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The answer to this question is quite simple, and the two choice sentences from the article: "And their time frame is what, five years? How do you reconcile tho

by adevine 10y ago

The answer to this question is quite simple, and the two choice sentences from the article: "And their time frame is what, five years? How do you reconcile those two things: It’s a 100-year problem and a five-year investment cycle." The answer is simply that the private equity firm does not account for the long term, but that the city of Miami Beach will have to—soon. And that is fundamentally what makes climate change so difficult to deal with. The economic incentives, which only really look 5-10-15 years out, can't respond to consequences that are 50-100 years out, and by then it's really too late.

graaben 10y ago
Exactly. It reminds me of the "I'll be gone, you'll be gone" mentality of Wall Street in the mid-2000s. As long as these new developments are sold to buyers/investors now, the risk is transferred away from the developers and their incentive to build remains. And the demand isn't going to dry up any time soon with tons of cash from South America coming into Miami every day. There will be a day of reckoning soon when the next major hurricane hits and all of these new developments are damaged beyond repair. Miami got very lucky with Matthew a few months ago, but the next one is really going to hurt today's buyers.
cr0sh 10y ago
> And that is fundamentally what makes climate change so difficult to deal with. The economic incentives, which only really look 5-10-15 years out, can't respond to consequences that are 50-100 years out, and by then it's really too late. On the global level (let's say 50-100 years out), do you think we as a species are headed toward an "Easter Island" effect, where we "whistle past the graveyard" and assume everything is "fine" - until it isn't - and at that point we can't do anything and have to deal with the potentially existential consequences?
- eli_gottlieb 10y ago
  At the moment, yes we are.
- anexprogrammer 10y ago
  Very much so. We still have the foot hard on the gas. We haven't even got 10 years of business as usual. The conversation at the moment is about power, but moves to get off fossil are, globally, token. The conversation hasn't got to agri-business, deforestation and meat especially beef, or population, or water. Forests are still being felled and burnt for cattle and palm oil, new fracking is still reported as opportunity for jobs and profit. I'm starting to arrive at the belief that my children's best hope is being amongst the 100m or so left.
- throwayawnotime 10y ago
  I do
- pkituu 10y ago
  http://www.lunarbaboon.com/comics/imminent.html http://www.lunarbaboon.com/comics/imminent.html
deleted 10y ago
[deleted]
nugget 10y ago
Almost no 100-year stakeholders exist. Real property owners will have the most to lose but even they have a much shorter time horizon. The solution is probably for some combination of Federal and State led remediation funded by raising the local property taxes by an extreme amount (200-300%) matched by Federal funds. You have to inflict enough pain on the locals that the rest of the country won't complain when they are helped (see Detroit). Whether this is politically feasible (or even Constitutional) I don't know.
pfranz 10y ago
Assuming the market is working* this should all be factored in. Yeah, economic incentives might be looking at the next financial quarter, but when you finance a building it's amortized over a number of years (most home loans are 30 years, I figure commercial or industrial are longer). Insurance is required to secure financing and insurance should be factoring this in since the whole point is that they're hedging risk and planning for 1 in 100 catastrophes. On the flip side, major hurricanes have bankrupted insurance companies and left property owners without the benifits they paid for. The two solutions I see are larger (more diversified) insurance companies or the government stepping in to regulate. * I have little faith that this is actually true
acchow 10y ago
Why would I invest in something knowing it will be really hard to find a greater fool?

by adevine 10y ago

graaben 10y ago

Exactly. It reminds me of the "I'll be gone, you'll be gone" mentality of Wall Street in the mid-2000s. As long as these new developments are sold to buyers/investors now, the risk is transferred away from the developers and their incentive to build remains. And the demand isn't going to dry up any time soon with tons of cash from South America coming into Miami every day. There will be a day of reckoning soon when the next major hurricane hits and all of these new developments are damaged beyond repair. Miami got very lucky with Matthew a few months ago, but the next one is really going to hurt today's buyers.

cr0sh 10y ago

> And that is fundamentally what makes climate change so difficult to deal with. The economic incentives, which only really look 5-10-15 years out, can't respond to consequences that are 50-100 years out, and by then it's really too late. On the global level (let's say 50-100 years out), do you think we as a species are headed toward an "Easter Island" effect, where we "whistle past the graveyard" and assume everything is "fine" - until it isn't - and at that point we can't do anything and have to deal with the potentially existential consequences?

eli_gottlieb 10y ago
At the moment, yes we are.
anexprogrammer 10y ago
Very much so. We still have the foot hard on the gas. We haven't even got 10 years of business as usual. The conversation at the moment is about power, but moves to get off fossil are, globally, token. The conversation hasn't got to agri-business, deforestation and meat especially beef, or population, or water. Forests are still being felled and burnt for cattle and palm oil, new fracking is still reported as opportunity for jobs and profit. I'm starting to arrive at the belief that my children's best hope is being amongst the 100m or so left.
throwayawnotime 10y ago
I do
pkituu 10y ago
http://www.lunarbaboon.com/comics/imminent.html http://www.lunarbaboon.com/comics/imminent.html

deleted 10y ago

[deleted]

nugget 10y ago

Almost no 100-year stakeholders exist. Real property owners will have the most to lose but even they have a much shorter time horizon. The solution is probably for some combination of Federal and State led remediation funded by raising the local property taxes by an extreme amount (200-300%) matched by Federal funds. You have to inflict enough pain on the locals that the rest of the country won't complain when they are helped (see Detroit). Whether this is politically feasible (or even Constitutional) I don't know.

pfranz 10y ago

Assuming the market is working* this should all be factored in. Yeah, economic incentives might be looking at the next financial quarter, but when you finance a building it's amortized over a number of years (most home loans are 30 years, I figure commercial or industrial are longer). Insurance is required to secure financing and insurance should be factoring this in since the whole point is that they're hedging risk and planning for 1 in 100 catastrophes. On the flip side, major hurricanes have bankrupted insurance companies and left property owners without the benifits they paid for. The two solutions I see are larger (more diversified) insurance companies or the government stepping in to regulate. * I have little faith that this is actually true

acchow 10y ago

Why would I invest in something knowing it will be really hard to find a greater fool?