Category: Business

bookmark_borderClimate Change: Inexplicable Consumer Behavior

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By Daniel Brouse
March 24, 2024

Climate change is primarily driven by the escalation of thermal energy affecting biogeophysical and socio-economic systems. While biogeophysical factors can be studied using math, physics, and historical records, socio-economic systems pose greater challenges due to the unpredictable consequences of human behavior and inexplicable consumer choices.

Inexplicable consumer behavior in the face of known consequences of anthropogenic climate change can manifest in various ways. Some examples include:

  1. Excessive Consumption: Despite awareness of the environmental impact of overconsumption, some individuals continue to engage in excessive buying behaviors, contributing to resource depletion, waste generation, and carbon emissions.
  2. Preference for Non-sustainable Products: Despite the availability of sustainable alternatives, some consumers may choose products with high environmental footprints due to perceived convenience, lower cost, or brand loyalty, ignoring the long-term consequences.
  3. Disregard for Energy Efficiency: Despite the availability of energy-efficient appliances and technologies, some consumers may prioritize other factors (e.g., aesthetics, initial cost) over energy savings, leading to higher energy consumption and greenhouse gas emissions.
  4. Single-Use Plastic Consumption: Despite widespread knowledge of the detrimental effects of single-use plastics on the environment, some consumers continue to use disposable plastic products excessively, contributing to plastic pollution in oceans and ecosystems.
  5. Inefficient Transportation Choices: Despite awareness of the environmental impact of fossil fuel-powered vehicles, some consumers may prefer inefficient modes of transportation (e.g., driving alone in gas-guzzling vehicles) over sustainable alternatives (e.g., public transit, biking, walking).
  6. Food Waste: Despite understanding the environmental consequences of food waste, some consumers may continue to waste food due to overbuying, improper storage, or disregard for expiration dates, contributing to greenhouse gas emissions from landfills.
  7. Fast Fashion Consumption: Despite awareness of the environmental and social impacts of fast fashion, including water pollution, chemical usage, and labor exploitation, some consumers continue to support the industry by purchasing cheap, disposable clothing.
  8. Reluctance to Adopt Sustainable Practices: Despite increasing awareness of sustainable living practices (e.g., recycling, composting, reducing meat consumption), some consumers may be resistant to change due to inertia, lack of knowledge, or perceived inconvenience.

These examples illustrate how consumer behavior can sometimes defy logic or go against the imperative of addressing climate change and environmental degradation. Addressing these behaviors often requires a combination of education, policy interventions, market incentives, and societal norms to encourage more sustainable choices.

The Age of Loss and Damage Brouse (2023)

Tipping Cascades, Social-Ecological Systems, and the Hottest Year in History Brouse (2024)

bookmark_borderShipping Pollution (Sulfur Emissions and Climate Change)

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by Daniel Brouse

There are several critical issues associated with marine fuel pollution used in international shipping. Shipping pollution is a global problem, spreading air pollution across the world. Historically, marine fuels have contained higher levels of sulfur due to the lower cost of lower-grade fuel oil. However, heavy fuel oil contains, on average, 2700 times more sulfur than road fuel. Sulfur in fuel leads to emissions of sulfur dioxide (SO2) and contributes to the formation of secondary particulate matter (PM), which is highly detrimental to both human health and the environment.

Acid rain is a consequence of chemical reactions initiated when compounds like sulfur dioxide and nitrogen oxides are released into the atmosphere. These substances can rise into the upper atmosphere, where they mix and react with water, oxygen, and other chemicals, forming more acidic pollutants known as acid rain. Acid rain, when absorbed by the ground, can dissolve essential nutrients like magnesium and calcium, crucial for the health of trees. Additionally, it releases aluminum into the soil, hindering trees’ ability to absorb water. This influx of chemicals also alters the chemistry of seawater, reducing its pH and capacity to store carbon. Ocean acidification, often dubbed “osteoporosis of the sea,” can erode the minerals essential for the shells and skeletons of marine life, including oysters, clams, lobsters, shrimp, and coral reefs.

