Speaker 1: You're listening to the Bloomberg Opinion podcast count US Saturdays
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Speaker 2: Welcome to Bloomberg Opinion. I'm Amy Morris, and this week
Speaker 2: we are taking a look at the cost of climate
Speaker 2: change and how it's created some volatility with what is
Speaker 2: traditionally the safest of stocks. We'll also look at how
Speaker 2: fossil fuels are having a heartbreaking impact all the weight
Speaker 2: to the South Pole. But first we begin with the
Speaker 2: economic cost of an increasingly warmer planet. Natural disasters like
Speaker 2: deadly hurricanes and wildfires from Canada to Louisiana are tragic
Speaker 2: in terms of lives lost. Louisiana Governor John Bell Edwards.
Speaker 3: Nobody alive in Louisiana has ever seen these conditions. It's
Speaker 3: never been this hot, this dry, for this long.
Speaker 2: That is not to say we should dismiss the economic damage,
Speaker 2: which is often substantial. FEMA Administrator Diane Criswell says the
Speaker 2: Disaster Relief Fund can cover the wildfire disasters in Maui, Louisiana,
Speaker 2: and the hurricane damage in Florida.
Speaker 3: For now, if we continue to see more storms, we're
Speaker 3: going to continuously monitor very closely the health of the
Speaker 3: disaster Relief Fund to determine what more may be needed.
Speaker 3: But right now, as situation stands, the supplemental request will
Speaker 3: get us through the end of this fisical year.
Speaker 2: Let's talk about this with Bloomberg opinion columns Claudias som Now.
Speaker 2: Claudia is the founder of Some Consulting and a former
Speaker 2: Federal Reserve economist. She joins me, Now, Claudia, your column
Speaker 2: on the Bloomberg terminal minces no words. You actually call
Speaker 2: heat the silent killer. What do you mean by that?
Speaker 4: We can see on the news when there's a hurricane,
Speaker 4: a tornado, like it's very apparent heat is another extreme
Speaker 4: Heat is another natural disaster another way, and yet we don't,
Speaker 4: I mean, we don't see it, Like there's nothing on
Speaker 4: the news where you can say, oh, there's you know,
Speaker 4: ninety degree weather. Now this summer there was more. I mean,
Speaker 4: this was a really hot summer. So that's what they
Speaker 4: mean by a silent killer. You don't necessarily see it coming.
Speaker 2: Right because normally when we think of natural disasters, we
Speaker 2: think of the hurricanes, the wildfires, the storms, the flooding.
Speaker 2: We don't usually think of triple digit temperatures m hmm.
Speaker 4: And people do suffer from them and it's hard to
Speaker 4: get your work done. I mean, that's what the post
Speaker 4: is talking a lot about what it means for work
Speaker 4: and productivity in addition to the human costs like the
Speaker 4: silent killer.
Speaker 2: So let's get into that. How higher temperatures are actually
Speaker 2: impact in the economy. And the obvious answer, of course,
Speaker 2: is there's a lot of damage done by the wildfires
Speaker 2: and the hurricanes and the flooding. But you actually dig deeper,
Speaker 2: getting into the labor sector. Tell us about that, right well.
Speaker 4: And one reason to do this is I want to
Speaker 4: underscore the economic impacts the damage done are not just
Speaker 4: where the damage is done, right, So it's not just
Speaker 4: the rebuilding. It affects all of us because it makes
Speaker 4: workers less productive. It may, for example, farm workers that
Speaker 4: are trying to bring in the crops like they it's
Speaker 4: very difficult for them to do it. They have to
Speaker 4: shift the hours when they do it. Well, that shows
Speaker 4: up in our prices. They're higher, maybe there's less veture.
Speaker 4: So it's not just where the natural disaster happens, that
Speaker 4: the economic damages, it's all of us. It's spread all
Speaker 4: and again we don't see that. But that's a really
Speaker 4: important and that's what I wanted to say, is the
Speaker 4: economic cost of these disasters. We experience them too, right,
Speaker 4: they're everywhere. And again it's because in the same amount
Speaker 4: of time, when it's really hot, workers just they can't
Speaker 4: get as much done, or it's just or they can't
Speaker 4: do anything right because it is just too hot.
Speaker 2: So we're talking beyond the localized impact that you might
Speaker 2: see work folks who are like construction workers, let's say
Speaker 2: in Houston, unable to finish their day because it was
Speaker 2: dangerously hot, so they had to cut off early, or
Speaker 2: they had to modify their workday or what have you.
Speaker 2: That somehow from Houston will impact folks elsewhere beyond Houston,
Speaker 2: beyond Texas.
