David Burt claims that the changing climate will have significant adverse effects on the housing market in a similar manner to 2008 but much worse. Between 60 and 100 billion dollars worth of mortgages are issued every year for coastal homes. Much of the real estate in these coastal areas are mispriced as the risks are not fully realized. Within the next three decades, the Union of Concerned Scientists estimates that at least 311,000 homes will be at risk for flooding or total destruction due to rising sea levels. Additionally, since 2006 flood insurance policies have been decreasing.
David Burt states that "There’s a lot of parallels, it’s a big real estate mispricing issue. At its core that presents a lot of the same risks. A lot of real estate is massively overpriced and there’s a lot of risk associated with that and the big risk is another foreclosure crisis. Now, it’s a very different dynamic that’s creating the mispricing, but actually magnitude-wise it looks pretty similar, maybe even bigger."
What other sectors of the US economy may be faced with issues resulting from climate change?
https://www.marketwatch.com/story/climate-change-will-break-the-housing-market-says-david-burt-who-predicted-the-2008-financial-crisis-2019-11-01?mod=home-page
Numerous other sectors of the economy will be affected by climate change. These sectors include the livestock, forestry, and fisheries industries. Other sectors sensitive to climate change include the energy, insurance, tourism, and recreation industries.
ReplyDeleteClimate change is a hot topic on social media currently. People are considering how the livestock industry is affecting the climate. I wonder if the economy could take a hit as a result. Consumer choices and spending will change as more people are reducing their consumption of meat, however will it be a large enough drop in consumer spending to make a difference in the economy?
I agree that there will eventually be large changes in the food and livestock industry due to climate change as society pushes toward more efficient sources of food. In regards to the economy and consumer spending I too wonder what effect we would see. My first thought is that we might not see a real significant change in consumer spending at all. People will still be buying other products as substitutes for meat. Some industries will be forced to shrink or grow but I think consumer spending will be pretty constant.
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