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Thursday, 17 October 2013 06:57

Wake Up, Rich People: The Wealthy Will Lose Money Betting Against Global Warming

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JACQUELINE MARCUS FOR BUZZFLASH AT TRUTHOUT

SandyDamageThere is a lot of discussion about how victims of poverty will get hit the hardest from climate change disasters, but how will radical climate changes impact world economies, and the wealthiest members of society?

The consequences have proven that the poor suffer dramatically more from climate change disasters than the rich, but prosperous businesses are also being severely challenged and impacted. No industry falls alone. In the financial markets, everything is interconnected. Climate change is having a crippling ripple effect across global economies.

Consider Fukushima. It can be scientifically argued that climate change played a role in creating the “extreme conditions” of a record breaking 9.0 magnitude earthquake followed by a massive tsunami that led to the ongoing emergency crisis at Japan’s Fukushima Nuclear Power Plant. The released radiation into the Pacific Ocean and the atmosphere threatens the world as we confront an insolvable nuclear meltdown with no end in sight. We now know that we cannot rely on nuclear power after Fukushima. Due to the high levels of radiation, most of the agricultural region surrounding Fukushima have been reduced to ghost towns. Japan’s fishing industry has lost billions of dollars from the spilled radiation that has spread as far as California. Take a look at these photos for a close up view of Japan’s decimated economy. Global warming does not spare the rich. Everyone on the ship goes down.

The combination of diminishing fossil fuels and the escalation of global warming spells economic havoc complicated by the fact that the US federal government has done little if nothing to prepare for climate change catastrophes and power outages. Why? The US government is practically owned by the fossil fuel industry. Big Oil pays for campaigns across the aisles on both sides, Republicans take more money than Democrats, but dirty energy money flows heavily through both Houses. Congress has taken over $54 million from the fossil fuel industry that is the driving force behind the carbon emissions that cause climate change. 

Why the Rich Should Be Worried About Climate Change

Wealthy investors will be hit hard by global warming. It’s inevitable that billion dollar businesses will, if they haven’t already, encounter vast losses of income given the range of investments affected by climate impacts in agriculture, fishing industries, tourism, real estate, insurance, and much more.  

Global warming does not discriminate between the rich and those who are struggling to make ends meet. Global warming doesn’t take bribes for favors or protection. Global warming trumps politics. There is nothing liberal or conservative about rising sea levels, floods and cruel droughts. A hurricane of global warming force has the power to flatten cities like war zones.

At the time of writing this piece, tropical cyclone “Phailin” maintained Category 5 strength off the coast of India. Thousands of people are marooned by floods. A typhoon has left 17 people dead in Tokyo, Japan. And more than 100 people are dead from an earthquake in the Philippines after a magnitude of 7.1. Physically brutal, global warming disasters can just as easily snap a $90 million dollar yacht apart like a toothpick in tidal surge storms as it can an old weathered shack. It can rip through mansions and trailer parks alike. It can leave millions of people stranded, homeless and literally powerless for weeks. Ask the victims of Sandy residing off Long Island:

Three large sections of the boardwalk were lifted and smashed. The street had become a four-foot-deep river, as wave after wave poured water onto the peninsula. Cars began to float in the churning water, their wailing alarms adding to the cacophony of wind, rushing water, and cracking wood. A bobbing red Mini Cooper, its headlights flashing, became wedged against one of the pine trees in the front yard. To the west the sky lit up with what looked like fireworks—electrical transformers were exploding in Breezy Point, a neighborhood near the tip of the peninsula. More than one hundred homes there burned to the ground that night.

“A profoundly altered planet is what our fossil-fuel-driven civilization is creating,” wrote Tim Folger in his report, Rising Seas, “a planet where Sandy-scale flooding will become more common and more destructive for the world’s coastal cities. By releasing carbon dioxide and other heat-trapping gases into the atmosphere, we have warmed the Earth by more than a full degree Fahrenheit over the past century and raised sea level by about eight inches. Even if we stopped burning all fossil fuels tomorrow, the existing greenhouse gases would continue to warm the Earth for centuries. We have irreversibly committed future generations to a hotter world and rising seas.”