Exposure to particulate matter (PM10 and PM2.5) poses numerous health risks, compromising respiratory and cardiac health. PM2.5, in particular, can deeply penetrate the lungs, causing inflammation and damage to lung tissue. Currently, approximately 7 million people die each year from exposure to particulate matter, with millions more experiencing severe health complications. Health impacts of air pollution encompass a wide range of ailments, including Alzheimer’s disease, asthma, bronchitis, cancer, cataracts, chronic obstructive pulmonary disease (COPD), dementia, developmental damage, emphysema, gastrointestinal disorders, heart ailments, heart attacks, immune system dysfunction, ischaemic heart disease, impaired brain development in children, kidney disease, liver disease, lung disease, premature death, pneumonia, nasal and upper respiratory tract health problems, neurological disorders, reproductive harm, respiratory system failure, skin diseases, and strokes.

The Restriction of Sulfur in Marine Fuel
In 2020, the International Maritime Organization (IMO) introduced regulations imposing strict limits on the sulfur content of marine fuels. These rules mandated a reduction in the maximum percentage of sulfur from 3.5% to 0.5% for all ships operating worldwide.

The restriction on sulfur in marine fuel has indirectly contributed to increased ocean surface temperatures. As sulfur emissions from marine fuels decrease, ships transition to cleaner fuels with lower sulfur content. However, these cleaner fuels often contain higher levels of carbon dioxide (CO2), a potent greenhouse gas. The increased CO2 emissions from ships burning cleaner fuels exacerbate global warming, leading to elevated ocean surface temperatures. This phenomenon underscores the broader impact of human activities on climate change, driving overall increases in global temperatures, including those of the Earth’s oceans.

According to a NASA-led analysis, global average sea level rose by approximately 0.3 inches (0.76 centimeters) from 2022 to 2023. When our paper, “Climate Change: Rate of Acceleration“, was authored in 2023, the swift acceleration of this trend was unforeseen. Initially projected to double over 100 years, the rate of sea level rise dramatically escalated, shortening the doubling period to just 10 years by 2020. Recent observations suggest a further compression of this doubling period to a mere 2 years, raising significant concerns. It is imperative to acknowledge and address this alarming trend, hoping it is not indicative of a new norm but rather an anomaly.

Sidd elaborated, stating, “I suspect this is linked to the large jump in sea surface temperature last year, perhaps due to the restriction on sulfur in marine fuel. The rapid warming and expansion of the ocean’s surface warrant close observation to determine if this trend is sustained.”

Health and Wellness
Humans will experience greater loss and damage to life and quality of life from air pollution, decreasing supply of potable water, extreme weather events, disease, and other adverse health outcomes The greatest short term climate change risk to human health is deadly humid heat (wet-bulb temperature).

The environmental changes and uncertainties associated with climate change can contribute to mental health issues, including anxiety, depression, and post-traumatic stress disorder (PTSD). Almost all survivors of climate-related disasters suffer from mental distress and experience PTSD. Of those who have not experienced climate disasters, over two-thirds of U.S. adults (68%) report having climate change anxiety.

* Our climate model employs chaos theory to comprehensively consider human impacts and projects a potential global average temperature increase of 9 degrees Celsius above pre-industrial levels.

The Human Induced Climate Change Experiment

bookmark_borderThe Sleeping Giant Rages Against the Ghost in the Machine Update

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by Daniel Brouse
March 23, 2024

You asked: I am terrified of what the summer will bring. Yet I also wonder if enough people suffer from out-of-control heat, might it wake up some sleepers? There aren’t enough people paying attention.

