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The spiralling cost of insuring against climate disasters – rising home premiums are a de facto ‘carbon price’ on consumers as extreme weather events become more frequent
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- Title
- The spiralling cost of insuring against climate disasters
Question for Tildes:
What areas of Continental US and Canada are relatively safe from effects of climate change? Relatively: as in, we'll live with the changes and they're moderately easy and cheap to overcome.
Draughts, floods, wild fires, bigger hurricanes, Atlantic current collapse, rising sea levels....what else am I forgetting?
For humans looking back from 2100, which area would they wish their great grand parents (us) had bought some land?
The exciting thing is that we just don't know! We keep finding new secondary effects of climate change that keep surprising us and it's so fun!
Oh boy!! What a time to be alive!!
This seems like a total no brainer. For areas that are like, negative one meter from sea level, it seems obvious to completely stop granting new building permits. But that will probably have some kind of horrifying real estate value shock to long term holding investors and current land owners: how can they sell their million dollar condos if news gets out that they're going to be underwater (global news) soon? The city wants its insane property taxes never to come down because while it's not underwater the city costs a lot to run.
It's sadly hilarious that us Hong Kongers ran away to Richmond en masse (tyee), during the gold rush, then again in the 80-90s, and again just now, and both cities will be under water so soon.
Except, as the global article says, the rising tides will be held back by billions upon billions of dollars.
So I guess the only climate safe places are where wealth concentrates, because only capital protects capital.
That does not matter because wealth is concentrated in places where it was safe for wealth to concentrate. Sure, you can spend billions protecting Richmond from sea level rise, but you can't protect from the effects of some ocean current stopping and totally changing the climate in unpredictable ways. Sea walls won't stop Stockholm from having the same climate as Arviat, NU, for example.
See, I kept thinking that too, but people kept putting money into Richmond. It makes no sense, absolutely none. that entire city's land is going to liquify in the Really Big One even if it somehow gets dammed and leevied to heck.
Maybe individual super rich have smart money managers, but a whole swarth of medium-wealthy people who just want to live near dim-sum, sky train, be in a warm climate are collectively very dumb.
It's like, throwing money at a Roulette is folly, but if number 25 has been called nonstop for 30 years, suddenly it becomes investment rather than gambling?
And then when disaster strikes, they're more likely to get bailed out than the poor Nova Scotians on that marsh plain because they're richer. Hence my wealth becomes safe sentiments
I'm betting on the Great Lakes region. Tons of fresh water, arable land, plenty of space, and tornados don't typically come so far north and east (although this is changing as well). Protected from hurricanes by the Appalachians. The only major threat would be flooding due to more severe storms.
So cities like Toronto, Buffalo, Cleveland, Detroit, Chicago, and Minneapolis will end up being the most resilient.
I grew up in the Cleveland area and tornados were not remotely uncommon. We had a tornado season and had tornado drills in school. Tornados are relatively common in that region, they're just not as common as they are in tornado alley proper. And as far as natural disasters go, I'd take tornados over most other options if pressed -- they don't really harm the whole city at once in the same way as most natural disasters, and your odds of being personally affected are quite low.
I grew up near Akron. Yes, we had drills and the occasional Watch or Warning. I don't remember there really being a "season" per se. But in the rare case one actually touched down it was always short-lived and never more than EF1, with minor damage to a handful of buildings caused by tree limbs and such – nothing like the devastation you get in Kansas and Oklahoma. That's why I used the word "typically."
Like I said, the frequency and severity in these areas will certainly increase as the planet warms. But I agree with you regarding the risk; it tends to be localized and some folks just get unlucky. Fortunately most homes in Northeast Ohio already have basements and that's the main thing you need to protect life in a tornado (property is a different story).
I definitely remember having a tornado season, particularly one in late summer that corresponded with thunderstorm season. The thunderstorms were more likely to cause disruption than the tornados by a pretty big margin, but if the sky turned orangey-yellow we'd go hide in the basement, especially if there wasn't rain to go with it. But I think the actual tornados more often touched down in the lake than anywhere else.
That is, until the snakehead fish take over.
Damned snakeheads and their air breathing lungs *shakes fist
This one time,
at band campin a BC city lake, they found a released snake head, and they had to drain the entire lake to capture it.Maybe all that pollution in them great lakes is still keeping invasive fresh water fish at bay. Yuck.