Trillions of Dollars in Real Estate May Disappear With Climate Change

The wealthy can wave goodbye to their tropical island paradises and their secluded seashore mansions as they begin to vanish under rising sea levels in the next decade or two. Consider Florida’s near future:  “By century's end,” wrote Jeff Goodell, environmental reporter for Rolling Stone, “rising sea levels will turn the nation's urban fantasyland into an American Atlantis. But long before the city is completely underwater, chaos will begin.” 

Perpetual floods, droughts and extreme calamities are a wrecking ball to U.S. and global economies due to energy blackouts, and massive infrastructure damage. Millions of dollars are lost in a single day without electricity.

Katrina, Irene, Sandy and the recent Colorado floods (oil and gas spills) and wildfires cost the U.S. billions of dollars from infrastructure damages.  And that’s only from a single degree temperature rise; imagine 9 degrees Fahrenheit.  The scientific evidence is dire, according to IPCC’s Fifth Assessment Report, a group of international scientists associated with the Intergovernmental Panel on Climate Change.

Coastal cities are particularly vulnerable.  Unchecked climate change could saddle taxpayers, businesses, and state and local governments on the East Coast with hundreds of billions of dollars in damages, according to a new report released by the Union of Concerned Scientists (UCS). The report, Climate Change in the United States: The Prohibitive Costs of Inaction, is an overview of more than 60 studies analyzing the potential financial toll of global warming if we fail to dramatically curb emissions. The costs are largely due to rising sea levels, more intense hurricanes, flooding, declining public health, strained energy and water resources, and impaired transportation infrastructure.

Droughts: Agriculture, Ranches Impacted by Climate Change

In a recent report published in USA Today, “A comprehensive USDA study concludes rising temperatures could cost farmers millions as they battle new pests, faster weed growth and get smaller yields as climate change continues.” 

In other words, greenhouse emissions are wiping out our agricultural businesses due to severe droughts. 

Texas serves as an example of what’s happening to agricultural lands, ranches, fruit orchards, corn crops and farms across the western states from global warming droughts: 

Drought for the city dweller may mean inconvenience,” explained Hilary Hylton in her Time Magazine assessment, “but for Texas' rural residents it has been devastating.” The Great Dry State of Texas: The Drought That Wouldn't Leave Has Lone Star Farmers Scared

The long term droughts may be the costliest in Texas history for agriculture and may have repercussions well beyond the state's borders, Mark Welch, an economist with the Texas AgriLife Extension Service, told the Jacksonville Daily Progress in East Texas.

"It's a 3, 4, 5 billion-dollar impact right now, just in Texas," Welch said. "This is a big deal."

In South Dakota, ranchers experience a different kind of nightmarish climate extreme disaster from an early brutal snowstorm.  Cattle ranchers’ herds were devastated by a historic early blizzard this month. The storm blasted western South Dakota with 70-mile-an-hour winds and more than three feet of snow. The cattle had yet to grow their winter coats. As many as 100,000 died of hypothermia, drowning and other causes. The exact number of deaths is unknown; the federal agency tasked with tallying them is currently shut down.

Climate Change Will Cause Huge Insurance Company Losses

“Failure to plan for the effects of climate change might challenge the stability of one of the largest sectors of the world economy,” said Mindy Lubber, the president of the sustainability nonprofit organization Ceres, which authored a report that looks at insurers in three states. The insurance industry is ill-prepared to handle climate change-related disasters, regulators and industry watchers warned, saying the business hasn’t evolved enough in the face of rising sea levels and extreme weather fueled by climate change.  (Read the full article here at McClatchy Newspaper). 

The number of homes at risk from wildfires in western U.S. states jumped 62 percent in the past year as more properties were developed in fire-prone areas. 

How can insurance companies possibly cover climate of mass destruction episodes over and over again?  They can’t.

