“The scientific evidence is unequivocal, climate change is a threat to human wellbeing and the health of the planet. Any further delay in concerted global action will miss a brief and rapidly closing window to secure a liveable future.” — Hans-Otto Portner, Co-Chair of the United Nation’s Intergovernmental Panel on Climate Change
The Intergovernmental Panel on Climate Change (IPCC), a United Nations’ group that assesses the science related to climate change, issued a dire warning for humanity regarding climate change today. “To avoid mounting loss of life, biodiversity and infrastructure, accelerated action is required to adapt to climate change, at the same time as making rapid, deep cuts in greenhouse gas emissions,” the IPCC said in a media release. “So far progress on adaptation is uneven and there are increasing gaps between action taken and what is needed to deal with the increasing risks.”
The IPCC report is attractive massive media coverage not only for its strong wording but because of the urgency of its prediction that humans don’t have much longer to reduce the amount of fossil fuels — such as coal, oil and natural gas — it burns before it reaches a tipping point.
Businesses are taking notice. A Reuters article published today says governments and regulators are just starting to issue rules that require companies to alert investors to the impact climate change is having on their operations today and the threats they’ll face in the future.
Coastal real estate buyers, owners and investors, too, need to start gathering facts about the risk sea level rise poses to a property of interest and the neighborhood and community its located in. To make educated decisions, they need to know information such as if a property is currently experiencing sea level rise flooding, if it will in the near future, if roads and other critical infrastructure that serve the property are being impacted by flooding, and what the local government intends to do about it. They also need to know if the homeowner’s association or condo board, if there is one, plans to do to address sea level rise.
These types of questions will help them to gauge the impact sea level rise will have on maintenance and insurance costs, tax rates, association dues and special assessments, and, ultimately, property value. It will also give them an idea if there’s a threat that insurers and/or mortgage providers will stop providing policies and loans in a given area.
This might sound far-fetched to some people. But, just this month, Fannie Mae and Freddie Mac announced a policy that they would not back mortgages in condo developments that weren’t properly maintained and that didn’t have the reserves to pay for routine and emergency maintenance. As sea level rises and damages more coastal real estate, it’s a good bet lenders will get tougher in approving loans in areas experiencing property-damaging sea level rise. This will impact the ability buyers to buy properties and of owners and investors to sell them.
While sounding negative, the IPCC report will actually have a positive effect if it spurs governments, businesses and individuals to get involved in the fight against climate change and global warming before the window of opportunity closes for good.