Speaker 4: Well. It adds to a housing crisis, so it pushes
Speaker 4: up the housing prices, maybe fewer people move there. And
Speaker 4: they say in other areas, I mean it's you know,
Speaker 4: for some industries, it's maybe harder to tell the story
Speaker 4: of labor productivity, but it's there. Again, we can't see it,
Speaker 4: and productivity is so important for not just economic growth,
Speaker 4: but that's really what we think of as the engine
Speaker 4: of our prosperity. Right, and if the extreme weather events
Speaker 4: are cutting into that, they are already cutting into that,
Speaker 4: let alone the fact that with climate change they will
Speaker 4: get worse.
Speaker 2: I want to get into that. I want to also
Speaker 2: look at some of the other sectors that might be
Speaker 2: struggling with this more than others. We've we've already mentioned agriculture.
Speaker 2: What else is out there along with because agriculture is
Speaker 2: really the most obvious one.
Speaker 4: Yeah, right, and it actually is one of these smaller
Speaker 4: groups of workers, Like they're very affected, but agriculture workers
Speaker 4: are not a huge part of the labor force, right,
Speaker 4: and so, but there are other industries in heat exposed industries,
Speaker 4: and in fact, if you add them all up, they're
Speaker 4: about twenty percent of the workforce.
Speaker 5: Right.
Speaker 4: So these and other examples would be communication, if you're
Speaker 4: out there putting up the telephone polls, you know, working outside.
Speaker 4: Transportation is another one which makes sense, and in fact,
Speaker 4: in the new union contract that UPS negotiated, part of
Speaker 4: their deal was air conditioners in the trucks.
Speaker 2: Right, right, That's that's exactly you at all that they know.
Speaker 4: Because this is part I mean human comfort, right, like
Speaker 4: you're driving around a ninety degree weather, and yet that's
Speaker 4: exactly an example of I mean, it was making them
Speaker 4: hard and miserable to do their jobs. So an air conditioner,
Speaker 4: well that has environmental effect like air conditioning, is not
Speaker 4: always the solution. But that was an example to me
Speaker 4: of AHA that they are trying to and will raise
Speaker 4: that productivity, right, because that's an example of a heat
Speaker 4: exposed sector. So those are communication, transportation, those are some
Speaker 4: of the construction, like you mentioned, those are some of
Speaker 4: the bigger industries that are heat exposed.
Speaker 2: And we are talking with Bloomberg opinion columnists Claudius Slam
Speaker 2: about how the heat is already showing up as a
Speaker 2: drag on economic productivity. Let's talk about the other demographics.
Speaker 2: Does it matter what your income is, Does it matter
Speaker 2: where you live?
Speaker 4: Absolutely another aspect of heat exposure, So it's not just
Speaker 4: when you're at work. There are there are real disparities
Speaker 4: in who is exposed, in where they live, the neighborhoods
Speaker 4: they're in. There was one study that estimated that in Washington,
Speaker 4: d C. There can be a seventeen degree difference across
Speaker 4: the city in terms of how hot it is, right,
Speaker 4: And that's I mean, that's enormous. And where that comes
Speaker 4: from is that that some areas of the city, particularly
Speaker 4: lower income areas of the city, are what are called
Speaker 4: heat islands. So the way the buildings are built, there's
Speaker 4: not a lot of trees there is, so there's not
Speaker 4: a way to you know, kind of absorb the energy.
Speaker 4: The heat it like bounces off and it's all in
Speaker 4: the neighborhood where in more affluent parts neighborhoods, there are
Speaker 4: more trees, there are solar like there are ways that
Speaker 4: really blunt the effect of the heat. Now it's hot
Speaker 4: there too, But again and by income, these huge differences
Speaker 4: in heat obviously mean that when it's hot outside, it's
Speaker 4: going to be even hotter in areas with low income.
Speaker 4: And these are areas they often don't have air conditioning,
Speaker 4: they don't have a way to really protect themselves from
Speaker 4: adverse effects of the heat.
Speaker 2: Like areas neighborhoods that may have more lawns, more shrubbery,
Speaker 2: more trees, are going to definitely see a difference in
Speaker 2: temperature than areas that are all asphalt and concrete.
Speaker 4: Right exactly, does.
Speaker 2: This also impact more social programs like education.