This is also a significant concern for me. Traditionally, we would expect to observe a slowdown in ocean surface temperatures during ENSO-neutral and La Niña phases; however, two primary factors may hinder this cooling effect:

  1. The unprecedented acceleration in ocean surface temperatures and sea level rise could counteract the upwelling of cool water typically associated with La Niña.
  2. The restriction on sulfur in marine fuel has indirectly contributed to increased ocean surface temperatures. When sulfur emissions from marine fuels are reduced, ships switch to using cleaner fuels that emit fewer sulfur compounds. However, these cleaner fuels often contain more carbon dioxide (CO2), a potent greenhouse gas.

PART II: Don’t Wake a Sleeping Giant

Regarding people waking up to the climate crisis:

  1. It seems that nothing can prompt the anti-woke to acknowledge the severity of the issue. For instance, Arizona experienced nearly two months of days with temperatures exceeding 110 degrees last year, with wet-bulb temperatures posing lethal risks for outdoor workers. Despite this, Arizona remains one of the strongest concentrations of climate deniers.
  2. If those who are currently unaware suddenly awaken en masse, the resulting panic and knee-jerk reaction could be equally harmful. We wrote a paper on this phenomenon in 2004 titled “The Sleeping Giant Rages Against the Ghost in the Machine.” The essence of the paper is that awakening the sleeping giant leads to panic, potentially resulting in harm to others.

The Human Induced Climate Change Experiment

bookmark_borderClimate Change and Homeowners’ Insurance

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by Daniel Brouse

A significant factor contributing to both increased costs and decreased availability of homeowners insurance is climate change. The surge in insurance costs is primarily driven by the unprecedented number of climate-related disasters. States like California, Louisiana, and Florida now heavily rely on government aid to manage the financial burdens associated with residential property insurance.

In 2023, the United States faced 28 separate weather and climate disasters, each costing at least 1 billion dollars, marking it as the year with the highest number of billion-dollar disasters on record. Single extreme weather events are also becoming more costly. Hurricane Ida alone caused an estimated $75 billion in damages, making it the costliest disaster of 2021. Insurers paid out a staggering $99 billion in claims related to natural disasters in 2022, leading to a substantial 21 percent increase in premiums from May 2022 to May 2023.

The rising premiums aren’t just a matter of cost; it’s also becoming increasingly difficult to find coverage, especially in disaster-prone areas. Major insurers are reconsidering where they underwrite policies, with some, like State Farm General Insurance Company, halting the acceptance of new applications for property insurance due to rapidly growing catastrophe exposure.

Government officials have acknowledged the link between the availability of homeowners insurance and climate change. Ohio Senator Sherrod Brown and US Treasury Secretary Janet Yellen have both highlighted the decline in insurance affordability and availability due to more frequent and severe natural disasters.

Even regions traditionally less prone to disasters are experiencing insurance challenges. The reinsurance market, influenced by events worldwide, impacts rates offered by insurers, subsequently increasing costs for homeowners.

In states like Louisiana, hurricanes such as Laura and Ida have severely impacted the insurance market, reminiscent of the aftermath of Hurricane Katrina. Flood insurance, overseen by FEMA, is facing significant challenges, with premiums expected to double for many policyholders under FEMA’s new rating system.

FEMA is actively seeking recommendations to modify flood risk assessment procedures to better reflect the evolving climate challenges. Their efforts aim to equip communities with better tools to handle the increasing risks associated with climate change.

Insurance Cost and Availability

Climate change is profoundly impacting homeowners’ and flood insurance costs and availability in several ways:

