Be skeptical about global warming but buy a house on higher ground

Back in 2016 I wrote “Are markets so inefficient that global warming isn’t being priced properly?

If sea level rise is imminent, why were people willing to pay $8 million for a Ft. Lauderdale house that was “approximately the same height above sea level as a crushproof cigarette pack”?

Three Harvard eggheads have looked at this more carefully in “Climate gentrification: from theory to empiricism in Miami-Dade County, Florida” (Environmental Research Letters, April 23, 2018)

They have to work pretty hard, but they do find a correlation between height above sea level and price appreciation.

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15 Comments »

  1. Ken Hagler

    June 11, 2018 @ 1:01 pm

    1

    An important factor here is that the Federal government steals money from taxpayers and gives it to rich people whose houses are damaged by flooding under the National Flood Insurance Program.

  2. philg

    June 11, 2018 @ 1:38 pm

    2

    Ken: I had this argument with a local do-gooder. He wanted to tax middle-class people in Kansas to pay for a Dutch-style sea wall to protect Boston from the impending flood. I asked “Since you complain about income inequality, why would you want to tax a Walmart cashier in the Midwest to help preserve a skyscraper owned by a billionaire? Why not let the owners of property in Boston, who are far richer than average, pay for this themselves?” He mumbled about us all being connected in some sort of village (but some village members live in Shanghai and Hong Kong and own $500 million of U.S. coastal real estate while others live in Detroit and own a $5,000 house!).

  3. J. Peterson

    June 11, 2018 @ 2:33 pm

    3

    Miami Beach routinely floods now.

  4. dwight looi

    June 11, 2018 @ 2:38 pm

    4

    “Global Warming” due to human activity is COMPLETE AND UTTER RUBBISH! It is the biggest cam in the past century. The Earth has been warmer and cooler than it is today many, many, times in the planet’s history with no statistically meaningful correlation to CO2 concentration in the air. There is no basis to say that the climate is “normal” in 1918 or 1818, but not today. The fact is that the temperatures we see today, and the fluctuations over the last 100 years, is smack right in the middle of inter-glacial norms.

    Climate change is normal. Climate change is to be expected. Deal with it! Controlling output of the trace gas CO2 will have ZERO tangible effect on Climate Change just unaffordable economic penalties. Humans who choose to live on the hurricane coast or below seal level (Eg. New Orleans) deserve the consequences of doing so when shit hits the fan.

  5. Vince

    June 11, 2018 @ 3:02 pm

    5

    “Since you complain about income inequality, why would you want to tax a Walmart cashier in the Midwest to help preserve a skyscraper owned by a billionaire? Why not let the owners of property in Boston, who are far richer than average, pay for this themselves?”

    Probably very few Walmart cashiers pay any federal income tax. A flood in Boston wouldn’t just damage property, it could also kill people, many of whom don’t any property.

    This another example of an argument that needs to be extended to the armed forces. Seventy-five years ago America was engaged in an effort to conquer Japan. That had to have cost taxpayers quite a bit of money. Wars are very expensive, even if they’re rarely mentioned in “anti-government” blogs like this one. Now, let’s ask the question, what did Japan do to prompt such a high level of taxpayer-funded spending? They attacked Hawaii. So that should have been a problem for the taxpayers of Hawaii, not the rest of the USA.

  6. Corindel

    June 11, 2018 @ 3:22 pm

    6

    > even if they’re rarely mentioned in “anti-government” blogs like this one.

    In what sense is this blog “anti-government”? The blog does question some government spending, as any taxpayer should. That is anti-waste, not anti-government.

    > Now, let’s ask the question, what did Japan do to prompt such a high level of taxpayer-funded spending?

    They bombed a US military base. The US military is a federal institution, protecting the whole of the US.

    Some government functions, including education and most aspects of real estate law, are done at the state and local level. If you think they should be a federal problem, you should make an argument for this position. Making an analogy to a different government function, done at a different level of the government, is silly.

  7. Jack

    June 11, 2018 @ 5:52 pm

    7

    Hate to confuse you with facts, Vince, but Hawaii wasn’t a state at the time. The Japs attacked and destroyed a large portion of the US Pacific fleet, which was an attack against the US. They also declared war against the US. They didn’t declare war against Hawaii.

