As discussed in class, the validity of climate change is inevitable; the cumulative evidence that exists in support of climate change will eventually lead to a unanimous consensus . However, it is important to know how climate change might be affecting us today.
In a recent article on the website Co.Exist (which I encourage all of you to regularly visit), Terry Tamminen adopts an interesting approach to assessing how climate change will play a significant role this year in four markets: insurance, water, real estate, and electricity. I offer my opinions on each of his analyses. Tamminen writes that the Insurance Information Institute recorded national insured losses of close to $36 billion in 2011 “from record-setting extreme weather catastrophies” . While this is a significantly high number, the chart from the III puts things into perspective . There definitely seems to be a higher frequency of losses post-1988 compared to pre-1988. In fact, it seems like the three years with the highest insured losses on record were all after 1994. Tamminen is perhaps right on the trend of increasing insurance costs.
Another kind of disaster discussed in the article is drought. In our class last Thursday, Mark Strama alluded to a general consensus in Texas that water is one of the state’s biggest concerns . Spicewood Beach, a town not too far from Austin in Burnet County, has become the first town in Texas to officially run out of water . The town is currently transporting in their water from miles away and costs the agency roughly $1000 a day. In 2011, Texas experienced its driest year since 1917, and if it continues this way, it’s not unimaginable to see these costs being passed down to consumers in the foreseeable future.
Tamminen discusses how the cost of coastal real estate will also rise as a consequence of preparing for more intense storms. But the last – and perhaps the most interesting – argument he makes is that the cost of electricity bills will go down. In California, specifically, the Energy Commission has been releasing some fairly detailed guidelines on the energy consumption of household goods. The 2010 edition, for example, has a stipulation that “a television shall automatically enter … stand-by mode after a maximum of 15 minutes without video and/or audio output” . Tamminen believes that regulations like these, along with higher standards on chargers, will save $306 million a year off Californian energy bills, because they will have to build capacity for a lower peak load. I couldn’t find the source of this information, but a quick look at the USA’s energy consumption seems to imply that our energy consumption has reduced its rate of growth, while we consumed less in the years 2008-2010 compared to 2007 :
While history has definitely shown that we can consume less, it’s hard to say definitively whether per unit energy costs will go down as a result of these measures. We trade energy on a global market, and the rising energy consumption of countries like China, India, and Brazil will probably have a bigger impact on the cost of energy compared to progressive local standards.
Do you agree/disagree with Tamminen’s views? Do you think he missed other important indicators?
 Dr. Webber’s Lecture on Energy, Technology, & Policy. The University of Texas at Austin, April 3, 2012
 3 Things That Will Cost More in 2012, Terry Tamminen. http://www.fastcoexist.com/1679610/3-things-that-will-cost-more-in-2012
 Mark Strama’s Lecture on Energy, Technology, & Policy. The University of Texas at Austin, April 5, 2012
 Data from EIA Annual Energy Review.