Insurers Will Get Squeezed
Here’s an industry that’s actually going to suffer in the wake of worsening climate change.
The debate over whether global warming is actually causing more hurricanes or not is still being fought, as is the argument over whether natural gas fracking causes earthquakes. If hurricanes like Katrina are going to become commonplace with the advent of serious climate change, however, property and casualty insurance companies are going to get very tired of footing the bills for the damage.
American International Group (AIG) and its peers are right in the line of fire.
More At-Home Energy Systems
There are actually two forces ramping up demand for systems that can provide electricity for homes independent of the grid.
One of them is the fact that, as more and more climate-change law puts a cap on carbon emissions, electricity prices are going to rise as a result. The other is the fact that increasingly violent weather poses risks to an already-strained utility system. Wind and solar power systems are the most likely choices for those ready to take the plunge, with solar being the more popular choice of the two.
The problem is that there aren’t a lot of pure “at-home solar system” plays. There are still companies that cater to single-house systems, however, such as the recently ballyhooed SolarCity (SCTY).
Potable Water Will be in High Demand
While pollution has gotten much of the blame for waning drinking water supplies, that assessment oversimplifies the problem. With or without more pollutants, rising ambient temperatures can also reduce the freshwater supplies by evaporation, or by melting permafrost layers.
That being said, the same CO2 that causes global warming also causes our oceans to become more acidic. That water eventually makes it to dry land, in the form of acid rain, which taints our remaining fresh water supplies. Point being, no matter how you slice it, drinking water is going to be in short supply as climate change worsens. That’s where a name like Tetra Tech (TTEK) comes into play. Tetra Tech builds systems that can desalinate seawater, as well as clean reclaimed wastewater.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.