
How Big Business Is Hedging Against the Apocalypse - enraged_camel
https://www.nytimes.com/interactive/2019/04/11/magazine/climate-change-exxon-renewable-energy.html
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1e-9
The title is misleading as the article doesn't really describe hedging. It
gives examples of various individuals and groups who are placing increasing
value on technologies and resources related to global warming. Their
investments naturally reflect their assessments, which is actually a good
thing. If global warming is happening, then price adjustments are needed to
encourage conservation, the search for alternatives, and the advancement of
needed technologies. This is a beneficial market mechanism where people are
incentivized to drive prices up or down based on their best prediction of the
future. The government's role should be to provide regulation, penalties, and
incentives to prevent conflicts between profit and the public's welfare. As
the article points out, the current government role in this area is haphazard
and largely unproductive. This situation will surely persist until there is
better political agreement on what is happening with our climate.

~~~
gridlockd
Global warming itself is an externality, it's not priced by the market. If you
buy into solar for example, you profit from the energy it produces (which is
disjoint from global warming) and/or from the price put on global warming by a
government. The developments are absolutely dependent on the ongoing doomsday
hype (the world ends in 12 years you guys!), not global warming itself.

The only thing that I can see the market re-pricing in regards to global
warming is land, i.e. you could buy some land in Siberia now because it will
be livable in the future. However, that future is so far away it doesn't make
sense to buy in this lifetime. Furthermore you could be shorting any business
that depends on a stable climate.

~~~
1e-9
There is an enormous number of portfolios that can be constructed to be highly
profitable if global warming becomes more widely accepted. There is no need
for an actual apocalypse to occur. There just needs to be an increasing
awareness that continuing on our current emissions path will lead to disaster
if allowed to continue. Those who accept this hypothesis, and invest
accordingly, will be helping to avoid an apocalypse. They are the ones who
will help drive down the value of things that contribute to global warming,
while driving up the value of things needed to combat it. If we are lucky,
this process will play out quickly enough that we can avoid irreversible
destruction of our environment. Governments could dramatically accelerate the
needed changes through appropriate incentives/penalties to make long-term
improvements/harms more profitable/unprofitable in the near-term.

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ryacko
The US government is aware.

[https://www.dni.gov/files/documents/Newsroom/Reports%20and%2...](https://www.dni.gov/files/documents/Newsroom/Reports%20and%20Pubs/Implications_for_US_National_Security_of_Anticipated_Climate_Change.pdf)

Scientists employed by the US government leaked drafts of a climate change
report out of fear of White House interference.

[https://www.vox.com/2018/11/26/18112505/national-climate-
ass...](https://www.vox.com/2018/11/26/18112505/national-climate-
assessment-2018-trump)

------
vonnik
I wrote a similar piece a few years ago:

[https://www.bloomberg.com/news/articles/2013-03-07/investors...](https://www.bloomberg.com/news/articles/2013-03-07/investors-
seek-ways-to-profit-from-global-warming)

There is no hedge against the apocalypse. But some people will create enormous
shareholder value during the runup.

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_bxg1
> We are, he says, in the midst of a historic period of mispricing. Because
> the global economy depends on hydrocarbons, practically every asset in the
> world relates in some way to oil and gas. Grantham believes hydrocarbons
> will be priced, or regulated, into submission. In light of that belief, not
> only oil companies’ stock but practically everything else on the market
> looks falsely inflated.

Good. Let their money burn.

~~~
D_Alex
Coal should be the starting point.

>Let their money burn.

Unfortunately, it will not be just "their money" if the economy has a hard
time weaning itself off oil and gas. It will be everybody's money, and
lifestyle.

~~~
plankers
Great, let our money burn. Will be worse for those with money to lose!

~~~
DubiousPusher
If only it were. Periods of economic upheaval fall much harder on the poor.

~~~
plankers
Bring it on, mate. Fucked is fucked, after a point all relativities are pretty
meaningless. It would be worth it to see Teslas being reposessed and vacancies
in SF high rises.

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z5h
So if your portfolio depends on the apocalypse, don’t you now have an
incentive in expediting it?

~~~
paulryanrogers
Only if you look forward to living through it, or your offspring suffering
more/sooner.

~~~
eleclady
Except the elite won't suffer.

~~~
jacobush
In times of upheaval, musical chairs will be played. As a group, the elite
stand little to gain from that.

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ForHackernews
If you're interested in this area, Oasis Loss Modelling Framework is an open-
source effort by the insurance industry to try and understand the risks
associated with climate change and other catastrophes:
[https://oasislmf.org/our-modelling-platform](https://oasislmf.org/our-
modelling-platform)

~~~
bernardv
Or Air Worldwide, or RMS, KatRisk, CoreLogic.

