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Here's a question for those of you with an investment mindset: The past two years have shown that we're more likely than not heading towards a climate collapse

Here's a question for those of you with an investment mindset: The past two years have shown that we're more likely than not heading towards a climate collapse. I see no serious reaction from the markets, which seem to be assuming a business-as-usual scenario economically. I find this extremely difficult to believe and I don't see people publicly talking about a future with dramatically higher food insecurity and just a higher baseline cost for existing. What's the deal? Just collective denial?

deleted 2y ago
[deleted]
sokoloff 2y ago
What’s the timeline you have in mind for a climate collapse? 50 years? 25 years? The typical DCF model of company earnings, at perhaps a 10% (low) discount rate, by 25 years out, those earnings are added at ~7% of nominal. At a 15% rate, they are 1.7%. 50 years out at 10% and 15% are 0.5% and 0.03%, respectively. Anything that happens far in the future will tend to be ignored by current equity markets.
- mbrumlow 2y ago
  We also have other things at play. If humanity is going to disappear then there is nothing for the markets to do. The money is only worth something if there are places to spend it and people to spend it on. So for the markets the best move is to ignore any pending world altering crisis as in the chance the crisis does. It happen or affect the market as much then the best move would have been to capitalize on the movement created by the crisis. Making moves in the market now creates a very real crisis for a potential one. If everything claimant alarmist or even the more mild climate concerned happens it’s not clear that it would affect the market as a whole. On top of this climate moves slow. In such any effect it could have on the market will also be slow allowing for it to adjust. Some losses here will turn into wins else where. Think about all the big companies that are no longer on the market because tech changed the world in ways that were arguably just as big as anything we can think of with climate except some big extreme life is all dead event, which in that case see the top paragraph.
jmclnx 2y ago
>What's the deal? Just collective denial? Yes, it will be denied until 1/3 of the US cannot be lived in safely. Then when people from the south start mass-migrating maybe things will change. :( And why water intensive manufacturing is locating in places like Texas and Arizona is beyond me. I hope when they can no longer operate there the Gov does not bail them out.
- Schiendelman 2y ago
  The government will definitely bailed them out. But they will also figure out how to recycle water. Not that it’s cheap, but it’s cheaper than other options like moving those facilities, likely. It’s hard to point to a particular thing that would be a “collapse”.
- anonfordays 2y ago
  >Then when people from the south start mass-migrating maybe things will change It won't be people from the South, it'll be people from the Southwest and California mass-migrating after they run out of water. >And why water intensive manufacturing is locating in places like Texas Do you think Texas is all desert? Huge swaths of Texas the size of other states get over 50 inches of rain a year. Plentiful high flow rivers all around make it a perfect place for water intensive manufacturing.
  - function_seven 2y ago
    > it'll be people from the Southwest and California mass-migrating after they run out of water. I've always assumed that the cost to build desalination plants along the coast would be peanuts compared to the costs of letting our water supplies dry up and force a mass migration of tens of millions of people. It won't exactly be cheap, but a lot cheaper than the alternative.
    - anonfordays 2y ago
      Only if the energy prices in California (highest in the continental US) come down and desalinization becomes less energy intensive. It may make sense to use desalinized water for human consumption, but likely won't be cheap enough for water intensive agriculture and manufacturing.
karmakurtisaani 2y ago
Insurance companies are already pricing climate disasters in their models and warning of significant costs from mitigating the damage. Markets probably are too short-sighted for that. Also, actuaries are modeling costs of for example hurricanes, which is "easy" to fit to climate framework. But to see how the climate problems reflect to, say, Nvidia stock price is much harder.
csomar 2y ago
It's more of a climate degradation than collapse. It'll be managed until it can be managed no more. But for now, it's manageable.

deleted 2y ago

[deleted]

sokoloff 2y ago

What’s the timeline you have in mind for a climate collapse? 50 years? 25 years? The typical DCF model of company earnings, at perhaps a 10% (low) discount rate, by 25 years out, those earnings are added at ~7% of nominal. At a 15% rate, they are 1.7%. 50 years out at 10% and 15% are 0.5% and 0.03%, respectively. Anything that happens far in the future will tend to be ignored by current equity markets.

mbrumlow 2y ago
We also have other things at play. If humanity is going to disappear then there is nothing for the markets to do. The money is only worth something if there are places to spend it and people to spend it on. So for the markets the best move is to ignore any pending world altering crisis as in the chance the crisis does. It happen or affect the market as much then the best move would have been to capitalize on the movement created by the crisis. Making moves in the market now creates a very real crisis for a potential one. If everything claimant alarmist or even the more mild climate concerned happens it’s not clear that it would affect the market as a whole. On top of this climate moves slow. In such any effect it could have on the market will also be slow allowing for it to adjust. Some losses here will turn into wins else where. Think about all the big companies that are no longer on the market because tech changed the world in ways that were arguably just as big as anything we can think of with climate except some big extreme life is all dead event, which in that case see the top paragraph.

jmclnx 2y ago

>What's the deal? Just collective denial? Yes, it will be denied until 1/3 of the US cannot be lived in safely. Then when people from the south start mass-migrating maybe things will change. :( And why water intensive manufacturing is locating in places like Texas and Arizona is beyond me. I hope when they can no longer operate there the Gov does not bail them out.

Schiendelman 2y ago
The government will definitely bailed them out. But they will also figure out how to recycle water. Not that it’s cheap, but it’s cheaper than other options like moving those facilities, likely. It’s hard to point to a particular thing that would be a “collapse”.
anonfordays 2y ago
>Then when people from the south start mass-migrating maybe things will change It won't be people from the South, it'll be people from the Southwest and California mass-migrating after they run out of water. >And why water intensive manufacturing is locating in places like Texas Do you think Texas is all desert? Huge swaths of Texas the size of other states get over 50 inches of rain a year. Plentiful high flow rivers all around make it a perfect place for water intensive manufacturing.
- function_seven 2y ago
  > it'll be people from the Southwest and California mass-migrating after they run out of water. I've always assumed that the cost to build desalination plants along the coast would be peanuts compared to the costs of letting our water supplies dry up and force a mass migration of tens of millions of people. It won't exactly be cheap, but a lot cheaper than the alternative.
  - anonfordays 2y ago
    Only if the energy prices in California (highest in the continental US) come down and desalinization becomes less energy intensive. It may make sense to use desalinized water for human consumption, but likely won't be cheap enough for water intensive agriculture and manufacturing.

karmakurtisaani 2y ago

Insurance companies are already pricing climate disasters in their models and warning of significant costs from mitigating the damage. Markets probably are too short-sighted for that. Also, actuaries are modeling costs of for example hurricanes, which is "easy" to fit to climate framework. But to see how the climate problems reflect to, say, Nvidia stock price is much harder.

csomar 2y ago

It's more of a climate degradation than collapse. It'll be managed until it can be managed no more. But for now, it's manageable.