More Worries

Pretty good prediction in my Apr.13 post that "big insurance"is getting the jitters. From NYTImes: "Swiss Re also modeled the economic impacts of a 3.2-degree increase by 2050, which it described as the “severe case” for temperature gains. If that happened, levels of wealth in Malaysia, the Philippines and Thailand would drop almost by half compared with a world with no climate change. The economy of Indonesia would be 40 percent smaller. India’s would be 35 percent smaller. The growing financial exposure of insurance companies to climate change is already having an effect on places at high risk. The United States government implemented a new pricing structure this month for flood insurance, which will mean higher costs for the most flood-prone homes. In California, homeowners in areas that are especially exposed to wildfires increasingly struggle to get insurance, prompting efforts by state officials to intervene. The Biden administration is expected to issue an executive order directing insurance regulators to assess the climate-related risks facing insurance companies." From the NYTimes April 20: — Under growing pressure from investors to address climate change, Exxon Mobil on Monday proposed a $100 billion project to capture the carbon emissions of big industrial plants in the Houston area and bury them deep beneath the Gulf of Mexico. Exxon, the largest U.S. oil company, wants to create a profit-making business out of the capture of carbon emitted by petrochemical plants and other industries. But its plan would require significant government support and intervention, including the introduction of a price or tax on carbon dioxide emissions, an idea that has failed to attract enough support in Congress in the past. These are contraditions that can only grow stronger and each week we will see the scramble for position get more and more frantic. The words "stranded assets" haven't cropped up yet but write-downs are inevitable as is a slump in the stock market. Then it gets interesting.