Don't you hate it when the weatherman gets it wrong? Apparently, so does Kim Jong Un.
According to state-run newspaper Rodong Sinmun, the North Korean leader has been touring meteorological facilities in his country complaining that there are "too many incorrect" weather forecasts.
As further proof of the supreme leader's extreme displeasure, the Rodong Sinmun report includes photos of a red-faced Kim chastising what appear to be sheepish meteorological personnel.
The wording of the report is a little unclear at times, but it claims Kim's concerns about the weather relate to its potential impact on the economy.
Blaming outdated equipment and scientific method, the young leader stressed a need for accurate forecasts to protect people's lives and property from "abnormal climatic phenomenon" (sic) and to safeguard industries like agriculture and fisheries from natural disasters in a timely manner, according to Rodong Sinmun.
Ohio is leading a group of drilling states working with seismology experts at energy companies, government agencies and universities across the U.S. on how best to detect and regulate human-induced earthquakes.
How do you regulate an earthquake?
The initiative follows Ohio's discovery in April of a probable link between the drilling practice called hydraulic fracturing, or fracking, and five small tremors in eastern Ohio, a first in the Northeast. In 2012, Gov. John Kasich (KAY'-sik) halted disposal of fracking wastewater surrounding a well site nearby after a series of earthquakes later tied to a deep-injection well.
Ohio Oil & Gas Chief Rick Simmers tells The Associated Press state regulators seek up-to-date information in developing appropriate detection procedures and regulatory practices.
How about stand nearby and if the ground starts shaking, well, you've detected an earthquake.
One environmentalist, Teresa Mills, says ending fracking is the most effective way to halt the quakes.
Seeing this post on Vox got me thinking - I wonder how housing prices vary in response to disaster risk when the risk is forecasted over a longer term rather than a shorter term? I've read a bit of the literature on the housing price response to hurricane risk and climate change-based flood risk (from a certain blogger here as well as my undergraduate advisor no less) and covered some basics but I don't think I've seen a comparative study.
It seems that short term risk predictions would be more likely to be internalized in the price. For one, disasters such as hurricanes seem to strike more often so they're often more salient in homeowners' minds. Additionally, many of the predictions often comprise of statements such as "more intense hurricanes are likely to hit X area over the next 8 years," which seems a little more digestable than "there is a 56.2% chance of having a huge earthquake somewhere in your relative vicinity over the next 50 years" which is how many earthquake studies read.
Given the housing prices in the San Francisco Bay Area, where I live, I find it hard to believe that climate change risk and earthquake risk are being appropriately priced into the housing stock around here. That being said, it is also entirely possible that there are governmental programs that are distorting risk pricing as well. Discount rates could play into this as well - I suppose many people will just discount away any risk beyond some threshold (see here for what economists tend to think about discount rates in comparison to observed discount rates).
If anyone has a good place to point me for articles comparing short run and long run distaster risks and how (or if) it is priced into housing stocks, I would be grateful for the reading!
While their magnitude and the backlash may have been a surprise, the cost increases are what was intended. But why should it have been a surprise? Removing subsidies is never popular:
A major flood insurance bill was a rarity when it passed what is widely derided as a do-nothing Congress in 2012, but a year and a half later, there is now an enthusiastic bipartisan effort to gut it. ...
It appears to be another Washington story of unintended consequences, and a warning, environmentalists say, of the rising costs of climate change. Most important, the bill may be a preview of the fights to come over who will pay those costs.
The Biggert-Waters measure sought to reform the nation’s nearly bankrupt flood insurance program, ending federal subsidies for insuring buildings in flood-prone coastal areas. Over the past decade, the cost to taxpayers of insuring those properties has soared, as payouts for damage from Hurricanes Katrina, Irene, Isaac and Sandy sent the program $24 billion into debt.
The aim of the measure was to shift the financial risk of insuring flood-prone properties from taxpayers to the private market. Homeowners, rather than taxpayers, would shoulder the true cost of building in flood zones.
Deficit hawks liked the idea because it would curb a rapidly rising source of government spending. Environmentalists liked the bill because they said it would reflect the true cost of climate change, which scientists say is ushering in an era of rising sea levels and more damaging extreme weather, including more flooding.
But a year after the law passed, coastal homeowners received new flood insurance bills that were two, three, even 10 times higher than before.
The flood insurance problem will never be addressed until the true cost of coastal living is faced by coastal homeowners. One expensive way of jumpstarting the process is to buy out coastal homeowners who can't afford the new insurance premiums at the pre-policy market price. The government could then sell it at a market price that reflects the new insurance premiums. The goverment budget deficit would take a one-time hit but that would be better than taking a long term hit by having taxpayers subsidize coastal living through the National Flood Insurance Program.
So, I see three unattractive options:
Ignore the problem and let taxpayers continue to subsidize coastal homeowners
Leave Biggert-Waters in place and make coastal homeowners pay the true cost of coastal living
Ease Biggert-Waters into place with buyouts of homeowners who cannot afford coastal living
In the long run, options 2 and 3 are strongly preferred in terms of economic efficiency.