Speaker 4: Howso right, these are some of these studies are I
Speaker 4: think some of the most depressing. I mean, we're not
Speaker 4: just hurting labor productivity now, I mean workers' ability to
Speaker 4: do their jobs. Now, we are undercutting the productivity the
Speaker 4: ability to work and be prosperous of future generations. So
Speaker 4: there is study that shows in schools when it is
Speaker 4: hotter in the school, students' educational outcomes are worse. So
Speaker 4: and they measure this with you know, p s AT scores,
Speaker 4: SAT scores, So that's and and then in schools where
Speaker 4: it's cooler or they have air conditioning or you don't,
Speaker 4: you don't see these effects. So I mean it makes
Speaker 4: sense if you're in a hot, sticky room, being able
Speaker 4: to concentrate and do your work is difficult. Again, this
Speaker 4: is one where you see racial income disparities. And and
Speaker 4: again this is showing we're we're affecting the next generation
Speaker 4: like right now.
Speaker 2: So I want to end this on at least a
Speaker 2: hopeful note if there is one, because it is depressing
Speaker 2: and it's not going away, this isn't changing. Is there
Speaker 2: a solution? What do we do?
Speaker 6: Well?
Speaker 4: Big picture, the solution is you know, dealing with the
Speaker 4: rising heat, right, and these are these are problems that
Speaker 4: you know, national level. You know, we have part of
Speaker 4: the Inflation Reduction Act was to have a climate change policy,
Speaker 4: and those kind of policies have to be at the
Speaker 4: national level and frankly at the global levels. Right. So
Speaker 4: a real fix to this is big picture. There are
Speaker 4: areas of the country that have tried to put ordinances
Speaker 4: in place, plant more trees, various things to deal with
Speaker 4: the higher temper Like Phoenix is the hottest, hottest city
Speaker 4: in the country. They can't lower the temperatures, but they
Speaker 4: can take steps that will help the workers.
Speaker 2: Bloomberg Opinion columnists Claudia Som. Claudia is the founder of
Speaker 2: Some Consulting and a former Federal Reserve economist. She's also
Speaker 2: the creator of the Psalm rule, which is a recession indicator.
Speaker 2: Now coming up, we're going to continue this conversation from
Speaker 2: a different point of view, how climate change is actually
Speaker 2: upending traditionally dependable utility stocks. That's just ahead. You're listening
Speaker 2: to Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast. Catch us Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot Com,
Speaker 1: the iHeartRadio app, and the Bloomberg Business app, or listen
Speaker 1: on demand wherever you get your podcasts.
Speaker 2: You're listening to Bloomberg Opinion. I'm Amy Morris. Let's continue
Speaker 2: the discussion about climate change and its economic impact. Now
Speaker 2: we've talked about the cost of labor and the impact
Speaker 2: on agriculture, construction, manufacturing, even education and other heat exposed jobs.
Speaker 2: Now we're going to look at utilities. You know about
Speaker 2: lawsuits against Hawaii Electric after the wildfires in Maui and
Speaker 2: in Texas where a heat dome for much of the
Speaker 2: summer baked the state with triple digit temperatures, the power
Speaker 2: grid has been under considerable strain. Tom Overbye is with
Speaker 2: the Smart Grid Center.
Speaker 7: We have eight urban search and Rescue team teams staged
Speaker 7: ready to go, thirty three ambulance strike teams, fifty five
Speaker 7: hundred National guardsmen. We also have the Coastguard on standby
Speaker 7: should that be necessary.
Speaker 2: Let's talk now with Liam Denning, a Bloomberg Opinion columnist
Speaker 2: who covers energy and commodities. Liam, thank you for taking
Speaker 2: the time with us. The conventional wisdom has been for
Speaker 2: decades that utilities are the safe bet On Wall Street.
Speaker 2: Climate change seems to be upending that bring us up
Speaker 2: to speed.
Speaker 8: Well. The short story on that is that they were
Speaker 8: always seen as safe stocks because you know, if you
Speaker 8: think about what utilities do, they build and maintain essential
Speaker 8: infrastructure for a service that none of us can can
Speaker 8: do without. The reason they're peculiarly exposed to climate change
Speaker 8: is for the same reason their infrastructure, particularly in certain
Speaker 8: parts of the country, is very exposed to the sorts
Speaker 8: of natural disasters that are likely to become frequent and
Speaker 8: more intense less predictable due to climate change, And as
Speaker 8: we've seen in the recent case with Hawaiian Electric, they
Speaker 8: can also find themselves blamed for those natural disasters, particularly wildfires,
Speaker 8: where power lines get implicated in sparking them.
Speaker 2: Is there a possibility that it could forgive the terminology,
Speaker 2: but that it could somehow also help.