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bernardv
There is increasing recognition by institutional investors that climate change
risk is a factor which must be measured and managed. While there are
opportunistic trades to be had, the sheer volume of pension fund money slowly
shifting to de-risk will have significant impact on industry.

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Animats
How do I short Miami and New Orleans on a scale of 30 years?

~~~
781
You make a very big assumption - that people don't care about Miami, a city
with global name recognition and so on...

I also assume you are not on Instagram, where Miami is huge - it's the 6th
global instagrammed city, second US one (London, NY, Paris, Dubai, Istanbul,
Miami, LA) - [https://www.statista.com/statistics/655550/most-
hashtagged-c...](https://www.statista.com/statistics/655550/most-hashtagged-
cities-on-instagram/)

Instead of shorting it you might want to long "defending it".

~~~
hnmullany
It's going to be pretty hard to defend it. It's built on porous limestone. So
water's going to bubble up everywhere - not like defending NYC

~~~
joncrane
I think he means invest in seawall manufacturing companies, as opposed to some
bizarre financial instrument that allows you to profit from the demise of an
entire city.

~~~
_jahh
As parent mentioned Miami can’t be protected with sea walls because the
geology allows water to seep up and will drown the first floor of buildings
with any sea level rise

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ValleyOfTheMtns
"Chaos is a ladder." ?

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ovi256
>Last April, Texas consumed about 25.7 million megawatts of power.

The state of journalism today. Even the august NYT can't afford fact checkers
or editors any more.

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anm89
I see this dichotomy which is really sad to me where many people with really
good intentions who deeply care about the world just look at things like this
as an opportunity to take pot shots from the sidelines about how evil industry
and the capitalists are while thinking they are above it. They fail to
understand that they are playing the game of capitalism whether they agree
with it or not.

All the while the amoral(note I'm not saying immoral) players in finance and
industry(ie smart money) continue to clean house. And at the end of the day
it's really not their priority to look out for the environment (nor is it even
desirable to have environmental protection and regulations handled by
industry).

And so 150 years from now when we're in the Mad max future the compassionate
people will get to look back and say "i told you capitalism would destroy the
world" while failing to see that it was their responsibility to play the game
to make it better.

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swayvil
Capitalism destroys the environment by design. I mean the profit-and-loss
equation literally works out to "sacrifice everything". Check out the coast of
the Dominican Republic : [https://gfycat.com/mistyacrobaticbonobo-r-
sciences](https://gfycat.com/mistyacrobaticbonobo-r-sciences)

~~~
opportune
The reason you often see images like this in third world countries, but not in
first world countries, is that third world countries dump a lot of their trash
in waterways/the ocean compared to first world countries. Maybe you already
know this, but I think a lot of people see images like this as evidence of the
first world fucking over the third world when it's really a local problem.

~~~
blackoil
And, 1st world countries dump their trash in 3rd world countries. Also, they
ignore that there 1st world status is fueled by unsustainable development over
last couple of centuries.

~~~
massivecali
What third world company do we dump our trash in? AFAIK we sell it to them.

~~~
baroffoos
Recently these countries have blocked the import of the trash because it
absolutely destroys these countries. The "recycling" companies buy in
mountains of trash, pick out a few bits that are profitable and dump the rest
somewhere. Currently only a tiny part of recyclables actually gets recycled or
downcycled because the rest is cheaper to pull fresh resources out of the
ground.

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devoply
“we are seeing more opportunities than would have been there normally.”

Disaster capitalism at its finest. So the future in fact does look bright for
profiting off the collapse where there will be another huge transfer of wealth
to those with lots of capital laying around... from those who actually own
productive assets and manage them.

~~~
thatfrenchguy
Or the world will wake up and trial those people ?

~~~
nanaboo
can't wait for it to happen. Tzar Russia and the French Revolution all over.
except it won't be pitch and forks but high-tec weapons vs masses

~~~
ithkuil
Since the current world order is a result of those events, I'm not that sure a
power shift from an elite to another would solve anything else than just raw
hatred towards the privileged few of the day. I'm more inclined to think that
a more gradual and evolutionary approach to wellbeing and social justice can
be more effective.

~~~
pesmhey
Yeah, it was truly a power shift from landed aristocrats to bankers,
merchants, and lawyers. Poor people more-or-less stayed poor. And think of it,
the entire French Revolution juxtaposed with the Atlantic slave trade and
colonialism.

I think you’re right. Progress is a marathon, every minute, every day. And
it’s slow.

