Early Retirement Extreme Forums

Chad wrote:The insurance companies will slowly increase rates.

I can verify this. My home owners insurance has gone up by 10%+ each year for the past 3 years.

'The Holderness coastline suffers the highest rate of coastal erosion in Europe: 5 feet (1.5 m) a year on average or 2 million tonnes of material a year... It is thought that approximately 3 miles (5 km) of land has been lost since the Roman era, including at least 23 towns/villages, including Ravenspurn.'

I imagine properties here have never been insurable or mortgagable, and it's only going to get worse.

@chad
I really liked your links- thanks!

I'm not surprised that FEMA is taking a harder stance on covering state catastrophes. They were pretty vocal about how much Katrina cost them (its in the billions). I doubt they have the funds to cover many more of those types of storms.
So, the insurance companies are already seeing the results of climate change and are raising rates, cancelling policies and in general trying to finagle ways to force the states to share in the costs. Cool. An unlikely ally in the fight for change.

Molly wrote: So, the insurance companies are already seeing the results of climate change and are raising rates, cancelling policies and in general trying to finagle ways to force the states to share in the costs. Cool. An unlikely ally in the fight for change.

Interesting people's perspective on agents of insurance. Prediction markets seem to be a most typical rational actor, always in it to make a cold hard profit.

I find it useful to take an insurance agents point of view when evaluating certain decisions (e.g. recently to determine if what level of health insurance under aca to buy for myself.)

http://www.lloyds.com/~/media/files/new ... 202015.pdf

Lloyds: The insurance impacts of acute disruption to global food supply.

https://medium.com/insurge-intelligence ... 121e455997

Underlying study. An improved and updated World3 model. This is from the same guys who supported the Randers 2052 update.

In other news, the Dutch government is ordered by court to reduce emissions by 25% instead of the 17% they planned on doing now. See http://www.bbc.com/news/world-europe-33253772. Do you think this will set a precedent for other countries? Will it be effective? I hope this is the start of something, but I remain skeptic.

It wouldn't surprise me that cities, states, countries, or groups of countries decide to enact strong measures without waiting for a global agreement that won't come until the number of crisis events becomes too big to ignore on a global level. Especially not in ground-zero areas like the Netherlands where the consequences of delayed actions become obvious enough that further stalling simply becomes inexcusably.

It's hard to argue continued inaction due to not being able to agree globally for those who will be the first to feel the consequences. If the dike is leaking and you're now in it to the neck, you put your finger in hole even if the taller person next to you refuse to do so. In contrast to when you were in it to the ankles and had more room for negotiation.

Another example is South Florida's attempt to secede to deal with the rising sea levels that the rest of Florida chooses to ignore.

So I think this IS a start and that a global agreement will eventually be built bottom-up based on local agreements as impacts strike deeper and deeper into the bubbles surrounding most decision makers.

Following India last month ...

http://www.nytimes.com/2015/06/25/world ... rises.html

Pakistan Heat wave: 770 dead, mostly low income and elderly (as usual).
This one is compounded by summer-time Ramadan (no water allowed during daylight).

Pacific Northwest heat wave poised to break records: http://www.wunderground.com/news/record ... atejun2015.

Big heat records in Alaska too. Since 2015 is an El Nino year, we can probably expect a lot more records on the high side.

Yeah, we were starting to have a lot of hot days this June. I've lived in the PNW my whole life and couldn't recall the start of any summers being this hot before, so went digging through the charts. Last year Portland had more days over 100 F than ever and I am expecting that record will be broken again. 100 F in Portland? That used to be a very rare event!

I found your above links very interesting, Jacob. thank you for sharing them.
From Lloyds risk assessment:
“What is striking about the scenario is that the probability of occurrence is estimated as significantly higher than the benchmark return period of 1:200 years applied for assessing insurers’ ability to pay claims against extreme events.”
Lloyds states that the probability of this scenario is significantly higher but doesn't say what the probability is. Does anyone here know?
Also, aside from higher food costs and flooding the US is not really mentioned in either the scenario or the responses. Why is this?

