How climate chaos drives reactive, rather than proactive economic decisions
Part 1 of 3 (read part 2, read part 3)
“Climate change increasingly poses one of the biggest long-term threats to investments.” — Christine Figueres, Executive Secretary, UNFCC
I believe that when — say, 75 years from now — someone writes a history of the global debacle that engulfed us in the first half of the 21st century, they could select two years, 2012 and 2017, as milestones in the developing crisis. 2012 was the year of the massive, unprecedented melting of Arctic summer sea ice, dramatically heralding an unmistakable shift in global climate. And 2017 can be seen as the year that climate chaos began to drive the American and global economies.
Such crises are ongoing, of course. But in historical perspective certain events, such as the stock market crash of October 29, 1929, the “day the Great Depression began,” stand out.
Setting the stage for a similar “sudden onset” of climate chaos economics were the preparations for a tediously repetitious Congressional debate about raising America’s national debt ceiling. But just as the various factions were staking out their positions on when (if ever) and by how much to raise the federal borrowing limit, Hurricane Harvey swamped Houston — and FEMA, chronically underfunded in this era of snowballing climate disasters, was quickly running out of money for addressing the outsized emergency.
Since increasing FEMA’s funding necessitated raising the debt limit, an immediate deal was struck that temporarily raised it and allowed a $7.9 billion “first installment” of Harvey relief funds. End of discussion. (For now.)
In the midst of that deliberation, Hurricane Irma was lumbering toward Florida. Although that state in a sense dodged a bullet, because Irma lost much of its punch by traveling over land rather than over storm-energizing warm water, the hurricane’s damage still will cost tens of billions to repair.
And then there’s Puerto Rico.
Seriously weakened by Irma, which wiped out much of its power grid, the island was flattened by Hurricane Maria 11 days later. At the time of this writing, Puerto Rico, in the words of its Governor Ricardo Rossello, is on the brink of a “humanitarian crisis.” Home to 3.4 million American citizens, 90 percent of the island is without electricity and working phones. While losing household lighting causes significant hardship, the lack of power also disables hospitals, services of every type, schools and even sewage-treatment plants.
Additionally, 60 percent of the island is without potable water, grocery stores are empty, most rural roads are damaged or impassible and…you’ve got the picture.
Meanwhile, an economic calamity will continue for the foreseeable future. Fourty-six percent of Puerto Rico’s economy is based on manufacturing that is dependent on a functioning electric grid, which, experts are saying, will take six months or longer to restore. This season’s agricultural crops literally have been blown away, and tourism is out of the question For at least a year, the Puerto Ricans will have to be fed, sheltered and clothed, or they will have no choice but to become climate refugees in mainland cities, further taxing their social services.
Additionally, the economic damage extends beyond the island and its people. Insurers estimate they will lose up to $85 billion from claims. For now, any repayment of Puerto Rico’s debt of $79 billion (68 percent of its GDP) and payments on its $50 billion in pension obligations is on hold. Also, to keep their goods and profits flowing, manufacturers must quickly abandon Puerto Rico and relocate elsewhere, further impoverishing the island.
What will it cost to truly fix Puerto Rico, if indeed it is fixed? Half a trillion?
How much of that is needed immediately?
Thus, climate chaos drives reactive, rather than proactive economic decisions. We’ll be forever putting out fires, figuratively and literally, at our ecological house.
Editor’s Note: This article appeared previously in other publications as part of an ongoing series called “Your Ecological House,” written by Philip S. Wenz, the publisher of Firebird Journal. A sub series of Your Ecological House on the “The new economics of climate chaos,” will be published on this site in several installments.