying to reflect on the implications of non-insurability. What other ways might we imagine protecting each other, or in our societies, if there are any: this is a question I have no idea about.
Communities that take care of their watershed, of their regional biomes are the ones that mitigate the damage of extreme weather. They also restore the office fertility of their region. The most urgent task every community has before is to restore the ecosystems around them to integrate their communities into the local ecology to get rid of car, dependency and restore, small scale, multi crop agriculture recycles waste back into the landscape. This is how the natural rule works. It's why it's so amazingly efficient and abundant. Mankind evolved to be a keystone species. The so-called natural world, the forests of North America and even of South America are being shown to have been shaped by first nations. Human communities have the capacity to relearn what was done in the past in order to reap the benefits of working with the natural world rather depleting and paving it over.
Regional biomes are responsible for region regional weather conditions, most significantly regional hydrology.
Land use is climate change. Kill the land, kill the climate. Each community that restores the land stands a chance.
"the forests of North America and even of South America are being shown to have been shaped by first nations", likewise much of Northern Europe, particularly the British Isles, where mankind was an active participant in shaping the living landscape from 'day one' as it emerged from beneath the ice-sheet of the Last Glacial Maximum 27k-11.3k ybp.
I am not certain, but I think there's another area of risk insurers are exposed to. They invest in mortgage backed securities. Now I am not such a student of these instruments, but it seems to me that if there's a debt deflation spiral, that they investments could go pear shaped, if I am using the idiom correctly.
It's a little incredible that the insurance companies are relying on the frothy valuation of housing their own policies enable. One reason they are in such economic trouble is that the cost of replacing a destroyed building is insanely high because of the deliberate pricing inflation built into modern mortgage structures.
The US housing market was engineered to deliberately inflate the price of housing in the wake of World War II in order to finance the transition from wartime to peace time industry. When it's married to the financially insolvent nature of suburbia, a pillar of the US economy is little better than a Ponzi scheme. Without the secondary insurance market, the federal government buying mortgages off of banks, they would not be in a position to extend the mortgage terms standard today (30 years, 20 or 10 or 5 or nothing down).
Before the great depression banks offered five year loans with 50% down and a balloon payment at the end. It's that balloon payment in the midst and economic downturn that led individuals to default on their home loans.
Because housing inflation is seen as a good thing, appreciation is seen as a good thing for a basic necessity, and the magic of compound interest, we now have loan sizes and reconstruction costs that have outstrip the real growth possible in the economy. And because the price of housing has outstripped wages held down for decades, plus the demographic squeeze in the weight of 2008, which by the way is going to devastate colleges across the United States, but that's another story, to who is a financial sector, and the insurance sector going to turn to in the next decade or so? Even without the climate crisis, and a broligarch coup, demographics would spell deep trouble for the American economy. Unless, of course, we let loads of people in.
I don't think any science fiction writer could make this sh*t up.
Discerning any way of addressing this is dubious. The diversity of balance sheets that play into the calculation is a fascinating and terrifying frame for considering the implications of collapse
And I don't know if "tax payers" can be called on to share the risk. Especially in the United States, where individual states are becoming the insurers of last resort, state governments are faced with the same fiscal realities as insurers. This isn't something you can MMT out of either, not when the expenditure is economically insolvent, not when extreme weather is tearing apart existing productive capacity.
The most difficult question to ask is if the rate of natural disaster is financially or economically solvent. That's a very complicated question to answer. It depends on a lot of factors like land use profiles. With the scientific realization that natural habitats are responsible for 30% more carbon processing than had previously been thought of, their importance to regional climate and weather has been underrated (read ignored).
In the 70s, land use was understood to be the second leg of climate change. It is an artifact of the confrontation between CO2, climate modelers, environmentalists, and the oil industry that that land use has fallen off the table. Politicians won't talk down development projects..
I think only RockStröm regularly speaks on the topic of land use.