  8. Barlo

    June 12, 2018 @ 11:23 am

    8

    Interesting paper – thank you for linking. On the original thought of: “If sea level rise is imminent, why were people willing to pay $8 million for a Ft. Lauderdale house that was “approximately the same height above sea level as a crushproof cigarette pack”?” I would question:

    – Whether markets (or human beings) always correctly price assets (booms and busts and regular mispricing of options tends to point to No for me)
    – Whether a majority of people tend to equate imminent with 5 decades (I don’t believe people generally think that far out in a practical way – things are theoretical until they occur)

    Beach front homes make lousy investments generally but are usually seen as unique and luxury goods which probably adds another dimension to it.

  9. Pavel

    June 12, 2018 @ 1:04 pm

    9

    The effects of climate change are slowly moving up the exponential function curve, as we go up the curve we will experience greater effects in the next decade. Looking at the data from the scientists doing the actual measurements and not the business jet set IPCC crowd, you can conclude that we are done as a species.

    The first major effects of climate change will not be in Florida, it will be in a food insecure region in South East Asia, due to crop failure, and crop failure will lead to mass starvation and mass starvation will lead to war. We will see who will grab the last bowl of rice.

    Philg: Do any IPCC members fly business jets from your local field?

  10. GermanL

    June 12, 2018 @ 5:59 pm

    10

    @Pavel, but as Leonardo di Caprio said… if they do not have rice, then let them eat cake!

  11. zzazz

    June 12, 2018 @ 8:36 pm

    11

    @Pavel…”you can conclude that we are done as a species.”…

    and yet a one woman, one child will policy (world wide) would solve the problem in short order.

  12. philg

    June 12, 2018 @ 11:09 pm

    12

    Pavel: How can we be done as a species? Aren’t there are lot of thriving species on the planet today that, at one time, were reduced to just a handful of individuals?

    https://www.npr.org/sections/krulwich/2012/10/22/163397584/how-human-beings-almost-vanished-from-earth-in-70-000-b-c

    says that human population was quite small at one time in the relatively recent past (perhaps a few thousand). Or did you mean “We’re done as a species living the way that we have been, occupying pretty much the entire planet and crowding out every other species except parasites that prey on humans, such as mosquitoes and ticks.”

  13. Pavel

    June 13, 2018 @ 1:07 am

    13

    philg: We are still biological species that depend on habitat and ecosystems to survive. The Earth can support a certain amount of living biomass at a certain habitat and at a certain energy and resource level. There is strong evidence that climate change (along with human expansion) is causing loss of habitat, this could eventually reduce food production, which would lead to starvation and lower population levels in all species including humans. Mass starvation will lead to war, add nuclear weapons to this and we are done, as in no humans left on this planet or very few in a “mad max” world.

    Here is a paper from the Royal Society on Food Insecurity and Climate
    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5897824/

    Here is the infamous report from the Pentagon on Abrupt Climate Change
    “the result could be a significant drop in the human carrying
    capacity of the Earth’s environment.”
    https://grist.files.wordpress.com/2004/02/abruptclimatechange2003.pdf
    It would be good to find out if this doom and gloom report has been updated.

    Yes, human population was quite small in relatively recent past, but they did not have nuclear power and bombs. Populations of humans increased and decreased depending on available food. We could go down to a level in the 1000s of humans, but this would not support a technologically advanced species, we would revert back to hunters and gathers, possibly in a nuclear waste land.

    As long as there is enough food to feed most people in the world, climate change should be manageable, nobody that has a choice goes to war on a full stomach.

    There maybe a way to reorganize society to reach some equilibrium point without destroying the planet, but it would require a society not based on infinite exponential economic growth but growth based on long term availability of energy and resources and environmental capacity of the planet. Expanding beyond this planet will become a necessity to keep the human species going.

    We just may answer Fermi’s paradox when no humans are left on this planet or the human species is reduced back to hunters and gathers.

  14. GermanL

    June 14, 2018 @ 9:51 am

    14

    @pavel

    We just need two things to happen to save the earth: nuclear fusion and sex robots.

  15. Pavel

    June 15, 2018 @ 2:10 pm

    15

    @GermanL

    What happens when the sex robots figure out how to reproduce and make more sex robots and eliminate humans? Then this planet will be populated by sex robots living in a nuclear wasteland.

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