Speaker 8: It can up to a point if climate change demands
Speaker 8: that you strengthen the grid hard on it, maybe you know,
Speaker 8: do something like burying power lines in the ground in
Speaker 8: order to avoid wildfire risks, that sort of thing, then
Speaker 8: the utility will make a return on that investment. Where,
Speaker 8: of course it can go too far. Is that if
Speaker 8: you have a huge natural disaster that leads to extensive damage,
Speaker 8: leads to fatality and the resulting lawsuits from victims, then
Speaker 8: obviously the utility can be confronted with costs but simply
Speaker 8: overwhelm it. We saw this, you know, most famously with
Speaker 8: PG and E in northern California in the wildfire that
Speaker 8: happened there in twenty seventeen and twenty eighteen.
Speaker 2: Are we seeing more of that impact lately? And you've
Speaker 2: cited two examples, Maui and northern California, both of them
Speaker 2: with wildfire being the natural disaster. Are we seeing more
Speaker 2: of it lately? Are you expecting to see more of
Speaker 2: it lately?
Speaker 8: We've seen similar cases. We've seen We've seen a case
Speaker 8: involving Pacific Corp. Which is part of Berkshire Hathaway, relating
Speaker 8: to a fire in Oregon, and also Excel, which is
Speaker 8: a utility operating in Colorado. I think it's fair to
Speaker 8: say that, based on the track record of the last
Speaker 8: the five or so years, if you are a utility
Speaker 8: in a mountainous territory in the western US, in particular
Speaker 8: the drier parts of the US, then your risk of
Speaker 8: wildfire is elevated but those aren't the only places where
Speaker 8: you know climate change is likely to lead to more
Speaker 8: intense disasters. I mean, Florida obviously is no stranger to hurricanes,
Speaker 8: but those hurricanes are likely to get more intense over time.
Speaker 8: We've seen extreme weather events in Texas that took down
Speaker 8: the grid in early twenty nineteen. So my feeling would
Speaker 8: be that as climate change leads to less predictable and
Speaker 8: more intense weather impacts, that will have a disproportionate effect
Speaker 8: on infrastructure, particularly power grid infrastructure that was built for
Speaker 8: a different time. Remember most of our power grid built
Speaker 8: during the twentieth century. It's built at a time when
Speaker 8: we sure we had natural disasters, but we didn't really
Speaker 8: contemplate what something like climate change might portend.
Speaker 2: And we are talking with Bloomberg opinion columnist Liam Denning
Speaker 2: about the impact of climate change on what you know,
Speaker 2: conventional wisdom would call more stable stocks like utilities, But
Speaker 2: that's all changing now. Liam. You mentioned that this is
Speaker 2: bound to keep just getting worse, with more natural disasters,
Speaker 2: more wildfires. Can green grids help with this? The push
Speaker 2: towards smart grids green grids are they helping?
Speaker 8: You know? The long term mitigation effort against climate change
Speaker 8: is obviously decarbonization, so that involves using a lot more
Speaker 8: renewable energy, electrifying a lot more of our industrial and
Speaker 8: transportation processes over time. It's you know, that's kind of
Speaker 8: think of that as kind of your long term insurance
Speaker 8: plan against climate change getting much worse. In terms of
Speaker 8: more immediate fixes, distributed energy can can help I E.
Speaker 8: Use of things like micro grids, uh, you know, home
Speaker 8: and business cited energy systems can help you. You know,
Speaker 8: in the event that the grid goes down, you'll you'll
Speaker 8: be able to potentially supply your own power for a bit.
Speaker 8: Of course, a lot of those systems remain more expensive
Speaker 8: relative to the grid, but over time you may find
Speaker 8: communities paying that extra premium if they feel that they're
Speaker 8: exposed to the natural disasters that might take down their
Speaker 8: their local their local grid. To think of it as
Speaker 8: an insurance premium.
Speaker 2: How does this impact customers versus the companies?
Speaker 8: I mean, ultimately all of this cost comes back to
Speaker 8: the customers. You know. One thing you need to think
Speaker 8: about with regards to utilities is, you know, say you
Speaker 8: have a utility that is found absolutely liable for a
Speaker 8: major wildfire disaster, is confronted with a mass and bill
Speaker 8: that would force it, you know, to go into bankruptcy,
Speaker 8: as PGNE did. Now with a normal business, what happens
Speaker 8: is you go into bankruptcy. Generally the equity and a
Speaker 8: lot of the debt gets wiped out. The company emerges
Speaker 8: with a clean balance sheet, and it carries on utilities.