The world's biomes have been torn apart, and everywhere this is evident from the plumbing insect and wildlife populations to the inability the growing in ability of natural habitat to recycle nutrients, sequester carbon and water.
Thanks for this concise but powerful post, Ann! I recall being asked to speak a decade ago to a small international seminar in BC. I spoke on the climate crisis from a community economic development - solidarity economy perspective, particularly because of a book I co-wrote with Pat Conaty, whom you have met. (The Resilience Imperative: Cooperative Transitions to a Steady State Economy) An Australian insurance group financed the whole thing. This was 15 years ago or so. It is pretty terrifying to reflect on the implications of non-insurability. What other ways might we imagine protecting each other, or in our societies, if there are any: this is a question I have no idea about.
Communities that take care of their watershed, of their regional biomes are the ones that mitigate the damage of extreme weather. They also restore the office fertility of their region. The most urgent task every community has before is to restore the ecosystems around them to integrate their communities into the local ecology to get rid of car, dependency and restore, small scale, multi crop agriculture recycles waste back into the landscape. This is how the natural rule works. It's why it's so amazingly efficient and abundant. Mankind evolved to be a keystone species. The so-called natural world, the forests of North America and even of South America are being shown to have been shaped by first nations. Human communities have the capacity to relearn what was done in the past in order to reap the benefits of working with the natural world rather depleting and paving it over.
Regional biomes are responsible for region regional weather conditions, most significantly regional hydrology.
Land use is climate change. Kill the land, kill the climate. Each community that restores the land stands a chance.
"the forests of North America and even of South America are being shown to have been shaped by first nations", likewise much of Northern Europe, particularly the British Isles, where mankind was an active participant in shaping the living landscape from 'day one' as it emerged from beneath the ice-sheet of the Last Glacial Maximum 27k-11.3k ybp.
It is said that the essence of a Zen garden is that everywhere the hand of man is evident but nowhere apparent.
An interesting pair of posts, useful for students of geographical hazards. Can I also thank you for your recommendation of my own Substack?
Hmm. Was artificially inflating house prices (in lieu of wage rises) a wise move?
I am not certain, but I think there's another area of risk insurers are exposed to. They invest in mortgage backed securities. Now I am not such a student of these instruments, but it seems to me that if there's a debt deflation spiral, that they investments could go pear shaped, if I am using the idiom correctly.
It's a little incredible that the insurance companies are relying on the frothy valuation of housing their own policies enable. One reason they are in such economic trouble is that the cost of replacing a destroyed building is insanely high because of the deliberate pricing inflation built into modern mortgage structures.
The US housing market was engineered to deliberately inflate the price of housing in the wake of World War II in order to finance the transition from wartime to peace time industry. When it's married to the financially insolvent nature of suburbia, a pillar of the US economy is little better than a Ponzi scheme. Without the secondary insurance market, the federal government buying mortgages off of banks, they would not be in a position to extend the mortgage terms standard today (30 years, 20 or 10 or 5 or nothing down).
Before the great depression banks offered five year loans with 50% down and a balloon payment at the end. It's that balloon payment in the midst and economic downturn that led individuals to default on their home loans.
Because housing inflation is seen as a good thing, appreciation is seen as a good thing for a basic necessity, and the magic of compound interest, we now have loan sizes and reconstruction costs that have outstrip the real growth possible in the economy. And because the price of housing has outstripped wages held down for decades, plus the demographic squeeze in the weight of 2008, which by the way is going to devastate colleges across the United States, but that's another story, to who is a financial sector, and the insurance sector going to turn to in the next decade or so? Even without the climate crisis, and a broligarch coup, demographics would spell deep trouble for the American economy. Unless, of course, we let loads of people in.
I don't think any science fiction writer could make this sh*t up.
Discerning any way of addressing this is dubious. The diversity of balance sheets that play into the calculation is a fascinating and terrifying frame for considering the implications of collapse