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In 2008, the American dream of homeownership morphed into a nightmare that tanked the global economy. The culprit? A toxic mix of bad mortgages and casino mentality. Today, another financial time bomb is tickingand this one is fueled by rising seas, wildfires, and a lethal dose of denial. Climate change is quietly corroding the foundations of the U.S. housing market. From Floridas hurricane-battered coasts to Californias fire-razed suburbs, a crisis is brewing that could make the subprime mortgage collapse look like a warm-up act. The crisis will be triggered by home insurance. To get a mortgage, you need homeowners insurance. But in climate-vulnerable Sunbelt states like California and Florida, insurers are either fleeing or increasing premiums to eye-watering heights. In some areas, home insurance costs have doubled or tripled in just three years. In others, policies are vanishing altogether. Meanwhile, in a stunning irony, the top 16 U.S. insurance companies hold more than $500 billion in fossil fuel investmentscollecting premiums with one hand while funding the climate disasters that force them to pay out with the other. Homeowners on the hook Current homeowners and retirees are sitting ducks. Florida, Arizona, and Texas lure seniors with sun and tax breaks, but fixed incomes cant absorb climate chaos. In Arizona, home insurance premiums have surged by 62% since 2019 driven by wildfire risks. Texas has seen rates climb by 40% since 2015, as hurricanes and other climate-driven disasters batter the state. Imagine a retiree watching their insurance premium spike from $7,500 to $17,000 overnight. Florida retirees spend 34% of their average income on home insurance. (Nationally, retirees pay 8% of their income toward home insurance.) Their options are grim: Drain savings, sell, default, or, for those who own their homes outright, go bare, skipping insurance entirelya risky bet that leaves them one disaster from devastation. Multiply that by millions of people, and you get a fire sale of homes, crashing property values, and ghost towns of stranded assets. A 2023 study found that U.S. properties exposed to flood risk are overvalued by $121 billion to $237 billion. Local governments will feel the squeeze like never before. Florida funds schools, roads, and police forces via property taxes. Paradise, California, which was ravaged by wildfire in 2018, wiped out 90% of its property tax base and almost all its local revenue. What happens to a city when its tax base collapses? Detroit offers a cautionary tale here. The Motor Citys population plunged from a peak of about 1.8 million in the 1950s to barely 700,000 by 2010 as jobs vanished and residents fled. Detroit spiraled into the largest municipal bankruptcy in U.S. history. Streetlights literally went dark; entire neighborhoods were abandoned. Unlike Detroits industrial decline, a future trigger would be natural calamitybut the end result (a city unable to pay its bills) could look eerily similar. Could Miami or New Orleans face a similar fate? Subprime mortgages are back And lets not forget the banks: Theyre sitting on trillions in mortgages tied to homes that could soon be uninsurable, unlivable, or underwater (literally). The 2008 subprime crash taught us that if homeowners default en masse, the contagion can spread through mortgage-backed securities and derivativesexcept this time, it’s not bad borrowers but uninhabitable land driving a similar chain reaction. In the 2000s, lenders treated subprime mortgages like an all-you-can-eat buffet, convinced home prices would only rise. Today, lenders cling to the fantasy that climate risk is manageable or priced in. Spoiler: Its not. Research from McKinsey reveals that even as insurance companies acknowledge climate risks, they haven’t meaningfully integrated these same risks into their investment strategies or mortgage underwriting practices. This cognitive dissonance mirrors the 2008 crisis, when rating agencies slapped AAA ratings on what were essentially junk securities. As storms intensify and wildfire seasons lengthen, mortgage defaults will surge. And guess whos holding the bag? Taxpayers, via Fannie Mae and Freddie Mac. Just like in 2008, savvy mortgage originators are quietly dumping risky mortgages onto government-backed entities, making you, the taxpayer, the ultimate insurer of Americas climate delusion. Sprawling suburbs in floodplains, McMansions in fire corridors, and regulatory blind spots have created a Ponzi scheme of climate risk. Heres the kicker: Theres little chance climate risk will be containedto borrow Ben Bernankes famously off-the-mark reassurance about subprime. The financial contagion will spread rapidly across markets because climate-vulnerable mortgages, like subprime loans before them, have been bundled, securitized, and distributed throughout the global financial system. How to mitigate the disaster So, whats the fallout when this bubble bursts? Retirees forced out, cities bankrupted, banks bailed outits 2008 with a side of rising oceans. The lesson from subprime was simple: Denying reality doesnt erase risk; it just guarantees a harder crash. The looming crisis isnt a mystery, and neither are the solutions. We can take steps right now to defuse this climate housing bubble before it pops. First off, policymakers can require far greater transparency about climate risks. Homebuyers have the right to know if that bargain beachfront cottage is likely to floodyet shockingly, states like Florida (with some of the highest overvaluation) do not require sellers to disclose flood risk to buyers. Mandatory disclosure laws for flood, fire, and heat risks would inject some reality into pricing and steer some people out of harms way. Next, we need to end perverse incentives that encourage building and rebuilding in disaster zones. For