Speaker 8: The problem with the utilities is once you get through
Speaker 8: the initial shock and aftermath of a wildfire or other
Speaker 8: natural disaster, you still need to keep the lights on,
Speaker 8: which means you still need a functioning utility. The state
Speaker 8: has an interest in making sure that maybe equity holders
Speaker 8: and especially debt holders don't get wiped out, because once
Speaker 8: you're through that period, that company still needs to go
Speaker 8: back to capital markets. And so with PGNE, you had
Speaker 8: a very weird bankruptcy where it emerged with something like
Speaker 8: three times the debt it had going into it, and
Speaker 8: that was because they wanted to keep bondholder whole, and
Speaker 8: they found different ways of basically, you know, handling the
Speaker 8: costs of that disaster. But ultimately it all flows down
Speaker 8: into your electricity bill. It has to be paid for
Speaker 8: and it will end up jacking up the rates. And
Speaker 8: I think in a place like Hawaii, especially which already
Speaker 8: pays the highest electricity rates in the country, that those
Speaker 8: are going to rise quite a bit further. Climate change
Speaker 8: and the associated effort of decarbonization. These are things that
Speaker 8: just didn't really exist in a real sense, you know,
Speaker 8: thirty or forty years ago, certainly not in the minds
Speaker 8: of ourselves or in the minds of economists. And so
Speaker 8: that's effectively a new cost that's been put onto society,
Speaker 8: and it has to be paid for. They can be
Speaker 8: paid for broadly in two ways. One is paying for
Speaker 8: efforts to mitigate it or paying for the cost of cleanup.
Speaker 8: I would suggest that mitigating it is probably the better investment,
Speaker 8: but either way it has to be paid for.
Speaker 2: W Liam Denning a Bloomberg opinion columnist who covers energy
Speaker 2: and commodities and also a former investment banker. Now don't forget,
Speaker 2: We're available as a podcast on Apple, Spotify or your
Speaker 2: favorite podcast platform. Around parts of Antarctica last year, entire
Speaker 2: colonies of Emperor penguins lost all of the chicks that
Speaker 2: they'd incubated through weeks of darkness, one hundred mile per
Speaker 2: hour winds, and brutal sub zero temperatures. The US Fish
Speaker 2: and Wildlife Service has listed the emperor penguin as endangered.
Speaker 2: They depend on sea ice as a platform to breed
Speaker 2: and raise their chicks, but the ice is melting too
Speaker 2: early and the flocks of chicks lost all drowned. Let's
Speaker 2: find out what's going on. Fayflam As a Bloomberg opinion
Speaker 2: columnist who cover science and hosts the follow the Science podcasts.
Speaker 2: She joins me now, Fae, always a pleasure. Thank you
Speaker 2: for taking the time with me. Baby penguins. There's no
Speaker 2: way anybody can see the headline about baby penguins on
Speaker 2: the Bloomberg terminal and not go oh, I have to
Speaker 2: read about this.
Speaker 6: Yes, they are what people would call it charismatic species,
Speaker 6: you know, which sometimes is used in a good way
Speaker 6: and sometimes sort of a way to say, well, people
Speaker 6: pay too much attention to these ones that are cute,
Speaker 6: and we should pay attention to other species. So they're
Speaker 6: charismatic for good reason, because they're such interesting animals in
Speaker 6: so many ways.
Speaker 2: Now, how dire is this? And to be clear, your
Speaker 2: column isn't just about fossil fuels and baby penguins. That's
Speaker 2: just the hook. What you're talking about is the impact
Speaker 2: of climate change in global warming and man's role in
Speaker 2: that on species? Penguins just happen to be what's going
Speaker 2: on now?
Speaker 6: Yeah, that was just in the news, and it just
Speaker 6: made me think about this bigger philosophical question. You know,
Speaker 6: so often when we talk about endangered species, we talk
Speaker 6: about the potential use for humans. You know, maybe some
Speaker 6: rainforest plant have the cure for cancer, or disappearing frogs
Speaker 6: might have a chemical that's useful for medicine in their bloodstream.
Speaker 6: And you know, it sort of got me thinking, well,
Speaker 6: what about animals that may or may not be useful
Speaker 6: to humans? You know, should we care about them? And why?
Speaker 6: And I think that often is just something people feel
Speaker 6: intuitively but don't really think about that. Many of us
Speaker 6: are just singnituative. Of course we should care because they
Speaker 6: make the world a better place. So I thought it
Speaker 6: would be interesting to kind of open that discussion up.
Speaker 6: And I think even though a lot of people argued
Speaker 6: about the role of global warming, you know, there are
Speaker 6: lots of natural fluctuations that can affect penguin colonies, but
Speaker 6: there is you know, a huge scientific consensus that there
Speaker 6: is an overall trend warming trend that is caused by
Speaker 6: human activities, and that is causing the biggest changes at
Speaker 6: the polar regions of the planet.
Speaker 2: So how dire is this? Are penguins going extinct? Are
Speaker 2: other animals at risk?