Tourism Devastated by Climate Change

Luxury resorts will certainly be impacted financially from climate change: “Imagine a ski resort whose chairlifts are in the lower reaches of mountains, without decent snow,” wrote business reporter, Elizabeth Rosenthal of the NY Times. “Or a scuba club whose reefs succumbed to warmer and stormier seas. Or a golfing resort in a district where water shortages made it impossible to keep fairways green. All are real possibilities, industry experts say, and in fact, early effects are already being felt.”

The Collapse of a Fossil Fuel Economy

It’s unrealistic for the affluent to believe they can prosper from a fossil fuel economy when atmospheric levels of carbon dioxide reached 400 parts per million for the first time in over 2.5 million years. The International Energy Agency reports that earth is rapidly moving towards an increase of 9 degrees Fahrenheit under the business as usual status quo. Executive Director Maria van der Hoeven said that if we continue to ignore the evidence, it will have “potentially disastrous implications in terms of extreme weather events, rising sea levels, and the huge economic and social costs that these can bring.”

In fact, merely delaying action until 2020 will have a staggering net cost of $3.5 trillion.

That $3.5 trillion is going to burn deep pollution holes in a lot of big fat bank accounts. 

Currently, dirty energy is making a minority of fossil fuel investors rich, but given the fact that oil and coal are limited resources coupled with the reality that burning fossil fuels is the cause of climate change impacts—that combination spells disaster for the economy and bankruptcy for those heavily invested in dirty energy sources.  It’s like placing your bets-fortune on a victorious champion racehorse that is now retired; nevertheless, Wall Street investors still and stupidly insist that the reputation of that horse alone is enough to go on.  Oil exploration reached its highest production in the 1970s, since 1980, it’s been on the decline.  Oil is being consumed four times faster than it is being discovered. No matter how you toss it, it’s a losing bet that’s going to take the Mighty down.

Some Solutions

We can’t drill our way out of this”—said Senator John Kerry, nor can we frack our way out. But we can begin to light up our homes with solar, sustainable and clean energy. We have no other choice.  The University of Hawaii team of scientists concluded that “A business-as-usual scenario in which emissions continue on their current upward trajectory would see an unprecedented climate within this decade.”

● The most affluent members of society have the power and financial means to curb greenhouse emissions if not for the planet’s sake – for their own self preservation by applying pressure on their representatives to lower CO2 emissions, and by setting an example of changing their own energy consuming lifestyles to an oil-free standard of living. 

● Governors need to take a few lessons from California’s Governor Jerry Brown who is leading the way to building a renewable energy state.  To recap Tim Dickinson’s Rolling Stone piece on Gov Jerry Brown: “In 2011, Brown signed a law requiring California to generate one-third of its power from renewable sources by 2020 – including the target of 1 million solar rooftops.  He’s mandated that 15 percent of cars sold in California by 2025 be electric which will have a huge influence nationwide given that California has the largest auto market in the country.  Brown’s practice of fiscal restraint and innovative investments has enabled him to use the 2009 stimulus funds to build a high-speed rail.”  Read more about Gov Jerry Brown’s achievements here.  A leading climate scientist called Jerry Brown an “American hero”.  

● European countries are moving towards “fossil fuel free” economies, proving to the world that it can be done.  France, Holland, Switzerland and Germany are turning to solar and wind for the primary production of energy, but Sweden is the big winner:  According to a report in the Guardian: “Sweden is to take the biggest energy step of any advanced western economy by weaning itself off fossil fuels completely within 6 years without building a new generation of nuclear power stations. The attempt by the country of 9 million people to become the world's first practically oil-free economy is being planned by a committee of industrialists, academics, farmers, car makers, civil servants and others, who will report to parliament in several months.”

Sweden is the role model for the world, ASAP, country by country, city by city, state by state.  Meanwhile, global warming waits for no one—not even the rich. 

(Photo: Proud Novice)

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Jacqueline Marcus is the editor of ForPoetry.com and EnvironmentalPress.com. Author of Close to the Shore by Michigan State University Press. Her E-book Man Cannot Live on Oil, Alone / Time to end our dependency on oil before it ends usis available at Amazon.com Kindle Books.