Most educated people say climate change threatens disaster. The few sceptics are denounced as climate deniers. All governments are firm believers. This consensus was underlined last week when Cyclone Nilam hit India and Hurricane Sandy hit the US. Greens, journalists and politicians declared this was proof of climate change.
However, words are cheap, actions speak for themselves. Since global warming will raise sea levels and increase hurricane damage, the future of beachfront property and coastal cities should be bleak. People should be withdrawing to safety inland. But, people are rushing into coastal areas.
New York was swamped by Hurricane Sandy. Columnists wondered how New York and other US coastal cities would cope with rising seas caused by global warming, especially in the hurricane‐prone east coast and Caribbean coast. Yet, property prices keep rising unabated in these regions.
The Gulf of Kutch and Gulf of Cambay have the highest tides in India. Hurricanes cause the most damage when combined with high tides, since storm‐water cannot drain away. But are people and businesses fleeing these areas? No, industries, ports and cities are proliferating, including new port cities like Mundra, Pipavav, Dholera and Simar. Krishnapatnam and Kakinada are coming up in Andhra Pradesh. Maharashtra is getting new port cities at Jaigarh, Dighi and Dabhol. The list is endless.
And population is booming and property prices skyrocketing in all old coastal cities including Mumbai and Chennai. Beachfront properties are affordable only by millionaires.
So, people’s words suggest fear of global warming, but their wallets suggest no fear at all. What explains this duality? Greens complain that people are not sufficiently aware of climate change. But people who buy urban and beachfront property are not illiterates who haven’t heard of global warming. They are among the richest and savviest, the sort most likely to worry about climate change, not just as a global problem but as one threatening their investments in coastal industries, flats and beach resorts.
Can humans be so myopic that they ignore long‐term warming threats? No, if this were true, you would not have such a wide consensus on warming. Bloggers across the world say Hurricane Sandy shows a warming disaster is already upon us. The alarm of a thousand green blogs is hardly contested by sceptics. Yet, words of warning are not matched by withdrawal from the coast. Not even Al Gore, green Nobel laureate, is withdrawing from his coastal residence in Delaware. New Orleans was wrecked by Hurricane Katrina.
Residents know it can happen again, yet the city is being rebuilt. Neighbouring cities in the hurricane belt are booming. US population is shifting massively from north‐central states to coastal states, especially in the hurricane‐prone south. China too has seen a massive movement of people and investment to coastal cities in its hurricane belt.
Greens might argue that people expect the world to lick global warming by cracking down on carbon emissions and, hence, view coastal investments as safe. That’s implausible. The US refuses to accept the Kyoto Convention. China now emits more carbon than the US, and India is on the same path. All three are taking limited steps to check emissions, but none accepts a binding target, and none is even close to the truly drastic reductions that the IPCC deems essential for safety.
Intelligent investors know there is no political will for the necessary carbon cuts. Then why do they keep piling into coastal locations?
An important part of the answer must be that their belief in global warming is quite shallow, more political correctness than deep conviction. Yes, they see some danger. But they do not see it as dangerous enough to change their lifestyle and investment style.
In effect, they expect some adaptation to solve the problem, avoiding any drastic sacrifices. The world has always faced a hundred problems, and has often mitigated these through new technology and other forms of adaptation without necessarily solving them. Eco‐fundamentalists are opposed to adaptation to global warming: they want prevention. But prevention is costly, and lacks political will in key emitting countries. People are rushing into coastal cities: their wallets suggest they think adaptation will be enough even without drastic carbon cuts.
They have reason to be sanguine. Much of Holland is below sea level but it has adapted to cope. Pat Michaels of the Cato Institute shows that the sea level at Atlantic City has risen 16 inches in the last 100 years, more than the predicted rise in the next century by IPCC. Yet, Atlantic City has adapted so well that residents are scarcely aware of it. Surely Mumbai, Chennai and other coastal cities will adapt too.
Damage caused by hurricanes has risen stridently in the last 50 years. But that’s mainly because more buildings keep coming up in hurricane belts, covered by hurricane insurance. Weak construction collapses in hurricanes. But Bermuda experienced zero housing collapses even in a Category 5 hurricane because its building codes ensured hurricane‐proof construction. Such adaptation is expensive, but is cheaper than giving up coal. With luck, new technology will provide cheap solar energy, ending the emission problem. If not, adaptation will be a viable alternative.