Speaker 6: Yeah, I mean a lot of animals are going to
Speaker 6: go extinct in the next few decades if global warming
Speaker 6: sort of continues at the pace it's continuing, and some
Speaker 6: even if we, you know, change things, we'll go extinct.
Speaker 6: Emperor penguins. Actually, there are quite a few colonies that
Speaker 6: are still doing okay, that are in more stable regions
Speaker 6: of Antarctica, but if the trend continues unabated, they would
Speaker 6: eventually go extinct because they I mean, they're sort of contradictory.
Speaker 6: They're like the toughest animals you can imagine when you
Speaker 6: think about them spending this time, you know, and minus
Speaker 6: fifty degrees and the wind and they sit on they're
Speaker 6: out there incubating these eggs. But they're also delicate in
Speaker 6: a way because they depend on conditions being just so.
Speaker 6: They have to have the sea ice last through the winter.
Speaker 6: If it gets too warm and they lose the ice,
Speaker 6: then the chicks can get wet, and that's just deadly.
Speaker 6: Then you know, as one of the scientists that they
Speaker 6: turn to little ice cubes and hundreds of them can die.
Speaker 2: So how is this linked to the use of fossil fuels?
Speaker 2: Going to push back against you a little bit because.
Speaker 6: I mean it's all yes, that is the main you
Speaker 6: know main I when you talk about human activities and
Speaker 6: climate change, you know, that's the big one. There's also deforestation,
Speaker 6: you know, there there's methane, you know, there's the the
Speaker 6: cattle industry. But fossil fuels, that's the you know, that's
Speaker 6: the big one. That's the one that is putting the
Speaker 6: the you know, that's changed the amount of CO two
Speaker 6: in our atmosphere, and that uh is has been long
Speaker 6: predicted to cause global warming, and now we're really seeing
Speaker 6: the consequences in a way that people had predicted decades ago.
Speaker 2: What else are scientists noticing, Well.
Speaker 6: I mean, the the the polar regions have the biggest
Speaker 6: you know, are are showing the biggest changes. And you know,
Speaker 6: years ago people talked about polar bears and that was
Speaker 6: sort of the iconic species. And because the sea ice
Speaker 6: is melting in the Arctic and now you know that
Speaker 6: they're seeing some of the same kinds of changes in
Speaker 6: Antarctica that the polar regions, you know, are are warming,
Speaker 6: and there's this sea ice that is melting much earlier
Speaker 6: or not even ever forming. So that's you know, and
Speaker 6: that's a big consequence. There's also apparently the sea ice
Speaker 6: in the Antarctic region is important for the growth of krill,
Speaker 6: which are the you know, the little plankton at the
Speaker 6: bottom of the food chain, and if we lose a
Speaker 6: lot of those, that could actually cause a collapse in
Speaker 6: the populations of fish that people depend on for food.
Speaker 2: Now we're talking with Bloomberg opinion columnist Faith Lamb about
Speaker 2: how global warming may be exacerbating the elimination of baby
Speaker 2: penguins among other species. Now, Fay, Antarctica is definitely a
Speaker 2: brutal place, but it also seems like a unique gauge
Speaker 2: for the health of the planet.
Speaker 6: Well, I mean, yeah, it's and over time, you know,
Speaker 6: Antarctica has been it's been warm there, it's changed over long, long,
Speaker 6: long periods of time. But we're seeing changes that are
Speaker 6: really fast, and so animals that are adapted to that area,
Speaker 6: you know, these penguins have become adapted to it, and
Speaker 6: it's the things are changing. They're so fast that they
Speaker 6: just can't They're not going to be able to hold on,
Speaker 6: and they're seeing you know that these whole colonies depend
Speaker 6: on they to replace themselves. They have to raise a
Speaker 6: chick every year, and a lot of them die, and
Speaker 6: if they go too many seasons without producing enough offspring,
Speaker 6: then the whole colonies will disappear. So yeah, in some
Speaker 6: ways it is, you know, we're seeing the most extreme
Speaker 6: effects there, but we're seeing you know, we're seeing these
Speaker 6: effects all over the planet.
Speaker 2: Who cares if we lose a species? Why is that important?
Speaker 6: Yeah? That was something I just felt like wasn't a
Speaker 6: philosophical problem that we should all talk about because I
Speaker 6: think people sort of take for granted that, you know,
Speaker 6: people that think it's important just think that that species
Speaker 6: have a right to exist and make the planet a
Speaker 6: better place sort of take for granted that everybody feels
Speaker 6: that way, and some people don't. So I think that's
Speaker 6: a philosophical question that we should start talking about. And
Speaker 6: one of the books I think that was really influential
Speaker 6: that touched on that with Silent Spring by Rachel Carson,
Speaker 6: and she talks about how the world is just a
Speaker 6: lesser place without these wonderful sounds of birds in the spring,
Speaker 6: and that it's not trivial, it's not silly, it's not
Speaker 6: something that only silly people worry about. You know, this
Speaker 6: is and these changes can be permanent.