Wasn't flood insurance reform intended to raise rates?
With the National Flood Insurance Program running a $24 billion deficit after huge payouts from Hurricanes Katrina in 2005 and Sandy in 2012, Congress in 2012 ordered radical changes to make premiums more closely reflect the true risk of damage for Americans who own insured property in floodplains near rivers and along the coast.
The changes began taking effect in 2013 and prompted protest from coastal residents and real estate interests across the country. Rep. Maxine Waters of California, one of the law’s co-sponsors, criticized FEMA’s implementation of the new law and supported legislation aimed at postponing the insurance premium increases. North Carolinians including Sen. Kay Hagan and Reps. Walter Jones and Mike McIntyre also are pushing for the delay, which could receive a Senate vote as soon as this week.
The loudest support for action to stall the insurance changes has come from New Jersey, Louisiana and other states where the impacts are showing up more quickly than in North Carolina. In states where flood insurance rate maps were updated last year, homeowners quickly learned what their new rates would be. The picture for most policyholders in North Carolina will become clearer as new flood maps start rolling out this spring.
The Wests [NC beach homeowners] pay just $850 a year for their flood coverage now, thanks to generous taxpayer subsidies that are being phased out under the new law. The new rate will be determined partly by the upcoming flood map for New Hanover County and by a surveyor’s elevation certificate required under the new law. One coastal policy expert reckons that the new premium for the Wests’ cottage could reach as high as $21,000.
“We had two contracts, and both of them crashed because of this uncertainty,” Sybil West said. “I’m alarmed because I think this law is going to cause problems all across the coastal United States. It puts us in a bind, and it puts buyers in a bind.
“I’m not opposed to paying more” for flood insurance, West said. “If people live on the beach, they need to pay for that. But I think nobody realizes what these subsidies have been. This is an education.”
The new flood insurance rules, which went into effect on Oct. 1, are intended to make the deeply indebted NFIP solvent by no longer charging government-subsidized rates on homes in flood-prone areas. The hikes will affect about 20 percent of the 5.5 million people who have NFIP policies around the country, as well as thousands more who live in areas that didn’t used to be considered flood-prone but who now must buy insurance under the new FEMA map.
The NFIP subsidized rates have allowed people for years to build in flood-prone areas that, in some cases, probably never should have been built on in the first place. But the feds’ solution to this — hiking up rates over four years until they reach market price — could leave millions of homeowners unable to afford the steep new prices. If these homeowners try to sell their houses, they’ll most likely find it tough to find a buyer, who would inherit the new insurance rates. (People with mortgages are required to purchase the insurance — those who’ve paid off their homes can skip it.)
For years, the federal government has subsidized flood insurance premiums for people whose homes are built in flood-prone areas. One can speculate as to the motivation (real or otherwise) for the subsidization--those with low income can't afford to build elsewhere, private insurance markets overprice insurance in flood prone areas,...--but one thing is certain: flood insurance priced below the efficient market price will lead to too much construction in flood prone areas. Perhaps worse, if the insurance rates are too low--as was the case with the National Flood Insurance Program--there is an incentive to rebuild in areas likely to flood again.
It seems the federal government learned some lessons after Hurricane Katrina and has decided to raise the price of flood insurance by removing subsidies for rebuilt homes in the wake of Super-duper Storm Sandy. While well-intended, and the right move from an economic efficiency point of view, the removal of an inefficient policy is going to create short-term hardships for a significant number of people.
Don't get me wrong. I applaud the move toward actuarily efficient pricing of flood insurance.
I just feel bad for those who made decisions based on bad policy only to see it changed midstream.
With the anniversary of superstorm Sandy just a month away and the
still-battered remains of homes visible on the beachfront, Gov. Chris
Christie ordered the state to start legal action against holdout
homeowners to get the dunes built.
on the way for oceanfront municipalities in their ongoing battle with
easement holdouts for the federally funded beach replenishment project.
Wednesday, Christie signed an executive order that, among other things,
directs the attorney general’s office to “coordinate legal action to
acquire the necessary easements to build dunes” and creates a flood risk
office to take steps toward acquiring property to build dunes along the
addition to the order, the protracted legal battle between a Harvey
Cedars couple and the borough over the rights to build a 22-foot dune on
their beachfront property has been settled for less than a cup of
coffee. The couple, Harvey and Phyllis Karan, will be compensated $1 in a
property rights dispute that lasted over three years, two storms and
one public rebuke by the governor. At one point, they had been awarded
$375,000 for losing their ocean view to new protective dunes.
we rebuild from superstorm Sandy, we need to make sure we are stronger,
more resilient and prepared for future storms, and dunes are a major
component of this process,” Christie said in a statement. “We can no
longer be held back from completing these critical projects by a small
number of owners who are selfishly concerned about their view while
putting large swaths of homes and businesses around them at risk.”
*I have no idea what the title has to do with this post other than anytime I see a story about Sandy and New Jersey I think of 4th of July, Asbury Park. One of my favorites.
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