Mid-August

Adaptation in context

With all the weather news this summer, it can be difficult to avoid catastrophizing.

Tomorrow, August 14, will be another day of extreme heat in Phoenix. July was unbearable, with its 31 straight days of 110F (43C)-plus temperatures. Surfaces in Phoenix just kept getting hotter all month. More than 300 people have likely already died this year in Phoenix from extreme temperatures, most of them homeless. Now another blast of heat is coming toward the city. This week's deadly Maui fire was an awful marker. Water temperatures in the Everglades continue to exceed 100F. NOAA says Atlantic storm activity is likely to be above normal this year, and has increased its prediction to 14-21 named storms of which 6-11 may become hurricanes. 

Today, Florida and the Lowcountry are blanketed by dangerous heat today, as is most of North Carolina, Georgia, Alabama, Arkansas, Texas, and Oklahoma, and all of Mississippi and Louisiana.

At the same time, stories about departures of insurance companies from markets they used to serve keep showing up. Bloomberg put out a story today headlined "Australia's Climate Risks Are Making Home Insurance Unaffordable," quoting Sharanjit Paddam of the Actuarial Institute: "Without insurance, households will struggle to recover from disasters and governments, taxpayers, charities and many informal means of support will be left to assist." The New York Times has published several pieces about insurers fleeing Florida and California over the last few months.

All insurance can do, all it is designed to do, is transfer risk from one institution to another. (Carolyn Kousky's marvelous book, "Understanding Disaster Risk," is essential reading.) Where risks are widespread and non-random, selling insurance against them becomes uneconomic. It doesn't make sense to think of private (or public) insurance as the answer to the increasing riskiness of living in very hot and storm-threatened areas. Even framing the issue in Paddam's terms ("households will struggle to recover from disasters") should begin to sound immoral.

These days, many accept that some unsheltered residents will necessarily broil on city sidewalks, because that is what happens when human bodies are exposed to extreme heat, and some lower-income housed residents will lose everything when tropical storms fueled by unbelievably hot ocean waters arrive in October and November. Surely we're capable of more imaginative thinking. 

The way to reduce the risk of living in risky locations is to invest in actual risk reduction, not just in transferring or repricing those risks. That investment is not going to be made in a way that benefits everyone by the private sector. That's not the private sector's job. Instead, it is the responsibility of all of us, through our governments, to re-imagine how and where we live. It's a huge, complex re-orientation that will take decades to carry out. 

It does feel as if this summer would be a good time to start.