Gambling on Armageddon
When oil giant Mobil donated land containing the Texas City Prairie Preserve to the Nature Conservancy–America’s largest environmental group–in 1995, wildlife conservationists breathed a sigh of relief. At last, the endangered prairie chicken that had been threatened for decades by oil and gas extraction would be safe.
The Nature Conservancy did get busy on the site—not with the fiddly business of conservation work, but something few expected from a major green NGO. They started drilling for oil.
It was perhaps a surprising move from an organization whose mission is to “conserve the lands and waters on which all life depends”—but the pumps have been merrily flowing ever since, bringing in so much money that they even opened a new well in 2007. (Who said that environmentalists didn’t have a business instinct?) Oh, and the chickens? They’re on their way to extinction, and haven’t been seen in the Texas City Prairie Preserve since 2012. Oops.
That a “conservation” group can let a species under its watch disappear while sinking wells beneath its habitat is astonishing enough–a bit like finding out that Greenpeace was quietly expanding into the nuclear arms trade. But it reflects a growing consensus that, whatever ecological devastation might mean for the planet, it’s also a great money-spinner. Welcome to the latest exciting opportunity in the sights of investors: the collapse of planet Earth.
“Profit From Global Warming or Get Left Behind,” enthuses a recent Bloomberg article, announcing that the debate over whether climate change is real or not is already over; the important questions now are how the eco-crisis will “affect business,” what the “investing consequences” are, and who will be climate change’s “winners and losers.” Many companies are scrambling to be on the winning side—companies such as hedge fund Nephila, an early leader in the booming market in “weather derivatives,” which is a form of casino-capitalism that squeezes profits from natural disasters.
This, surely, is the biggest short in history—reckless betting that makes 2008 pale by comparison. “The warmer the world,” as journalist McKenzie Funk summarizes the view from Wall Street, “the bigger the windfall.”
And what a windfall it is. Among all the potential spoils there’s “hydrocommerce,” where investors snatch up water rights in dessicated river systems like those in Australia and Colorado, so that one might hike the price as the world gets thirstier. Or savvy investors could get in on the land grab that began in 2008, where sovereign funds like the UAE, as well as companies like Goldman Sachs and Morgan Stanley, have been buying up approximately 80 million hectares of farmland in places like Sudan and Ethiopia, in the midst of appalling hunger there.
Counter-intuitive though it might be in an age of ever-more frequent freak weather events, insurance might also be a good investment–after all, what are storms and hurricanes but “free advertising on a Biblical scale” for the underwriting industries? The personal protection market is certainly booming. In the wake of Hurricane Sandy, real estate developers are already marketing gold-plated private disaster infrastructure to rich buyers who (probably sensibly) don’t trust the underfunded state to protect them from climate events. And ARCADIS, a Dutch engineering firm specializing in flood protection, offered to wall off Manhattan from “the next Sandy” for a bargain $8 billion (McKenzie Funk estimates that $51 billion has been put aside for proposals for coastal defenses–that’s 128 times the amount given to the developing world to adapt to climate change.)
Privatization and protection together form the backbone of enviro-commerce, a climate-fuelled “war on the poor” that envisions threats not just from the weather itself, but from the leagues of displaced or impoverished climate victims. It’s no wonder that weapons behemoth Raytheon is offering privatized disaster response services, as well as mobilizing private militias, to protect the wealthy. Then there’s all the money to be made building survivalist camps with reinforced walls to keep out the inevitable climate refugees. Who wouldn’t want a piece of that pie?
Some go further still, seeing not only economic but political gain in planetary collapse. In 2011, Republican Joe Read introduced a bill to the Montana state legislature declaring global warming to be “beneficial to the welfare and business climate of Montana,” while Jim Geraghty claimed in the Philadelphia Inquirer that climate change would help to bring about a “second American Century”—disaster capitalism raised to truly geopolitical levels. Enlightened self interest isn’t quite as enlightened as promised.
The logic is brilliantly circular: in the long run, this kind of “planetary shorting” helps to fuel the very crisis that it’s mining. Take the disastrous melting of the Greenland ice sheet, which has mining executives frothing over the “bonanza of gold, rare earths, and base metal deposits” revealed by retreating ice. Or the investors clamoring to buy up the Chukchi sea in the Arctic, where melting has devastating consequences both for wildlife and the planet as a whole, but also comes with the tasty perk of easier fossil fuel extraction.
Maybe these guys do know how bad it all sounds, though: “Betting on the failure of global efforts to contain warming may seem cynical, but it’s increasingly logical,” announced a Bloomberg article in 2013. Who knew climate change could be so good for the bottom line? Now…what happened to those prairie chickens again?