decades, the federal governmentvia cheap flood insurance, disaster aid, and infrastructure spendinghas socialized climate risk, effectively footing the bill for risky development with taxpayer money. The National Flood Insurance Program, for example, historically charged below-market rates and racked up $20 billion in debt, requiring repeated bailouts. Its now moving toward risk-based pricing, which is painful for homeowners but absolutely necessary to signal where its safe (and not safe) to build. Similarly, officials could tighten zoning and building codes in high-risk areas, or even prohibit new construction in the most exposed floodplains and fire zones. (As one former director of the Federal Emergency Management Agency bluntly suggested: Stop writing government-backed insurance for brand-new houses in flood zones). In parallel, banks and regulators must get serious about integrating climate risk into lending decisions. That could mean requiring robust insurance coverage (beyond the minimal standards) on mortgaged homes, adjusting loan-to-value ratios or loan terms in ultra-risky areas, and incorporating climate data into underwriting models when valuing mortgage portfolios. Fannie Mae and Freddie Mac, in particular, should lead by not purchasing loans on obviously doomed properties. Why extend a 30-year mortgage on a house that may be underwater (literally) in 20? On the community level, we need to shore up climate resilience to protect home values: stronger levees and hardened grids, yes, but also difficult conversations about strategic retreat. In some places, the safest plan is to help people move now, rather than rebuild for the fifth time after a disaster. Policymakers can create funds for voluntary buyouts and relocations to get vulnerable families into safer housinga managed retreat thats humane and ahead of the curve. None of this is easy or cheap. But the alternativemaintaining our current courseis far more costly. The 2008 crash taught us that unheeded risk in housing markets can bring the entire economy to its knees. We have an opportunity today to prevent a replay, this time driven by climate rather than credit. It will require political courage, sober risk management from lenders, and, yes, higher costs up front in some cases. But proactively pricing in climate risk (and mitigating it where possible) is like preventive medicine. It might sting now, but it will save us from far greater pain down the road. The housing collapse of 08 wiped out $7 trillion in homeowner equity and ravaged communities; a climate-induced collapse could be even worse if we do nothing. Will policymakers and lenders act before Miami becomes Atlantis and Phoenix a blast furnace? Or will they keep chanting the same mantrahome prices only go upuntil the levees break, literally and financially? Times up. The waters rising. And this time, theres no bailout big enough.
Category:
E-Commerce
The Army Corps of Engineers, citing a recent national energy emergency order by President Trump, has expedited a permit review for a new miles-long section of an oil and gas pipeline that would bore deep into protected wetlands bordering Canada and the United States. The pipeline request from Enbridge Energy, a Canadian company, would cut beneath the Straits of Mackinacthe connecting waterway between Lakes Michigan and Huronto install a tunnel 12 times as wide as above-ground existing pipelines. Tribal groups that had been cooperating with the Corps environmental impact statement for the project pulled out when they learned of the emergency review. The Corps announced April 15 that the project, known as Line 5, fits under Trumps January order. The project is part of a 645-mile pipeline between Superior, Wisconsin, and Sarnia, Ontario, that transports about 22 million gallons of oil and natural gas liquids daily, according to the company website. [Photo: Cole Burston/Bloomberg/Getty Images] The Corps decision to expedite consideration came days before a sweeping change by the U.S. Department of Interior to hasten energy reviews. The federal agency said beginning April 23 that energy-related projects and, specifically, environmental impact reviews of such projects will move with unprecedented speed and with truncated public comment. Energy, under Trumps order, refers to fossil fuels such as oil, gas, and coal, along with geothermal, nuclear and hydropower. The Corps operates within the Defense Department, not the Interior Department. While the Interior policies do not apply to Line 5, they are likely to accelerate fossil fuel projects in the coming months. New emergency procedures from both departments in response to Trumps executive order are really ploughing new ground, said Dave Scott, a senior attorney at the Environment Law & Policy Center, a legal advocacy group. There is a massive and real risk that the public wont be able to engage meaningfully with decisions that government agencies like the Corps are making that have significant impacts on the environment, Scott said. The Interior Department announced last week it was pursuing what it called an alternative National Environmental Policy Act, to allow for sharply compressed timelines for projects that strengthen domestic energy supply. Projects that require an environmental assessment, which the department said now takes a year to complete, will be reviewed within 14 days. Projects in need of an environmental impact statement, which the department said can result in two years of study, will be reviewed in roughly 28 days, according to its announcement. Scott also noted a second executive order, Unleashing American Energy, further erodes environmental protections for new projects. It directs the Council on Environmental Quality to consider rescinding National Environmental Policy Act regulations, which are the rules that require federal agencies to consider environmental