This feels like the beginning of the beginning of something big.
Moody's Investors Services, one of the top credit rating agencies in the world, has begun notifying coastal cities and states that their credit ratings will be downgraded if they don't prepare for climate change.
"What we want people to realize is: If you’re exposed, we know that. We’re going to ask questions about what you’re doing to mitigate that exposure," Lenny Jones, a managing director at Moody’s, said in a phone interview. "That’s taken into your credit ratings."
In its report, Moody’s lists six indicators it uses "to assess the exposure and overall susceptibility of U.S. states to the physical effects of climate change." They include the share of economic activity that comes from coastal areas, hurricane and extreme-weather damage as a share of the economy, and the share of homes in a flood plain.
Based on those overall risks, Texas, Florida, Georgia and Mississippi are among the states most at risk from climate change. Moody’s didn’t identify which cities or municipalities were most exposed.
The reasons they're doing this should be fairly obvious by now.
Even the best case scenarios outlined by scientists tell us significant portions of the coast could be under water in the coming decades. On the other end of the spectrum, the worst case scenarios tell us most of Florida will disappear beneath the sea.
There's hundreds of billions of dollars, perhaps even trillions, tied up in properties that could be literally worthless in the future because they're under water. At some point the bill is going to come due and ratings agencies are going to mitigate their own liability by accurately conveying that coastal properties could be a risky investment if cities and states don't take the necessary steps to prepare for what's coming.
What those preparations will or should look like is another question. We live in a political environment where there's more appetite in Congress for building a worthless border wall than building a sea wall.
Investors, banks, ratings agencies, and the Earth itself don't care if Donald Trump and Republicans in Congress believe climate change is a hoax. Climate change doesn't depend on their belief in it. It's happening.
The great climate change bailout of 2050 will be epic.