Liberal billionaire Warren Buffett completely demolished the arguments put forward by some Berkshire Hathaway shareholders for the company to “report on the dangers” global warming poses to the insurance industry.
Scientists and politicians frequently warn global warming will cause more frequent and powerful “extreme weather” events, like hurricanes and snowstorms, in the coming years as more carbon dioxide is emitted into the atmosphere. This would mean higher insurance premiums for millions of Americans.
It’s just not the case, according to Buffett.
“Up to now, climate change has not produced more frequent nor more costly hurricanes nor other weather-related events covered by insurance,” Buffett wrote in his annual letter to Berkshire Hathaway shareholders.
“As a consequence, U.S. super-cat rates have fallen steadily in recent years, which is why we have backed away from that business,” Buffett wrote. “If super-cats become costlier and more frequent, the likely – though far from certain – effect on Berkshire’s insurance business would be to make it larger and more profitable.”
Buffett, who’s backing Democratic presidential candidate former Secretary of State Hillary Clinton, may be a big investor in green energy, but he’s not convinced extreme weather events are becoming more powerful or common. In fact, the data bears out his conclusion.
The United Nations Intergovernmental Panel on Climate Change (IPCC) found in its last major climate report there “is limited evidence of changes in extremes associated with other climate variables since the mid-20th century.”
The IPCC also found “no significant observed trends in global tropical cyclone frequency over the past century. … No robust trends in annual numbers of tropical storms, hurricanes and major hurricanes counts have been identified over the past 100 years in the North Atlantic basin.”
The international body said “there continues to be a lack of evidence and thus low confidence regarding the sign of trend in the magnitude and/or frequency of floods on a global scale” adding “that there is not enough evidence at present to suggest more than low confidence in a global-scale observed trend in drought or dryness (lack of rainfall) since the middle of the 20th century due to lack of direct observations, geographical inconsistencies in the trends.”
Furthermore, the U.S. is in the midst of a decade-long hurricane “drought” — a prolonged period where no Category 3 or higher storms have made landfall. The last major hurricane to hit the U.S. was Hurricane Wilma in 2005.
Buffett, however, is no global warming skeptic. He says he’s concerned about man-made warming, and invests in green energy — though he once admitted he does so to lower his tax liabilities.
“As a citizen, you may understandably find climate change keeping you up nights,” Buffett wrote. “As a homeowner in a low-lying area, you may wish to consider moving. But when you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.”
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