I've thought about this question a lot, and my opinion might be somewhat controversial. However, based in part on data and modeling like this in my opinion one promising location will be the Great Lakes region (similar to what @wowbagger mentions below). However, also in my opinion this comes with some important caveats: ideally on the east side of them, between 5 and 100 miles from the coast, and more than 60 vertical feet from the nearest stream or water source. In other words, no lakefront property, no stream running past your front door or past the bottom of the steep hill on which your house sits. Bonus points if you have a small old growth wood lot on your property with a clear-ish view of the southern sky.
My rationale is as follows:
If you want me to pick an actual location that kinda demonstrates my opinion's actual geographic location, I would draw a line through New York State from Jamestown to Ithaca to Utica to Tupper Lake, and settle somewhere through there.
Also, as a disclaimer, this is just my opinion. I try to base it on some data, but at the end of the day it's just my own opinion, and I tried to select some real numbers to give my opinion some actual metrics. These things can probably be found elsewhere, and the parameters I picked can probably be relaxed of course.
Finally, to comment on whether I eat my own dogfood: I currently live in north central Maryland, and selected my own home's properties based on my opinion below (and in fact rejected a few good ones when I bought a house several years ago because they didn't meet these criteria). As a disclaimer, I lived for five years in Buffalo and it's my objective to retire there for the reasons I've outlined above. By then, this will matter a whole lot more. The trick is to beat everyone else up there...
While I generally agree with @updawg, My money is on the mid-atlantic region...Pennsylvania, New York, New Jersey, Maryland, Delaware in particular.
The region has always had a good bit of climate chaos, prolonged cold, humid heat, wind, rain, drought.
Especially in PA, there's a lot of forest and hills to mitigate extreme weather events. The utilities are well equipped to manage massive outages due to treefalls.
How far back from the coast on these states do you think would be enough?
PA is far enough in anywhere would be good. If you want urban density, you want Philadelphia or maybe Harrisburg...Pittsburgh is still a bit of a shitshow IMO. Philadelphia is the only one with proper public transport and stuff to do. If you're looking for rural, you can find it pretty easily once you get about 10 miles outside of any major suburb. It's called "Pennsyltucky" for a reason though.
Can't really speak to Maryland or New York as authoritatively, but Maryland is a stone's throw from where I grew up so climate-wise is pretty similar. Western New York is very flat with lots of arable land (provided you avoid the toxic waste sites!), and I'm not really familiar with eastern New York at all.
Jersey and Delaware are iffier. Delaware is just Maryland's hurricane shield, Jersey is PA's. I moved to the Jersey coastal area, to enjoy it while I can. I made sure to pick a spot that won't be underwater till the sea level rises at least 10 feet....I figure there will probably be formal evacuations well before it hits that point. So far the winters have been milder and the air is cleaner than PA's courtesy of having it diluted by the open ocean. My allergies are 10x better, and that's worth the hurricane risk IMO.
I will say the greatest risk to these areas is if the tectonic plates shift...the buildings here are not built to the earthquake standards the west coast is.
The Deleware will rise, though, so some portion of old Philly and burbs along the canal will be underwater I'd think.
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Society Hill and Old City are elevated above the river. Delaware Ave, I-95, and South Philly in general have a higher flood risk. Can't speak much to the northeast. See Philly Flood Map (FEMA direct map: blue is the worst, orange is risky). Not necessarily catastrophic if the city makes some effort in advance.
Fortunately, the city is taking quite a bit of local, state, and federal funding for flood prevention and general water-related matters. The city's Water Revitalization Plan has more information. A certain amount of that is about replacing lead pipes, but also upgrades to pumping stations and wastewater/stormwater systems which would lessen the impacts of flooding when it does occur.
New York City is building more flood prevention infrastructure, taking after the Netherlands (e.g. East Side Coastal Resiliency. The Hudson River is technically an estuary up to Albany/Troy, but there is more tidal influence nearer to Westchester. However, the whole area is generally hilly and so the main piece of infrastructure at risk in that county would be the Amtrak line, plus some luxury riverside condos. See TopoMap. Plenty of stuff could be flooded. But it's not like they would evacuate the county.
