Close followers of the climate debate will surely be familiar with Munich Re, the reinsurer known for pessimistic, perhaps even alarmist, claims with regards to climate impacts. Roger Pielke Jr. fought against their wilder claims regarding storm damages and floods, until he was driven from the climate debate by hectoring alarmists from the climate activist community.
Roger, come back! The disease has spread from European insurers to European banks. UBS has released a report saying that climate change has inflicted a $1.4 trillion loss on the middle class between 1980 and 2014.
UBS claims that residents of cities at risk for climate change spend more on housing than people who live away from the risks of global warming.
Now, I suppose you could argue that people in Shanghai or Los Angeles spend that extra money on sandbags, portable generators and an annual subscription to The Wisdom of Michael Mann. And that seems to be what the report is arguing.
“In the US, middle class residents of high climate-change risk cities spend between USD 800 and USD 1,600 more annually on housing compared to a lower risk city. To compensate, middle-class households spend proportionately less on luxuries, entertainment and durable goods.”
There may be an alternative explanation, however. The cities at risk for climate change are almost exclusively coastal cities, like Los Angeles, Shanghai, San Francisco and Seattle. And people like to live in coastal cities. They like it so much that property owners get a better price for housing, allowing them to raise rents and sale prices. My home town of San Francisco has very high property prices and it has nothing to do with climate change and everything to do with software engineers moving into the city.
It is this level of thinking that has perhaps contributed to UBS’s rather checkered record. As Wikipedia tells us, these are the same guys that were caught destroying documents so they wouldn’t have to give money back to Jewish families who lost loved ones in the Holocaust. Perhaps UBS are the real deniers. UBS was fined $100 million for illegally transferring money to Iran while it was under a trade embargo. They were the guys sued in the landmark sexual harassment case, Zubulake vs. UBS Warburg.
They also paid a further $780 million in fines for conspiring to defraud the U.S. Internal Revenue Service, after being caught hiding who had offshore accounts. And they were the guys who lost $2.3 billion when one of their investment traders went rogue.
They also were fined $160 million in restitution, penalties and disgorgement of profits for rigging bids in the U.S. municipal bond market contributing to the Great Recession. In December 2012, UBS agreed to pay US$1.5 billion to settle a case filed by the U.S. Commodity Futures Trading Commission alleging that UBS engaged in a criminal conspiracy to rig the London Interbank Offered Rate (Libor) benchmarks used on loans via company’s Japan-based subsidiary. For currency rigging charges discovered in 2013, UBS paid US$800 million to American, British, and Swiss regulators.
Amazingly, I could go on with even more UBS scandals, but I think you get my point.
I wouldn’t listen to UBS about banking, let alone about climate change. They take once again an estimated total for all weather-related damages and deaths, attribute them all to climate change, ignore any other contributing factors and say the middle class is being hit with higher housing prices because of climate change. Despite the fact that there are no noticeable impacts of climate change to blame. Not storms. Not floods. Not drought. Not heatwaves. Not sea level rise.
Once again, they are crying wolf. Once again, there is no wolf. Once again, they are making it less likely that we will take the correct actions when (or even before, if we’re smart enough) the wolf actually arrives.
These are the people telling us about climate change?