Wednesday, November 23, 2011

"All Ways are My Ways!"

This past Sunday, Paul Krugman had an op-ed piece distinguishing between technocrats and ideologically driven "impractical romantics."
 They are, to be sure, a peculiarly boring breed of romantic, speaking in turgid prose rather than poetry. And the things they demand on behalf of their romantic visions are often cruel, involving huge sacrifices from ordinary workers and families. But the fact remains that those visions are driven by dreams about the way things should be rather than by a cool assessment of the way things really are.
How timely then, that a new round of emails from the University of East Anglia have  flooded the internet.  Depending on who you role with, the way the emails are sorted and searched varies.  But, there is something there for everyone.

For me, there is climate change and insurance.

What may not be incredibly obvious is that the IPCC and the insurance (and banking) industry are chummy.  Both work through the UNEP.  The IPCC defines and characterized the climate risk and the UNEP-Financial Initiative commodifies it.  It's been going on for awhile and is now quite a big business.  As I was in the midst of teenage angst when the groups "joined forces" (a term on the the UNEP website, at least at one point) and sought to establish a financial market around climate change, I'm a bit late on the bandwagon.  Nonetheless, from what I can tell, the relationship presents significant problems.

First and foremost, evolution of scientific understanding is linked to and constrained by financial markets.  The opinion that the IPCC has of the state of the science effects the risks available to the insurance industry.  So, for example the IPCC cannot become of the opinion that climate change is not affecting disaster losses. If it does, the market tanks. No worries though, because there are plenty of impractical romantics high up on the IPCC list that are all too happy to "redefine what the peer-review literature is!"   I will take a guess that this relationship is in part why the wording about floods and hurricanes changed from the draft of the summary to the final summary.  In the draft, it was suggested that there was no link between damages and climate change.  In the final, it suggested that while no link is evident it need not suggest that one does not exist.

Beyond mere financial interests it appears that those who speak on behalf of the insurance industry and our our abilities to adapt to climate change risks have personal political agendas as well. For instance, a review editor of the part of the SREX report has a clear professional goal to rid the world of alternative views, would be good to show the sceptics up in the naked daylight for the charlatans they are!
...I want to do my bit in sweeping the sceptics out of insurance (as far as possible!)   

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