Free-market capitalism betting on global warming

One winter storm that hit the east coast this past winter had the anti-global warming advocates claiming victory over Al Gore and environmental groups pursuing legislative solutions to anthropogenic (man-made) climate change. 

The fact that – at the same time as snowfall records were set in Washington and New York – warm temperatures had enveloped western ski areas was largely ignored by the knee-jerk, anti-global warming crowd.  But, not the businesses affected by climate change.

A recent Slate article taps into capitalism for the real answer, and notes that corporations are taking climate change far more seriously than the lobbyists who represent them.

The ski industry is just one example.  Colorado resorts recognize that their height advantage is likely to put them at a competitive advantage vis-à-vis Europe or the lower elevation California ski areas as the climate changes, and they’re actively marketing that benefit.  But even in Colorado, the seasons have contracted in such a way that the Spring Break bonanza is becoming a threatened species.

One cause of the problems in Colorado is droughts in Utah that have kicked up red dust clouds that settle on the snow.  This makes the snow melt more quickly (because the red absorbs more heat from the sun) while also making it too gritty to ski on.  A  similar effect occurs at California ski resorts when carbon from man-made activities is dispersed across the Sierra snowpack.

Some companies are turning climate change into a windfall.  One example is Germany’s Beluga Shipping, which is saving hundreds of thousands of dollars in shipping costs by taking its freighters through Arctic waters that have become passable because of the melting ice pack. 

Others are banking on a warmer future, such as wine makers who are planting their grapes at higher altitudes, and insurance companies who are assessing the risk to agriculture, real estate, and other businesses in a warmer world.

Some of the nation’s major investors have become concerned as well.  For example, the California State Teachers’ Retirement System—the nation’s second-largest public-pension fund—has begun demanding that firms examine and disclose any potential risks from global warming.

Even America’s Military-Industrial Complex has begun planning for the effects of a warmer planet.  According to a 2009 article in the New York Times:

     Recent war games and intelligence studies conclude that over the next 20 to 30 years, vulnerable regions, particularly sub-Saharan Africa, the Middle East and South and Southeast Asia, will face the prospect of food shortages, water crises and catastrophic flooding driven by climate change that could demand an American humanitarian relief or military response.

Yet, climate change skeptics continue to flood the airwaves and newspapers with a very different message:  global warming is a hoax.   In fact, Sen. James Inhofe (R-Oklahoma) famously called it “the greatest hoax ever perpetrated on the American people”. 

That position, however, does not seem to be finding much support in the free market.