impact when issuing permits. Environmental groups have questioned the need and the rationale behind the pipeline change. We know that there is no national energy emergency, said Julie Goodwin, senior attorney at Earthjustice, the countrys biggest public interest environmental firm. The U.S. produces more crude oil than any other country, ever, and has for the past six years. The emergency process is really a gift to the fossil fuel industry, Goodwin said. At issue is Enbridges replacement of two 20-inch diameter pipelines now buried close to shore and resting or supported on the lakebed. Instead, it wants to dig a 3.6-mile-long tunnel, with a 21-foot diameter, into the Straits lakebed. [Image: Paul Horn/Inside Climate News] The Corps is still developing an environmental impact statement for the Straits project, which it acknowledges will permanently impact 1.52 acres of wetlands, including 1.01 acres within the Corps responsibility under Section 404 of the Clean Water Act. The statement is expected in June. The Detroit District has not yet determined the length of the public comment period for its Line 5 Tunnel, the Corps said in an email. The standard comment period is 60 days, but the Corps new policy for emergency reviews is 15 days. The Interior Department announcement last week may indicate a new public comment timeline in store for energy-related projects. In some cases, public comment at Interior would depend largely on the decision of department officils. Proposals found to have no significant impact during an internal department assessment will have a report issued on a public website, the announcement said, and no public comment is required. For projects likely to have significant environmental impact, a department official can determine the duration of the written comment period based on the nature of the action and the urgency of the emergency response, and the Department anticipates that most comment periods will be approximately 10 days, Interiors announcement said. Regarding the pipeline project before the Corps, seven local tribes described the shortened environmental impact statement (EIS) process as unacceptable. A letter was sent in March to the Corps and signed by representatives from the Bay Mills Indian Community, Little River Band of Ottawa Indians, Sault Ste. Marie Tribe of Chippewa Indians, Grand Traverse Band of Ottawa and Chippewa Indians, Match-E-Be-Nash-She-Wish Band of Pottawatomi, and Nottawaseppi Huron Band of the Potawatomi. Tribal Nations are no longer willing to expend their time and resources as Cooperating Agencies just so their participation may be used by the Corps to lend credibility to a flawed EIS process and document, the letter said. The Corps has disregarded its commitments to cooperating agencies and its obligations under the National Environmental Policy Act by fully aligning itself with the applicant [Enbridge] at every step. The emergency review process is really rewriting and bypassing critical and important laws for an unneeded pipeline, said Beth Wallace, director of climate and energy at the National Wildlife Federation, the nonprofit conservation education and advocacy group. Enbridge has said the existing pipes, which date back to 1953, need replacement to prevent a possible oil spill. Burying the new pipeline section as much as 100 feet below the lakebed would eliminate the chance of a pipeline incident in the Straits, according to the project website. Line 5 is critical energy infrastructure, Enbridge said in an email to Inside Climate News. The tunnel project is designed to make a safe pipeline safer while also ensuring the continued safe, secure, and affordable delivery of essential energy to the Great Lakes region. On its website, the company called its supply to Michigan vital and said that Line 5 supplies 65% of propane demand in the Upper Peninsula, and 55% of Michigans statewide propane needs. Tribal groups, citizens, and environmentalists have called for decommissioning the pipeline out of concern for risks to freshwater sources and local ecosystems. The Great Lakes are the largest freshwater system on the planet, providing clean drinking water to more than 40 million people in the U.S. and Canada. Enbridges own pipelines have capacity to pick up product and move it to the same exact refineries and facilities, said Wallace of the National Wildlife Federation. Investing further in fossil fuel infrastructure also runs counter to Michigans plan to reach 100 percent carbon neutrality by 2050, she added. An economic analysis by PLG Consulting, a Chicago-based logistics firm, examined how shutting down Line 5 could impact energy markets. Surging output has made North America energy independent and there is no risk of supply shortages, the PLG report from October 2023 found. There are a multitude of alternative supply sources from both domestic and international sources that could fill in for Line 5. Even today, no refinery relies entirely on Line 5 for its crude oil supply, the PLG report said. Enbridge is still waiting on several federal and state permits before it can begin construction. The state of Michigan issued environmental permits for the tunnel project in 2021 but those will expire next year. Enbridge re-applied earlier this year to renew the permits. The Michigan Public Service Commission approved the tunnel project in 2023 although Enbridge still needs the permitting decision from the Army Corps. The activist group Oil and Water Dont Mix is also urging citizens to demand that Gov. Gretchen Whitmer deny the pipeline permit to protect the Great Lakes. The state of Michigan has the opportunity to shut down Line 5, Earthjustices Goodwin said. And thats what should happen. By Carrie Klein, Inside Climate News This article originally appeared on Inside Climate News. It is republished with permission. Sign up for its newsletter here.
