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We have no system to deal with escalating climate damages. It’s time to build one.

Brad H

The "system" Roberts is talking about in his VOX piece, "We have no system to deal with escalating climate damages. It's time to build one," is an alternative to the present hyper-real real estate market. "The nightmare scenario" for South Florida homeowners he says, "is that real estate markets will catch on to climate change...and tank." If you had no insurance and you were faced with investing another $500,000 into a dwelling that is sure to be at the mercy of the unavoidable next hurricane, why wouldn't you invest in a "safer" part of the country? Scientists are saying that one thing we now do know is that the world's major coastal cities will inevitably be flooded and unlivable due to sea rise already locked-in - that is fact. Wouldn't the rational response be the beginning of a massive wave of internally displaced U.S. citizens? If not now, then very soon? (Not to mention the larger issues of environmental refugees from US citizens who don't have the luxury to "reinvest" as well as those from the Caribbean and elsewhere in the Global South.) And what happens when the real estate market "tanks" and the rest of the economy goes with it? This is another issue of capitalism's problem with 'stranded assets'. We are living amidst the problem of a massive bubble of stranded assets and stranded ethics/intellect/action as crisis deepens and the moment of decision is building. I'm looking for ways that this is significant in my immediate life and personal connections...as well as collective response. Any of you?
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Linked article Brad is referring to: We have no system to deal with escalating climate damages. It’s time to build one.

"...It was made habitable on a large scale by settlers battling back the water, draining the wetlands and filling in the swamps." At least those "settlers" can lay claim to assets. What about the slaves that actually did the work to drain the wetlands, etc.? Many of their descendants are lacking assets, stranded or not Guess that is part of the stranded ethics we have in the U.S. that will bring us to a bad end unless we can organize a collective response to their ill-conceived plans. I know, we all know...

Ted F

Capital investments have a payback period whether they be windmills or coal-fired power plants. To make a transition to a decarbonized economy at the pace required to avoid catastrophic climate change, we would have to junk a lot of existing capital investments before their time. Of course, the owners of these assets are loathe to have them declared "stranded" and will fight tooth and nail to exploit them to the end of their "useful" lives. Pfeiffer and his colleagues have concluded that, to limit global mean temperature increase to a danagerous 2°C, we will have to "strand" all new electricity generation infrastructure built after 2017. Their conclusions are based on IPCC carbon budgets and the IPCC’s AR5 scenario database, and assume future emissions from other sectors are compatible with a 2°C pathway. It seems that the issue of stranded assets is central to planning for a transition to ecosocialism.

The Pfeiffer article is:

The ‘2°C capital stock’ for electricity generation: Committed cumulative carbon emissions from the electricity generation sector and the transition to a green economy
Applied Energy

Volume 179, 1 October 2016, Pages 1395-1408

  • Defines ‘2°C capital stock’ as infrastructure that gives a 50% chance of 2°C warming
  • The ‘2°C capital stock’ for electricity generation will be reached by 2017 on current trends.
  • New electricity generation assets globally must then be zero carbon to avoid stranding, CCS or CDR.
  • Risk of stranded assets is relevant to investors and policy makers.
This paper defines the ‘2°C capital stock’ as the global stock of infrastructure which, if operated to the end of its normal economic life, implies global mean temperature increases of 2°C or more (with 50% probability). Using IPCC carbon budgets and the IPCC’s AR5 scenario database, and assuming future emissions from other sectors are compatible with a 2°C pathway, we calculate that the 2°C capital stock for electricity will be reached by 2017 based on current trends. In other words, even under the very optimistic assumption that other sectors reduce emissions in line with a 2°C target, no new emitting electricity infrastructure can be built after 2017 for this target to be met, unless other electricity infrastructure is retired early or retrofitted with carbon capture technologies. Policymakers and investors should question the economics of new long-lived energy infrastructure involving positive net emissions.

David J

This is the latest iteration of "crisis theory", one that is under-developed IMO. We were just discussing the difference between those who have fire insurance and can re-build and those without flood insurance who must start over somewhere. These losses are not trivial. And as for the re-insurance market, when will that be over-stressed, causing major economic impacts?
I think this was the point of Naomi Klein's chapter: "the Right is right"; conservatives understand the impacts will be devastating to the economic model they champion (hence their climate denial), while liberals are in a different type of denial, believing "green investment" will save capitalism from the effects of stranded assets.

The IEA estimates it will take 13.5 trillion in investment over the next 15 years to meet Paris goals ( themselves disastrous, Hansen now says .5 is a safe level of warming). But is it truly "investment" when you can't expect to ever get paid back, much less realize a profit? Capital knows the answer. Instead we still see investment in Alberta tar sands and Bakken crude, investment we will have to "strand" ourselves.

Ted F

David, I love your fish. Can you explain a little more what you mean by "crisis theory" and how it is "under-developed"? Naomi Klein effectively sounded the bell on "the Right is right" theme in a Nation piece published some years ago. She has yet to call for an ecosocialist revolution but has awakened many of her readers to the failure of liberals to recognize the magnitude of the changes that will be needed to address climate change. Her writing, unlike Bill McKibben's, points to deeper systemic contradictions, not just the evil of fossil fuel companies and their immediate allies.

David J

Thanks , Ted, caught on the Big Hole river in Montana, my home. Simply the notion of crisis as rupture which creates an opening for deep structural change, like Klein's "shock doctrine" at a more radical level. A persistent theory is the so-called "law of the tendency for a falling rate of profit" or over-accumulation.
I suggest the rupture will come from a confluence of three crises; over-accumulation ( and the attendant inequality and hollowing out of democracy)- together with the ecological crisis- together with a psycho-social crisis of meaning, purpose and lack of dignity.
As current systems lose legitimacy, new ones will be needed from the egalitarian, pluralist side. Which is why the work of eco-socialists and vision like Magdoff and Williams put forth is inspiring.