Some people don’t give up easily. A report from a guy who’s been claiming climate change was pushing up insurance costs for years so the government should give insurance companies free money, at an institute named for and funded by (say it ain’t so) an insurance company, just called basement flooding “the number one cost of climate change in Canada”. No. Basements flood because people build in places that have been flooding since the end of the last glaciation. But as Roger Pielke Jr. just wrote in “The Climate-Risk Industrial Complex and the Manufactured Insurance Crisis”, part one in a series, “A climate-risk industrial complex has emerged in this space and a lot of money is being made by a lot of people. The virtuous veneer of climate advocacy serves to discourage scrutiny and accountability.” But not from him or us, we can assure you.
As we ourselves have noted, the New York Times has been walloping on this climate-change-ate-my-insurance-policy drum for ages. For them to say “Over the last few years, we’ve written about how climate change has driven home insurance prices way up for many Americans” is remarkably unself-aware understatement. Pielke Jr. noted that just since 2019 the Times has published more than 1,250 articles on climate change and insurance. Yet despite the fabled skepticism of journalists, those articles have not focused on what really matters, including the role of incentives. And so, RPJ writes:
“Today, I kick things off by sharing three fundamental, and perhaps surprising, facts that go a long way to explaining why insurance prices have increased and who benefits: * Property/casualty insurance is raking in record profits; * Insurance underwriting returns vary year-to-year but show no trend; * “Climate” risk assessments are unreliable and a cause of higher insurance prices.”
Now the third might be a matter of controversy at least in some quarters. Though obviously not to us. But the first two are simple matters of fact which any journalist, even at the Times, could have discovered in a few hours by searching online on the World Wide Web thing the kids are on about. And while we are not under the impression that a great many journalists studied economics before plunging into activism, if insurance companies are making record profits then they are not facing a crisis.
Pielke Jr. also notes that among those who helped create this Climate-Risk Industrial Complex was one Mark J. Carney, then governor of the Bank of England, who gave a 2015 speech accompanied by a Bank of England study saying insurance companies were too dumb to understand risk, unlike Davos Man who perceived that:
“[T]here are some estimates that currently modelled losses could be undervalued by as much as 50% if recent weather trends were to prove representative of the new normal...”
Yeah. Unless they’re not. But four years later the bank of England forced firms to assess “climate risk”. And NB that despite much trendy 1970s paranoia about big companies secretly pulling the strings of government (shades of the state as the executive committee of the bourgeoisie), large firms are very reluctant to challenge politicians partly because they know that they can be crushed by hostile regulations and partly because they believe they can work the system far better than their smaller rivals to get favourable ones.
It’s kind of important to the story, and hasn’t been news since, oh, say the U.S. Federal Meat Inspection Act of 1906, supported by big companies confident that they would profit from greater consumer confidence and the elimination of little competitors. But it’s not the sort of thing you find in the legacy media. Especially not where, as in Canada, the latter is desperately dependent on state subsidies.
Oh sure, state media will write headlines like “Decades-old study on common weed killer retracted after journal editor says Monsanto may have helped write it” and get the point about cui bono if not the one about peer review. But not it seems more broadly and on causes they favour.
Indeed, speaking of the Meat Inspection Act, and the lurid novel The Jungle that helped bring it about, in An Inconvenient Truth Al Gore made much of a quotation from that novel’s author, Upton Sinclair, that:
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
But Gore, who got very rich out of the climate crisis, seemed to feel that this unhappy issue only affected people with whom he disagreed.
On the other hand, and it’s one way of putting it, Bloomberg Green noted that the usual suspects are unhappy at Zillow pulling dubious climate risk figures from its real estate listings. And of course it insisted that “Zillow’s climate risk scores have disappeared from home listings, but the risks themselves are very real.” But it also conceded that “Modeling those threats down to the home level, though, is challenging.” Worse, or better if you’re into even grudging acknowledgements that a past shrill position may have lacked substance:
“Climate risk modeling is far from perfect, a growing body of research shows, with different models often yielding different results. And it’s not always obvious to experts, let alone homebuyers, what the data represent or how they should inform decisions.”
Oh. That settled science. And of course Zillow, unlike activists and increasingly journalists, makes its money by getting risk right, so its salary depends on understanding flaws in this kind of hocus-pocus not failing to. Like, say, oil companies putting down the low carbon and backing away slowly.