For that matter none of the first world countries are really mentioned. Surely they would intervene and affect the risk?

@Molly - In the US, food costs for the average person is 13% of the budget. You can thus double or triple it and everybody would still be able to afford to feed themselves. In, e.g. Egypt, the food cost is 40% of the average budget. Thus it only takes a minor rice in prices to cause food riots. Also the first world wastes up to 50% of its food (straight to the garbage). This might sound crazy in this audience, but that's another source of slack. In addition, what commonly happens [in the US] is that since we eat a lot of beef(*) which is a supremely inefficient source of protein and since beef these days is fed with grain not grass, then cattle is simply slaughtered when grain prices (or water prices) go up. This keeps grain prices down while sending animal protein prices up (dairy, beef).

(*) The average American eats 125kg of meat annually. The average Indian eats 3kg.

The revised 1:200 ratio is likely proprietary (it is after all by having the right ratio that LLoyd's make their money) but according to the second link if current trends are continued without a change in policy, it will reach 1:1 by 2040.

Footnote: The difference in meat consumption is a result of cultural and religious values more than of availability of meat or its cost (India is the largest exporter of beef.)

More extremes and broken records...

Indian Meteorological Department has recorded highest rainfall in its history in three cities although monsoon has only arrived about eight days ago.

George the original one wrote:Yeah, we were starting to have a lot of hot days this June. I've lived in the PNW my whole life and couldn't recall the start of any summers being this hot before, so went digging through the charts. Last year Portland had more days over 100 F than ever and I am expecting that record will be broken again. 100 F in Portland? That used to be a very rare event!

I remember in high school I was working in the fields, probably around 1980, and it got up to 112 one day when I was moving irrigation pipe in tall corn. I almost passed out. I am fine if I never see that again.

But didn't we have a hundred degree day in May last year? I think I was running in it. I'm going running after work today. I just drink lots of water.

I hope my spring doesn't dry out and that my forest doesn't catch fire!

http://www.salon.com/2015/07/05/califor ... n_drought/

Millions of Californians expecting relief on their water bills for taking conservation measures instead are finding higher rates and drought surcharges.

Water departments are increasing rates and adding fees because they’re losing money as their customers conserve. They say they still have to pay for fixed costs including repairing pipelines, customer service and enforcing water restrictions — and those costs aren’t decreasing.

Example of what happens when previously ignored externalities begin to get factored into the cost. The total price (think GDP) remains the constant but the amount of goods delivered decreases as more resources are diverted towards increasing infrastructure/damage expenses.

GDP = Investment + Consumption, so if Investment costs increase because "nature increased its cost", consumption falls while expenses remain the same.

It's been really smoky here in Southern central Canada lately..forest fire smoke has been lingering for probably about a week (and it is expected to continue for a while). There are widespread fires to the Northwest of us and the prevailing winds are bringing in the lingering haze. Apparently the fires have started because of lightning and we did get a solid pounding of rain yesterday but the smoke has returned. People have been evacuated from their communities to the Northwest of us and the fires has spread to the west as well. The sun appears an eerie red ball in the sky when you can see it, as the air is mixed with fog and cloud at times recently as well.

Last summer there were widespread floods in our area, emergency dykes were built weeks into the summer, which saved us, but our general flooding usually comes in the spring, and last year it lasted well into the summer which is extremely rare. This year major dyke construction is happening in town to prepare for future floods. A local golf course built alongside the river hasn't had it's full layout in play for over 5 years due to flood damage.

There are a lot of rabbits frolicking around locally and there are a lot of red wing black birds which will swoop at you if you get near their nest, so I have had to change a few of my running routes to avoid getting "attacked."

PBS' Newshour has been keeping tabs on climate change. Today they had a segment were they interviewed some of the farmers in CA. One guy is drilling a well that is deeper than the Empire state building is tall. Another farmer took out a second mortgage($200,000) to have their well drilled. And the day before yesterday they talked about how in Charleston, SC there are parts that will flood if there is a particularly high tide. When they interviewed the mayor about it, he basically said that they were waiting to see how things turned out. Nice.