A Great and Good Man – by Bill McKibben – The Crucial Years

Source: A Great and Good Man – by Bill McKibben – The Crucial Years

+A mammoth and chilling piece from the Financial Times, which details how climate change could touch off a massive and essentially permanent version of the 2008 financial crisis.

It begins with the number of insurers pulling back from US states swelling from a stream to a flood, and not just in disaster-prone states such as California. Across the country, homeowners face soaring premiums or an inability to renew their cover as insurers confront a remorseless spate of wildfires, storms and hurricanes.

Cash-strapped governments try to plug the gaps with more last-resort insurance schemes. But these plans typically cost more and cover less, raising a chilling new reality for thousands of homeowners. The value of their family home, which had risen year after comforting year, instead begins to sink.

The contagion spreads because you need insurance to get a mortgage, so as property coverage fades, so does the presence of banks. In state after state, it becomes impossible to find a bank branch. Some lenders quit the mortgage business completely. A few begin reporting big losses.

And the US is not alone. Climate-driven upheaval intensifies abroad, rattling insurers, banks and property markets from southern Australia to northern Italy. In city after city, people find themselves living in homes worth less than what they had paid for them. Each monthly mortgage payment feels like throwing good money after bad. In a disturbing hint of past financial turmoil, mortgage defaults begin to rise, along with foreclosures and credit card delinquencies.

But this time, it’s different. Unlike other financial disasters, the underlying cause of this one is not financial, it is physical, and it is not clear how it will ever end.