Philly doesn't have a grand plan to build green floodplains like New York, but would theoretically have the ability to expand green space near the river, as that land is at least partially industrial or empty.
For the coastal areas you also have added sinking due to a various effects magnifying the effects of sea level rise. East Coast is Sinking
I was recently reading about trying to study the effect of sea level rise disconnecting communities and services from areas well before the land was actually inundated and permanently underwater. Due to flooding during storms cutting off roads etc. This was more focused on rural coastal communities but could impact of where slightly more inland communities can spread towards. I haven’t found the article again yet.
Archive link https://archive.is/uAYNI
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Increases in cost of living are always uncomfortable to experience and witness, especially when they occur suddenly and without leaving people realistic pathways toward alternatives.
But insurance does fundamentally help discourage behaviors that are collectively expensive for society, such as living in high-risk floodplains. It is the private market's solution to a lack of equivalent legislation or de-incentivizing taxes from government. It's kind of clinical and gross to talk about the loss of someone's home this way, but money is just a stand-in for labor. We pretend anything is possible through technology, but labor (even enabled by tech) is finite. So is human willpower. So are humans.
The more equitable solution will always be through government; but our society prioritizes market activity "by default", and government regulation "only when needed." Also, few homeowners would ever agree to a tax or law saying they can't live where they want to live because it's too societally costly (read: too expensive to insure), such as this part of Virginia Beach, and for that reason government involvement to disastrous climate-related personal decisions by its constituents is typically reactive and not proactive.
Some places humans live are probably worth abandoning on a cost basis, like many/most rural (low-density) coastlines at risk of heavy flooding, at least some inhospitable and overpopulated deserts, at least some particularly cold and inhospitable tundras, and other places with difficult geographies. For political reasons, that will never happen voluntarily, but it could happen when forced by the climate itself. Some places are live are probably not worth abandoning given the costs necessary to relocate millions of people (such as Manhattan, or the entire country of the Netherlands). Even disregarding sunk costs of existing infrastructure, relocation on that scale is probably more expensive than government-funded mitigation measures like huge flood barriers and complex drainage systems (which are effectively indirect insurance subsidies). It is worth taking a different approach to this issue in areas in accordance with population density and similar metrics.
I can't quantify damage that results from losing, say, a culture of beachouses in a town, or losing the culture of Manhattan if the whole place were to go underwater. That cultural loss is a real and important effect, if relatively ephemeral. Though I am typically more concerned with measurable quality of life metrics. Culture is a sort of natural byproduct of existing, and endless financial struggle induced by making inefficient decisions about housing is probably worth avoiding in some cases, even if it means upending much of what we know.
I know the US federal government is already relocating some small towns in Alaska for reasons like this. I am sure that is a very emotionally charged process for residents and an unpleasant situation for bureaucrats. It seems to require a lot of cooperation. In the case of the village that article discusses, it was agreed to by vote. I think this would be replicated in other towns where the situation is quite dire, but not in municipalities where there is a disparity in which voters are affected by climate change and which are not, as is the case in many cities (hilly riches, poor floodplains).
Thank you for the insightful comment. I believe you have summed up the difficulties quite well: homes are highly emotional for everyone and we're all having to pay for climate change one way or another, which in America is more market driven because that's the more socially acceptable method.
Thank you for introducing to me the case study of Newtok's managed retreat. I hope more efforts like that happen before it's too late.....
I also learned about managed retreat from your link , and read this one about 140years of retreating many other US communities
https://issues.org/true-stories-managed-retreat-rising-waters-pinter/
Don't know if this was mentioned in the article from the paywall, but some of the rising costs of natural disaster insurance is also due to self inflicted damage. In the case of hurricanes or coastal inland flooding especially, houses on the coast become flooded, estimated for financial settlement and then rebuilt on the same exact plot of land it was just on, even though they know it's estimated to be underwater in the next 3-5 years.
Source: worked for an insurance company for several years as a modeler for hurricane impacts on commercial properties along the Atlantic coast
If people are going to be paying for climate change, they might as well put it on the responsible polluters with an actual carbon price. (Yes, many countries already have one; I'm speaking to the laggards, yes, you, United States, you're the big one.) At least pass the PROVE IT Act and set up a carbon border adjustment for a start so we aren't paying for dirty industry overseas.