When it comes to climate change, who are the Have-Nots in rich countries?

Mike Fourcher

Mar 12, 2024 — 4 min read

A mobile home park in Florida after the passage of 1992's Hurricane Andrew. The hurricane caused $60 billion of damage in 2022 dollars. (NOAA Archive)

Every few months a scientific report emerges that tries to summarize the potential environmental and ecological damage climate change will wreak over time. Last summer the IPCC AR6 report carried the freak out burden. This week Europeans can get their jump scares from the European Environment Agency that reports “Europe is the fastest warming continent in the world”, and “Extreme heat, drought, wildfires, and flooding, as experienced in recent years, will worsen in Europe even under optimistic global warming scenarios.”

The trouble with these reports is that humans struggle with imagining the compiled results of slow change, like the metaphorical slowly boiling frog. Rather than obvious catastrophes, climate scientist Andrew Dessler suggests, “A more plausible scenario involves ‘death by a thousand cuts,’ with numerous smaller impacts occurring simultaneously or in close succession.“

The stated goal of these reports is to convince policymakers to take action. “European and national policymakers must act now to reduce climate risks,” said EEA director Leena Ylä-Mononen. However, it seems unlikely the European Union Parliament will take action. Last week Politico reported a draft European Commission document recommending weak action on climate with few concrete actions.

Seen through a political lens, the call for climate action in Europe (as well as the US and other rich countries) is a demand made on behalf of an unclear constituency. Who exactly is being damaged by the changing climate?

Legendary American political organizer Saul Alinsky, in his 1971 book “Rules for Radicals”, defined everything as a struggle between “Haves and Have-Nots”. The Haves have power and money, “the Have-Nots have no money and lots of people”. But still, in wealthy countries, who are the Have-Nots?

In the United States, the growing risk of climate-fueled disasters has gradually become subsidized by state-run insurance agencies. As private insurers “de-risk” themselves by moving out of disaster prone areas, governments pick up the risk, ignoring the giant cost potential. Last year, the United States saw 25 disasters that cost more than $1 billion. While Florida’s state-run insurer has $18 billion in reserves, that fund could be depleted by one Hurricane Harvey, which hit Louisiana and Texas in 2017 and brought $125 billion of damage.

“A-ha! Then they’ll really see who’s at risk for climate damage!” you say.

Even then, state-sponsored disaster mechanisms will swing into action, and after that, lawsuits. For instance, the American federal government-sponsored flood insurance program is attempting to raise rates to more accurately reflect climate risk. Municipalities and states are suing because new, higher rates are more accurately predicting risk, making some coastal areas too expensive to live in.

"The Risk Rating 2.0 flood insurance policy has now become a natural disaster of its own," Louisiana Attorney General Jeff Landry told National Public Radio. Landry, protecting his voters from the consequences of climate change, is suing the federal government to bring flood insurance rates back to the old system with lower rates.

With the federal government artificially keeping flood insurance rates down, and state-sponsored insurers keeping home insurance prices down, it seems as if the government is actually serving the Have-Nots: give them what they need so they can keep living in ocean-side homes. But then, as US Sen. Sheldon Whitehouse suggests in a recent Bloomberg story on Florida home insurance reports, “If Florida is the leading edge of the predicted coastal property values crash, it could lead to an economic meltdown similar to 2008.”

What would happen to the Have-Nots then? Do thousands of people have to lose their homes before Americans begin to think of climate change as a real risk?

Spain’s Catalan is undergoing a severe water shortage, with reservoirs below 15% capacity the area has implemented emergency usage restrictions. While some residents may now be considering their role in climate change, the first order of business has been to convince the federal government to divert water from Aragon to Catalan, which has set one group against another.

Saul Alinsky, who died in 1972, would have likely have been confounded by climate change. In rich countries, who exactly are the Have Nots? How do you implicate the Haves?

While scientists may (accurately) predict future climate damage, the pathway to that damage is hard for the average person to see. We’re living with Dessler’s thousand cuts.

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Ideas

While “climate risk” has become a popular business talking point, it still meets stiff resistance from people who balance books for a living. In the last week bureaucrats pushed back at the European Central Bank, insurers resisted the US Treasury, and CFOs opposed the SEC from installing new financial climate metrics. While complaints in each case were about “cumbersome” systems, the real issue is over what counts as an externality versus an intrinsic burden? Businesses naturally don’t want to shed costs that are not core to operations. These are simply backdoor efforts by the ECB and US regulators to require businesses to take on previously externalized costs. The only way to make companies take on climate costs long-term is through legislative action – and for now pro-climate forces don’t have the juice to get that done in the US or Europe.

The UNFCCC, through the COP meetings, has been struggling to set rules for international carbon credit trading for three years. COP28 was supposed to be the “big” meeting where it all happened, but a fight between the US and EU over what actions get to be called carbon credits stalled the discussion. But that doesn’t mean people aren’t planning to push through their own ideas of junk credits. Leading the way are Indian and Chinese firms using older, discredited systems of counting carbon credits and trying to push them into the new system that’s expected to begin in 2025. While carbon credits could provide a way to reliably account for greening the economy, it also could be used as a scamming mechanism if COP29 negotiators don’t agree to tight accounting rules.