This is a nice synthesis of climate risk. It's worth pointing out, however, that Buffett’s “if” dramatically underplays the risk of a modernity-pounding catastrophe. Such risk is closer to 10 percent, according to economists Martin Weitzman of Harvard University and Gernot Wagner of the Environmental Defense Fund, who explore the question in their book Climate Shock.
4) The elephant in the room.
"As a citizen, you may understandably find climate change keeping you up nights. 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."
After his thoughtful statement on climate risk, Buffett writes that Berkshire Hathaway's insurance properties are safe from it, judging by their past growth. "So, paradoxically, the upward march in loss costs has made insurance companies far more valuable," he says.
The question then is, if climate change should be addressed, as he suggests—and it's not him (or someone like him) who should address it—then who? The whole eight-paragraph episode is, perhaps inadvertently, a presentation of the climate conundrum in a nutshell: Sure seems like this is a problem; but it's not anybody's responsibility to solve everybody's problem.
This is the elephant in Buffett's climate passage. He agrees that we may have a calamity brewing but posits no means to address it. Citizens have the opportunity to lose sleep. Homeowners can move, but shareholders can't think about it under conventional bookkeeping rules. (To be sure, he noted that Berkshire has "de-emphasized catastrophe coverages and greatly expanded" its more traditional lines of insurance business over the past two decades, which makes underwriting income less volatile over time).
5) Except for a heating climate, the future looks great.
“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve). As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do. That view is dead wrong: The babies being born in America today are the luckiest crop in history.”
Don't get me wrong. It's not that Americans born today aren't the luckiest "crop" in history. It's just that tomorrow they can expect to face unlucky challenges unprecedented in human evolution. You know the kind: shifting coastlines, dangerous heat, catastrophic floods. Until shareholders are allowed, directly or indirectly, to consider utterly disabling global risks, the challenges will continue to gather.