  1. Increased Frequency and Severity of Natural Disasters: Climate change is leading to more frequent and severe weather events such as hurricanes, floods, wildfires, and storms. These events result in higher insurance payouts due to increased property damage, leading insurance companies to raise premiums to cover their costs.
  2. Rising Sea Levels: As sea levels rise due to climate change, coastal areas become more prone to flooding and storm surges. This increased risk of flood damage prompts insurance companies to adjust their pricing models, often resulting in higher premiums for properties in flood-prone zones.
  3. Changing Risk Assessment: Insurers are reassessing risk models to account for the changing climate conditions. Areas once considered low-risk may now be reclassified as high-risk due to increased vulnerability to weather-related events. As a result, homeowners in these areas may face higher insurance premiums or even difficulty obtaining coverage.
  4. Reduced Availability of Coverage: In regions heavily impacted by climate change-induced disasters, insurance companies may reduce or withdraw coverage altogether. This can leave homeowners in high-risk areas struggling to find affordable insurance options, particularly for flood insurance.
  5. Government Intervention: Government-backed flood insurance programs, such as the National Flood Insurance Program (NFIP) in the United States, face financial strain due to increased claims resulting from climate-related disasters. This may lead to reforms in insurance programs, such as adjustments to premium rates or eligibility criteria, impacting homeowners’ access to affordable coverage.

Overall, climate change is exacerbating the risks and costs associated with homeowners’ and flood insurance, posing significant challenges for individuals and communities vulnerable to its effects.

How is All Real Estate at Risk From Climate Change?

Flood Insurance

bookmark_borderEnso-Neutral Not So Neutral

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by Daniel Brouse

The neutral phase of the El Niño-Southern Oscillation (ENSO) occurs when water temperature anomalies in the eastern and central Pacific range between 0.5 °C and -0.5 °C. During this period, neither La Niña nor El Niño conditions dominate, and it is sometimes humorously referred to as “La Nada”; however, ENSO-neutral is anything but neutral nor normal.

ENSO-neutral refers to a phase in the El Niño-Southern Oscillation (ENSO) cycle when neither El Niño nor La Niña conditions are present in the tropical Pacific Ocean. Climate change can influence ENSO-neutral conditions in several ways:

  1. Increased Frequency and Intensity of Extremes: Climate change can lead to more frequent and intense weather extremes, such as heatwaves, droughts, and heavy rainfall events, even during ENSO-neutral periods. These extremes can occur independently of El Niño or La Niña events and may be exacerbated by rising global temperatures.
  2. Shifts in Atmospheric Circulation Patterns: Climate change can alter atmospheric circulation patterns globally, affecting the behavior of the jet stream and other large-scale wind patterns. These changes can influence the onset, strength, and duration of ENSO-neutral conditions and may lead to shifts in regional weather patterns.
  3. Sea Surface Temperature Anomalies: While ENSO-neutral conditions are characterized by near-average sea surface temperatures (SSTs) in the tropical Pacific, climate change can contribute to overall warming of ocean waters. This background warming may influence the baseline SSTs during ENSO-neutral periods and can potentially impact weather patterns and ocean circulation.
  4. Teleconnections: Climate change can modify teleconnections, which are large-scale atmospheric linkages that connect distant regions of the globe. These teleconnections play a significant role in shaping weather and climate patterns during ENSO-neutral periods. Changes in teleconnections may alter the impacts of ENSO-neutral conditions on weather and climate variability in different regions.

Overall, while ENSO-neutral conditions may not directly result from climate change, the broader changes occurring in the climate system can influence the characteristics and impacts of these neutral periods. Understanding these interactions is essential for improving our ability to predict and adapt to future climate variability and extremes.

Atmosphere-Soil-Ocean Coupling:

  1. Teleconnections:
    • Chaos theory recognizes the concept of teleconnections, where seemingly unrelated events in one part of the Earth system influence conditions in another. For instance, changes in sea surface temperatures (linked to ocean dynamics) can affect atmospheric circulation patterns, leading to variations in precipitation and temperature on land.
  2. Climate Variability:
    • The complex interactions between soil, atmosphere, and oceans contribute to climate variability. Chaos theory helps to understand the sensitivity of the climate system to initial conditions and how small perturbations in one component can lead to significant and sometimes unpredictable outcomes.

In 2023, the world experienced an El Niño phase, which typically reduces hurricane activity. However, the climate pattern shifted towards La Niña in 2024. La Niña patterns often amplify the Atlantic hurricane season, particularly concerning when paired with months-long streaks of record warmth across the Atlantic Ocean.

