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SF Fed: Banks could stop lending in climate-threatened communities

4 points by mortenjorck 7y ago

nostrademons 7y ago
> Home values could fall significantly. > Banks could stop lending to flood-prone communities. > Towns could lose the tax money they need to build sea walls and other protections. That's exactly what should happen. If a city is about to be reclaimed by the sea, the very last thing you want to do is build more houses there. This incentivizes people to do the sensible thing - move away from areas that'll be hard hit by climate change - without compelling them to do anything or engaging in expensive unlikely-to-work boondoggles. The town'll die, but the people survive.
- gus_massa 7y ago
  Perhaps the best example is the effort to rebuild the flooded part of New Orleans after Katrina. I think it was important to help the victims, but it is also important to understand that building a major city under the sea level in a hurricane zone in dangerous. Sooner or later the walls will fail.
  - eesmith 7y ago
    It's also important to understand the role of negligent maintenance and improper design, as well as long-term decisions to prioritize commerce and profits over safety. Otherwise it's all too easy to point to the people affected by the floods, rather than the system which changed the risk factors. For example, you write "building a major city under the sea level". It's below sea level because "engineers accidentally sank half the city below the level of the sea" - https://www.theatlantic.com/technology/archive/2018/02/how-humans-sank-new-orleans/552323/ https://www.theatlantic.com/technology/archive/2018/02/how-h... > What was beginning to happen was anthropogenic soil subsidence—the sinking of the land by human action. When runoff is removed and artificial levees prevent the river from overtopping, the groundwater lowers, the soils dry out, and the organic matter decays. All this creates air pockets in the soil body, into which those sand, silt, and clay particles settle, consolidate—and drop below sea level.
- eesmith 7y ago
  Nothing incentivized the oil companies from doing the sensible thing and avert this human-caused global warming. Instead, the oil companies got all the profits. People in towns got all the risk, and may lose their houses and equity. That's how capitalism works, right?
cascom 7y ago
How should banks think about the risks of areas of the country that are prone to earthquakes/wild fires/mudslides vs flooding? What if areas that are prone to flood risk are disproportionately minority owned?

4 points by mortenjorck 7y ago

> Home values could fall significantly. > Banks could stop lending to flood-prone communities. > Towns could lose the tax money they need to build sea walls and other protections. That's exactly what should happen. If a city is about to be reclaimed by the sea, the very last thing you want to do is build more houses there. This incentivizes people to do the sensible thing - move away from areas that'll be hard hit by climate change - without compelling them to do anything or engaging in expensive unlikely-to-work boondoggles. The town'll die, but the people survive.

gus_massa 7y ago
Perhaps the best example is the effort to rebuild the flooded part of New Orleans after Katrina. I think it was important to help the victims, but it is also important to understand that building a major city under the sea level in a hurricane zone in dangerous. Sooner or later the walls will fail.
- eesmith 7y ago
  It's also important to understand the role of negligent maintenance and improper design, as well as long-term decisions to prioritize commerce and profits over safety. Otherwise it's all too easy to point to the people affected by the floods, rather than the system which changed the risk factors. For example, you write "building a major city under the sea level". It's below sea level because "engineers accidentally sank half the city below the level of the sea" - https://www.theatlantic.com/technology/archive/2018/02/how-humans-sank-new-orleans/552323/ https://www.theatlantic.com/technology/archive/2018/02/how-h... > What was beginning to happen was anthropogenic soil subsidence—the sinking of the land by human action. When runoff is removed and artificial levees prevent the river from overtopping, the groundwater lowers, the soils dry out, and the organic matter decays. All this creates air pockets in the soil body, into which those sand, silt, and clay particles settle, consolidate—and drop below sea level.
eesmith 7y ago
Nothing incentivized the oil companies from doing the sensible thing and avert this human-caused global warming. Instead, the oil companies got all the profits. People in towns got all the risk, and may lose their houses and equity. That's how capitalism works, right?

cascom 7y ago

How should banks think about the risks of areas of the country that are prone to earthquakes/wild fires/mudslides vs flooding? What if areas that are prone to flood risk are disproportionately minority owned?