Two recent articles with related themes caught my eye. They are important for anyone who manages money, either professionally or for themselves. Together, they may just indicate a turning point in the debate on what might be the response to anthropogenic global warming.

The first, from former Treasury Secretary and Goldman Sachs Chief Executive Officer Hank Paulson, was headlined “The Coming Climate Crash.” In it, Paulson observes: “There is a time for weighing evidence and a time for acting. And if there’s one thing I’ve learned throughout my work in finance, government and conservation, it is to act before problems become too big to manage.”

That posture comes from the rational wing of the Republican Party, an ever-decreasing niche. Despite the best efforts of the extremists, there are still some Republicans who believe in science. Many of these folks (regardless of their faith) do not think that the Bible was the literal word of God, and that humans were given a brain for a reason, namely, to think, to reason, to make judgments based on scientific evidence.

Paulson goes even further, drawing parallels between the recent financial crisis and a brewing environmental one in the near future:

For too many years, we failed to rein in the excesses building up in the nation’s financial markets. When the credit bubble burst in 2008, the damage was devastating. Millions suffered. Many still do.

We’re making the same mistake today with climate change. We’re staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked.

This is a crisis we can’t afford to ignore. I feel as if I’m watching as we fly in slow motion on a collision course toward a giant mountain. We can see the crash coming, and yet we’re sitting on our hands rather than altering course.

The politics of global warming are not where my interest lay. (See “Profit From Global Warning or Get Left Behind.”) I am far more interested in your cognitive biases and how they manifest themselves in your investment portfolios. Continues here

Category: Investing, UnScience

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “How to Make a Killing in Global Warming”

  1. CD4P says:

    Excellent piece, BR! I sense you being contacted frequently to make appearances on shows like “The PBS News Hour”, as they followup on whatever latest ‘powerful storm to hit’ which consumes the headlines.

    Might VXG be an ETF by chance? Being such might help the average joe avoid stock specific hype, etc.

  2. farmera1 says:

    Interesting recent polls on climate change.

    http://www.bloombergview.com/articles/2014-06-17/for-republicans-first-immigration-now-climate-change

    As how to get rich, on science deniers, I think that boat has sailed. A number of years ago I bought farm land in North Dakota. It has paid off very well. The area is increasingly moved away from small grain farming (less profitable) into corn and soy bean farming (more profitable) made possible due to longer growing seasons as a result of global warming. But longer term no one/ very few will make money from the changes.

  3. constantnormal says:

    There are a lot of ways to proceed in this vein, but the possibilities are limited at present due to a paucity of financially well-managed companies that are also expanding into the opportunities.

    First Solar (FSLR) is an example in the solar power space, but I have not been able to identify a company in the water management business that has solid financials and good growth.

    Similarly, the hydroponic gardening business offers great potential for year-round locally-produced crops that are free of pesticides and (“locally produced”) also avoid transportation costs.

    Every summer at the local farmers market, a nearby farm loads a truck with sweet corn harvested that very morning, and I can tell you that there is nothing in the stores that can compare with it (plus, it’s cheaper than what’s in the stores). Of course, this is not an example of hydroponic gardening, but does point to the advantages of “locally produced”. But these kinds of business tend to not scale up very well, and there is no way for an investor to profit from a well-managed local farm.

  4. 4whatitsworth says:

    You could probably bet on the severity of El Nino. Here is an interesting article on the data of 82, 97 and 2014 so far.

    http://bobtisdale.wordpress.com/2014/06/03/the-201415-el-nino-part-10-june-2014-update-still-waiting-for-the-feedbacks/

  5. WickedGreen says:

    What?

    Hansen, McKibben, the IPCC, and more going wayyyy back … hell, because it’s finance, I’ll toss in Jeremy Grantham.

    Now? What – now the that the ‘sensible GOP’ establishment is on board, we can do this now?

    PLEASE.

    Welcome, you guys.

    About time you showed up.

    What happened? Re-assess your South Beach condo after the NOAA data came in or something?

  6. ch says:

    Look at the oil situation…we are going to run out of oil that we can afford to burn well before climate change gets out of control.

    Oil prices have quintupled in the past 10 years; global oil exports haven’t budged. Econ 101 = when prices of a very inelastic commodity rise 5x and supplies don’t budge, you have a brewing shortage.

    Then correlate oil to agricultural yields and human population & you realize that well before climate change gets anyone, peak cheap oil will have had its way with us.

  7. ToddMPeters says:

    Barry- I don’t think you are an alarmist. This article paints an even more dismal view of our future: http://www.reuters.com/article/2014/06/24/us-climatechange-economy-idUSKBN0EZ0AA20140624