Speaker 2: Is their hope to reverse this? Can we slow it down?
Speaker 2: Where's the break? How do we put a brake on this?
Speaker 6: Yeah, there's still a lot of room. You know, there's
Speaker 6: still time to there's there's still you know, people look
Speaker 6: at these models and they're not perfect, but they can
Speaker 6: see the trajectory if we do nothing. They can see
Speaker 6: a different trajectory where it doesn't get as warm if
Speaker 6: we start to cut back. So there's certainly are ways
Speaker 6: if we made big changes in the next couple of decades,
Speaker 6: that we could see much less global warming. So there's
Speaker 6: a huge amount of room to make changes. I mean,
Speaker 6: there are a lot of complications there, but there is
Speaker 6: definitely it's not too late, it's not all in. A
Speaker 6: certain amount of warming is, as they say, baked into
Speaker 6: the system. But there's still a huge range of what
Speaker 6: could happen over the coming decades depending on how humans
Speaker 6: make changes in our sources of energy.
Speaker 2: Are you surprised at all, just on a personal level,
Speaker 2: the amount of data and information that you put out
Speaker 2: there in your columns on the Bloomberg terminal, and sometimes
Speaker 2: there are people who will not be swayed when it
Speaker 2: comes to global warming, and there's that pushback.
Speaker 6: Yeah, which is part of the reason I wanted to
Speaker 6: open up some of these deeper issues about why people
Speaker 6: care and why people should care, because I believe in understanding.
Speaker 6: I don't believe in demonizing people who disagree with you.
Speaker 6: I think that the only way we're going to move
Speaker 6: forward is to talk it out, not to have people
Speaker 6: screaming at each other and calling each other names, but
Speaker 6: you know, to acknowledge and try to find out why
Speaker 6: people feel so strongly that we shouldn't make changes, and
Speaker 6: that are you know, we're so polarized in this country
Speaker 6: and people are sometimes just picking that side because that's
Speaker 6: where their political tribe lies. But I think it's it's
Speaker 6: such an important issue that we should all be talking
Speaker 6: about why we care about it. And science can only
Speaker 6: tell you know so much. It can't it can't tell
Speaker 6: you what to care about, where to put your priorities.
Speaker 6: In some ways, that is a human decision.
Speaker 2: Faith Lamb is a Bloomberg Opinion columnist. She covers science
Speaker 2: and she is the host of the follow of the
Speaker 2: science podcast. Bloomberg Opinion continues as we wrap up our
Speaker 2: look at extreme weather and climate change and what we
Speaker 2: it might be facing in our own hometowns. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Opinion Podcast. Catch us Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot Com,
Speaker 1: the iHeartRadio app, and the Bloomberg Business App, or listen
Speaker 1: on demand wherever you get your podcasts.
Speaker 2: You're listening to Bloomberg Opinion. I'm Amy Morris. Extreme weather
Speaker 2: is coming to your town too. It's not just a
Speaker 2: question of if, but when and whether your property, your
Speaker 2: power grid, and your politicians are going to be ready
Speaker 2: for it. We welcome Bloomberg Opinion columnist Jessica Carl, author
Speaker 2: of the Bloomberg Opinion Today newsletter. She's got a whole
Speaker 2: chunk of the newsletter devoted to this. Now, Jessica tell
Speaker 2: us about the newsletter itself.
Speaker 5: Of course, it's called Bloomberg Opinion Today. It's a daily
Speaker 5: flagship newsletter for the opinion team. Has opinions on everything
Speaker 5: from business, economics, to politics, Technology, and it's delivered to
Speaker 5: your inbox every afternoon. I write it Monday through Thursday,
Speaker 5: and then we have a weekend edition as well. You
Speaker 5: can subscribe by going to Bloomberg dot com slash Opinion
Speaker 5: and you'll see a sign up bar on the right
Speaker 5: hand side.
Speaker 2: In the newsletter, you include information from the different columns
Speaker 2: that we've been talking about regarding climate change. You know,
Speaker 2: Los Angeles just saw its first tropical storm in eighty
Speaker 2: four years. Florida, Georgia, the Carolina is hammered by Hurricane Nadalia, Louisiana, Hawaii,
Speaker 2: Canada dealing with wildfires. There was that massive heat dome
Speaker 2: over more of the country than not. But there are
Speaker 2: still those folks who are completely unfazed, in part because
Speaker 2: they're not feeling the impact yet. What do you say, yes.