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E-Commerce
What happens when someone comes close to death and then returns to everyday life, including work? For some, the experience can be transformative. Near-death experiences (NDEs) are deeply personal experiences that some people report after a close brush with death. These experiences can include sensations such as floating above ones body, reviewing moments from ones life, encountering spiritual beings and feeling a profound sense of unity and love. Although NDEs have been studied since the 1970s, we know relatively little about how they affect people after the event. Research suggests people who have near-death experiences may feel increased empathy, spiritual growth, a sense of purpose, and even change how they approach their jobs. Our recent study explored how near-death experiences impact peoples return to work. We interviewed 14 working adults who had a near-death experience as a result of medical crises such as a heart attack or accidents such as a car crash. What we found challenges conventional ideas about success, motivation, and workplace culture. Doing meaningful work One of the most common changes expressed by the participants in our study was a desire to do work that felt meaningful and aligned with their newfound purpose in life. After their near-death experience, many wanted to spend time doing work that mattered to them and made a positive difference. I was not interested in doing nonsense. . . . I just was not gonna waste my time on nonsense, one participant told us. Her perspective shifted dramatically after her heart began beating abnormally for 20 minutes and she lost consciousness. Others described similar shifts. Many participants changed their careers by focusing on different work priorities, switching jobs or even starting their own companies. One participant described quitting a high-earning job after being headhunted. She started her own business, which allowed her to use her own NDE to support individuals through the end-of-life process. As one participant put it: I like to say that when I woke up in that hospital bed, I had a knowing that the character I was playing was no longer working for me and I had to change characters, and changing that character meant changing that job. Rethinking motivation Another significant shift reported by participants was a reprioritization of their values, which, in turn, shifted their attitudes towards work and their careers. After experiencing a near-death experience, many lost interest in external measures of success such as salary, fancy titles, and prestige. Across the studys participants, all reported no longer being motivated by extrinsic factors, such as money or receiving recognition for work. Instead, they focused on internal alignment and authenticity. Rather than being driven by external rewards, participants were motivated by personal growth and making a positive difference. In some workplaces, employee motivation is driven by extrinsic incentives such as bonuses, promotions or external recognition. However, after their NDEs, participants reported being driven by their own internal benchmarks or purpose. As one of our interviewees said: The motivation that was there came from this very strange, deep place that I wanted to all of a sudden make a huge impact, you know, in every part of my life. . . . Its hard to come out of this experience and not feel theres a reason why youre here, and you hate to say it, but you feel you have this special gift now. And its like why and how am I going to apply this? So, with work, I approach it that way as well. Relational transformations We also found that near-death experiences transformed how people interacted with and related to others at work. This is consistent with previous research that shows distinct personality and attitude changes reported by survivors of NDEs. Specifically, NDEs shift individual outlooks on life and can serve as catalysts for transformation, influencing how people relate to others. Before their near-death experience, many participants viewed workplace relationships as task-oriented and transactional. But afterward, those same relationships became more meaningful to them. Colleagues, clients and customers were no longer viewed as just business contacts. Instead, several participants spoke of their service and sales interactions as small acts of relationship-building rather than simply being economic exchanges. One participant said: My relationships across the board are deeper, are more connected with people, 100%. . . . I was a decent salesman before but this is, like, bringing spirituality into a quote-unquote sales position, which blows my mind. Lessons for the rest of us What does this mean for those of us who havent had a near-death experience? The participants in our study said their near-death experiences reoriented them to what really matters in life. The after-effects challenge traditional organizational values that celebrate hyper-productivity at the expense of meaning and high-quality relationships. As previous studies suggest, workers engaged in meaningful work eventually manifest greater productivity and accomplishment as opposed to burnout as a result of overwork. As interest in workplace well-being continues to riseparticularly in the wake of COVID-19 and the great resignationNDE survivors may be ahead of the curve. The after-effects of a near-death experience align with what workers tend to want from their jobs. Workers generally want to satisfy three fundamental needs: economic security, meaningful work and high-quality relationships. Our results suggest that NDE after-effects result in reductions in the importance of satisfying the drive for economic security and elevate the significance of meaningful work and authentic relationships. The stories of near-death experience survivors offer a kind of blueprint for reimagining how we work. For employees, that might mean re-evaluating what success looks like or exploring roles that align more closely with personal values. For employers, it might involve fostering workplace cultures that prioritize connection, purpose and well-being. One participant offers a lasting reminder for all of us seeking more meaning in our life and jobs: Its about relationships, not achivements. Akierah Binns is a PhD management candidate at the University of Guelph. Jamie Gruman is a professor of organizational behaviour at the University of Guelph. This article is republished from The Conversation under a Creative Commons license. Read the original article.
Category:
E-Commerce
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