Monday, October 29, 2012

Something for "small government" conservatives to ponder

So as Frankenstorm Sandy pounds the east coast I am once again facepalming as our nation continues to bury its head in the sand regarding climate change. Some people may explain this as a "freak occurence", but I've seen way too many freak occurences in the past decade to accept these things as just black swans. Pretty much every rigorous climate model predicts that the warming we are causing will lead to severer and more frequent storms, more instances of extreme weather (like this summer's drought, for instance), melting of sea ice and glaciers, and eventually large changes in ecosystems and species distribution. While the last of these items has not had enough time to get underway, everything else we are seeing today. Not 20 years from now. Not 10 years from now. Today. Storms like Sandy are no longer outliers from the general pattern, they are the new normal, and anyone who says different has a financial interest in making sure our practices do not change.

The one thing that continues to puzzle me, however, is the relative lack of silence from those who have a financial interest in actually addressing climate change, namely insurance companies. Their risk models are being thrown all out of whack, they are paying both a higher volume of claims and greater dollar amounts on them (or else paying more lawyers to fight them in court and underwriters to create ever more bare-bones policies), and while premiums are going up, especially in high risk areas, there is a practical ceiling to that beyond which people will be priced out of the market. Last I checked, the business model for most types of insurance was based on a large amount of people paying affordable premiums so that they could make the occasional claim when necessary, and that only a few people would be making claims at any one time. Charging higher premiums to compensate for increased chances of risk is a reasonable short-term decision, but taking in ever-higher premiums from ever-fewer customers, while at the same time reducing what sorts of events and damages those premiums cover is a death spiral for that model. This leaves ever-greater numbers of people who will either need to foot the bill themselves to rebuild their lives when disaster strikes (something few will be able to do), and eventually the government will need to step in to provide insurance (as it already does in the case of floods) and associated relief programs since the private market will no longer be able to. Will big insurance finally wake up and grow a spine to take on the fossil fuel industry? I hope so, since if not they will be shooting themselves in the foot.

In one sense I love the irony: people who believe the government should be smaller and vote for candidates who have similar goals, but who will because of that belief will not enact any meaningful checks on the forces that cause climate change, actually will end up causing government to be larger in order to deal with the effects of climate change. Unfortunately, as with pretty much every tenet of conservative ideology, it is the masses that get screwed. 

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