Speaker 5: I mean in a state like California where we saw
Speaker 5: Hillary it was a once in a lifetime type of
Speaker 5: tropical storm. Only two percent of homes in that state
Speaker 5: have flood insurance. So there are like huge lots of
Speaker 5: the country that just aren't accounting for these risks, which
Speaker 5: are becoming more veried. You don't know where these storms
Speaker 5: are going to hit you don't know, you know if
Speaker 5: it's going to be a snowstorm or wildfire or a flood,
Speaker 5: and it's just there are a lot of households that
Speaker 5: are ditching home insurance because it's becoming more expensive because
Speaker 5: of that risk. So it's just kind of snowballing and
Speaker 5: getting worse and worse in Florida. And only one in
Speaker 5: five Floridians has flood protection, which kind of gives you
Speaker 5: an idea. In a state where you're expecting floods, only
Speaker 5: one in five of them are covered.
Speaker 2: And you make the point in the newsletter that part
Speaker 2: of the problem is the flood map by FEMA is
Speaker 2: out of date. This is not good, this is critical.
Speaker 4: No.
Speaker 5: Yeah, And that flood map is insure. It hinges on everything.
Speaker 5: So lots of businesses it helps dictate their building standards,
Speaker 5: It helps dictate what, when and where people can build homes.
Speaker 5: And those flood maps are not forward looking at all.
Speaker 5: They're very much backward looking. And that's what insurans are realizing.
Speaker 5: They're playing this game of catch up. They're contacting their
Speaker 5: reinsurance to help them, which is why people are seeing
Speaker 5: their premiums rise in the double digits. Because you know,
Speaker 5: they're realizing that, oh, shoot, the maps that we've been
Speaker 5: using are not you know, accounting fully for the risk.
Speaker 5: They're actually undercounting it.
Speaker 2: So what's the government's role in this? The National Flood
Speaker 2: Insurance Program is part of this. Tell me about that.
Speaker 5: Yes, so it's a five decades old program, so it's
Speaker 5: existed for quite some time. Managed by FEMA, it's called
Speaker 5: the National Flood Insurance Program, and it's the primary source
Speaker 5: of flood insurance for over five million Americans and it
Speaker 5: expires actually on September thirtieth, which would be a great
Speaker 5: time for them to kind of reinvigorate this program and
Speaker 5: make it stronger. But what Congress has been doing ever
Speaker 5: since twenty seventeen is just reauthorizing it. They're not really
Speaker 5: improving it by much. So our colonist Jonathan Livin, which
Speaker 5: is one of the people that covers climate and insurance
Speaker 5: for US at Boomberg Opinion, he says that the government
Speaker 5: should stop with those short term things that actually strengthen
Speaker 5: it to make it better for homeowners, which part of
Speaker 5: that would be updating those flood maps and allowing homeowners
Speaker 5: and insurers to account for the risks which you know,
Speaker 5: would just the insurance fees wouldn't come all at once,
Speaker 5: they would be more gradual over time, which would allow
Speaker 5: that program to actually be sustainable, which it currently is not.
Speaker 5: And if they further build up their debt, that's just
Speaker 5: it's gonna all tumble down eventually, and it's not going
Speaker 5: to be good for the government or its coffers.
Speaker 2: So what is the guidance at this point? What do
Speaker 2: we do?
Speaker 5: I think the biggest thing homeowners are feeling the crunch
Speaker 5: of inflation all around them. But they shouldn't look at
Speaker 5: their insurance premium and go, oh, this is the time
Speaker 5: for me to just stop, you know, paying it and
Speaker 5: just ditch insurance, home insurance altogether, flood insurance. At least,
Speaker 5: they need to get used to those fees and build
Speaker 5: it into their budgets. I know that, you know, putting
Speaker 5: it on the consumer is not ideal, but and insurers
Speaker 5: are realizing that as well. And it's just an unfortunate
Speaker 5: price that we're gonna have to pay as the weather
Speaker 5: gets more extreme.
Speaker 2: Bloomberg Opinion columnist Jessica Carl is author of the Bloomberg
Speaker 2: Opinion Today newsletter. And that does it For this week's
Speaker 2: Bloomberg Opinion. We are produced by Eric mollow and you
Speaker 2: can find all of these columns on the Bloomberg terminal.
Speaker 2: We're also available as a podcast on Apple, Spotify, or
Speaker 2: your favorite podcast platform. Stay with us. Today's top stories
Speaker 2: and global business headlines are just ahead. I'm Amy Morris.
Speaker 2: This is Bloomberg