* Our climate model employs chaos theory to comprehensively consider human impacts and projects a potential global average temperature increase of 9 degrees Celsius above pre-industrial levels.

How is All Real Estate at Risk From Climate Change?

The Human Induced Climate Change Experiment

bookmark_borderInvestments / Savings / Asset Allocation Update

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Investment Recommendation: I Bonds and T-Bills

One of the best investments is Treasury Direct I Bonds. I Bonds’ interest rates are determined by the rate of inflation.

I Bonds can be purchased directly from the Treasury Department without a middle man, brokerage, or bank. There is no risk of losing your principle investment. They are redeemable after 12 months with three months interest penalty. No penalty after 5 years. The maturity is 30 years. Tax reporting of interest can be deferred until redemption or final maturity. If you use the money for qualified higher education expenses, you may not have to pay tax on the earnings.

The bulk of 2023 new investments was in 4-week Treasury Bills. In 2024, the recommendation for younger investors shifted to a 10% holding in 2-year Treasury Notes. Those in or close to retirement age are better suited to remain fully invested in 4-week Treasury Bills.

Savings / Asset Allocation (< 50 years old)
66% Real Estate *
20% Stocks
10% Treasury Bills
2% Treasury I Bonds
1% Precious Metals / Crypto

Savings / Asset Allocation (> 50 years old)
66% Real Estate *
20% Treasury Bills
10% Stocks
2% Treasury I Bonds
1% Precious Metals / Crypto

* Why All Real Estate is at Risk

 

bookmark_borderCostly Disasters: Hurricanes

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By Daniel Brouse

In the United States, hurricanes stand out as the most financially burdensome type of climate-related disaster. While the number of disasters related to extreme weather events such as rain, hail, and wind, resulting in over a billion dollars in damage may be higher, the sheer magnitude of damage caused by a single hurricane surpasses them. For example, in 2023, there were 17 extreme weather events, each causing over a billion dollars in damage, but no hurricanes occurred. However, Hurricane Ida alone incurred an estimated $75 billion in damages, making it the costliest disaster of 2021.

In 2023, the world experienced an El Niño phase, which typically reduces hurricane activity. However, the climate pattern shifted towards La Niña in 2024. La Niña patterns often amplify the Atlantic hurricane season, particularly concerning when paired with months-long streaks of record warmth across the Atlantic Ocean.

Unfortunately, even scientists are failing to see (let alone forecast) the rapid acceleration in climate change. Due to their complexity, the impacts of the Domino Effect are being underestimated. Tipping points are Critical Milestones that directly impact the rate of acceleration in climate change by multiplying the number and intensity of feedback loops. The Domino Effect is also known as “tipping cascades” in climate science. Cascading impacts in relation to tipping points include cascading impacts across biogeophysical and social systems. Until recently, scientist have been drastically underestimating the social-ecological systems. The University of Exeter reports, “There is a notable lack of topic clusters dedicated to how humans will be impacted by climate-related tipping cascades.”

Previous climate models have inadequately incorporated “social-ecological systems” as human involvement was not a significant factor in past climate changes. Unfortunately, the United States ranks among the least prepared countries globally, with the highest percentage of climate deniers. The Republican party dismisses it as a manufactured crisis and plans to increase fossil fuel production, exacerbating the situation. Political extremists asserting that the climate crisis is manufactured employ an ironic term, considering that human manufacturing activities are the primary driver of climate change. Both political parties have concurred to allocate unlimited emergency funding for climate disasters instead of proactively preventing them. Last year, the US witnessed a record number of over a billion-dollar climate disasters, totaling 28 separate weather and climate-related events. It is due to this arrogance and ignorance that “worst-case scenarios” are now “best-case scenarios” for the acceleration of climate change. These factors have altered our climate model, shifting the projected maximum temperature rise from 4 degrees Celsius over the next millennium to a probable increase of 9 degrees Celsius this century.

