Three things crossed my desk this week which impelled me to write about climate change and the absence of meaningful discussion in the halls of government. With one political party unable to mention these words or their more provocative cousin – global warming – our dialogue is missing. We need the GOP at the table, so we can address openly the issues and plan how we should address them. The irony here is the GOP politicians know this occurring, but cannot talk about it as their oil/gas industry funders want to keep stiff arming folks and promote more drilling. Yet, that is precisely what we need to do less of.
The first piece was courtesy of Georgia State University in Atlanta. GSU has one of the finest risk management programs in the country and many actuaries, underwriters and risk managers graduated from there. Since managing risk is their forte, they have established a new course called “Climate Change and Risk.” The focus will be on the risk of climate change from the scientific, legal, public policy, economic and ethical perspectives. One of the two professors, Glenn Harrison, has served as a consultant to the Swedish government and the US Environmental Protection Agency. I found this noteworthy that courses of study are being developed to assess the risk of climate change when one of our political parties cannot mention the topic in a public forum.
The second piece is in follow-up to the concern I raised on fracking in North Carolina. A law has passed to proceed in 2014 once the regulations have been thought through some more. Yet, the issue came up again when the NC State legislature went back into session and Senator Bob Rucho advocated moving ahead with the fracking. I won’t repeat the concerns I mentioned in an earlier post “The Perils of Fracking,” but definitely more studies of the downside of fracking are needed before this state barrels full steam ahead. I would advocate the prize is not worth the chase due to the perils it causes, but also due to a glut on natural gas. So the developers would wreak havoc and the economic benefit may not be as material. This is an extreme approach to gathering natural gas, so it should not be done without the benefit of more study.
The third piece was mentioned in today’s paper. While it also is NC specific, its lessons are beyond our borders here. The state was actually trying to prepare for the increase in sea level due to climate change. The Federal authorities said the NC coast is vulnerable due to its low flat land and thin fringe of barrier islands. A study was sanctioned by the NC Coastal Resources Commission that projected a one meter rise in sea-level by 2100. The study also noted that 2,000 square miles of land could be threatened. It should be noted Maine is preparing if a two meter increase, Delaware a 1.5 meter increase, California a 1.4 meter increase and Louisiana a 1 meter increase. When a group backed by developers challenged the projections, the study panel reconfirmed its findings.
The troubling part is the developer group has asked the GOP led majority in the State Congress to pass a law which would limit the projections to the use of historical increases which would come in around 8 inches (about 1/5 the projection of a meter which is 39.37 inches). The developer group claims the higher projection would be harmful to development along the coast. So, in essence they want to fool people willing to fork over money to build and buy homes, businesses and properties on the shore. My thinking is you can pass all the laws you want, but you cannot hold the sea back.
If you venture to Bald Head Island off the NC Coast, you will see sandbags beneath these beautiful homes which were built too close to the shore. The sea has consumed many houses there and some people have lost everything. Trying to get insurance is next to impossible. So, you have people petitioning the State for compensation for buying a home to close to the water. In essence, the developers noted above want to do largely the same thing and let the buyer beware. Yet, let me point you back to the Georgia State course noted above on climate change. The insurance industry has to be savvy to the risks of sea-level change or it would lose money. I would ask even if you developed something, where are you going to get the insurance?
As a businessman, here is where I say we need the government’s involvement. The government has to convene discussions and plan with all stakeholders, so we do not have someone taking advantage of others. It is the nature of developers to make their money and get out, leaving the problems for someone else. More importantly, we need these discussions convened now, so we avoid passing the problem to our children. In actuality, the problem is here and we need to act while it is still manageable. Otherwise, our children will be putting a lot of sandbags up. More conservation, smarter energy planning, better risk management is needed now.