* Our climate model employs chaos theory to comprehensively consider human impacts and projects a potential global average temperature increase of 9 degrees Celsius above pre-industrial levels.

How is All Real Estate at Risk From Climate Change?

The Human Induced Climate Change Experiment

bookmark_borderInflation Update: Auto Insurance

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by Daniel Brouse

In recent inflation reports, homeowners’ insurance, wages, and auto insurance have emerged as primary drivers contributing to the persistence of inflation. The inflationary pressures on auto insurance have been further exacerbated by two key factors:

1) Collision coverage: The prevalence of accidents caused by distracted driving, particularly due to cell phone usage, continues to rise. Distracted driving significantly impacts insurance premiums, as the heightened accident rate results in increased claims for insurers to process.

2) Comprehensive coverage: There has been a notable surge in weather and climate-related claims, including incidents such as floods, fires, hailstorms, and falling debris. These natural disasters contribute significantly to insurance claims, necessitating higher payouts from insurers.

How is All Real Estate at Risk From Climate Change?

bookmark_borderClimate Change, Inflation, and You

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Currently, a major contributor to inflation is the surge in homeowners’ insurance costs, propelled by the unprecedented number of climate disasters in 2023. California, Louisiana, and Florida are now dependent on government assistance to manage the financial burden of residential property insurance.

Flood insurance will become expensive and difficult to obtain.

NOAA: A historic year of U.S. billion-dollar weather and climate disasters

In 2023, the U.S. experienced 28 separate weather and climate disasters costing at least 1 billion dollars. That number puts 2023 into first place for the highest number of billion-dollar disasters in a calendar year and included:

  • 1 winter storm/cold wave event (across the northeast U.S. in early-February).
  • 1 wildfire event (firestorm destroying town of Lahaina on Maui Island of Hawaii).
  • 1 drought and heat wave event (focused across the central and southern U.S.).
  • 4 flooding events (in California, Florida, and across the eastern and northeastern U.S.).
  • 2 tornado outbreaks (across the central and eastern U.S.).
  • 2 tropical cyclones (Idalia in Florida and Typhoon Mawar in Guam).
  • 17 severe weather/hail events (across many parts of the country).

2023 was also deadly, causing at least 492 direct or indirect fatalities — the 8th most disaster-related fatalities for the contiguous U.S. since 1980.

* Our climate model employs chaos theory to comprehensively consider human impacts and projects a potential global average temperature increase of 9 degrees Celsius above pre-industrial levels.

What Can I Do?
There are numerous actions you can take to contribute to saving the planet. Each person bears the responsibility to minimize pollution, discontinue the use of fossil fuels, reduce consumption, and foster a culture of love and care. Be a butterfly and affect the world. The Butterfly Effect illustrates that a small change in one area can lead to significant alterations in conditions anywhere on the globe. Hence, the frequently heard statement that a butterfly in China can cause a hurricane in the Atlantic.

Here is a list of additional actions you can take.

How is All Real Estate at Risk From Climate Change?

bookmark_borderClimate Change Today

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By Daniel Brouse
March 23, 2024

We are aware that the average temperature increased by 1.2°C by 2022. Subsequently, the annual average temperature exceeded 1.5°C for the first time in January 2024. There is a substantial likelihood that if humans persist in emitting greenhouse gases at the current rate, the temperature will rise by 4°C within this century. Furthermore, in 2023, seven tipping points were surpassed, triggering a chain reaction of feedback loops. While the precise amounts of carbon and methane stored in nature remain uncertain, a conservative estimate suggests a temperature rise of 3-6 degrees is inevitable. This century is marked by an unavoidable and irreversible increase in sea levels. However, if we alter our behaviors, we could potentially cap the increase at 4-5°C and extend the timeline to the year 2300. Although we lack exact figures for the speed and severity, we possess a comprehensive model with numerous known variables. In essence, while acknowledging that challenges lie ahead, there is an opportunity for mitigation through substantial changes in our practices.

The Human Induced Climate Change Experiment