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June 18, 2018 | Higher Ground

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Ontario Premier Doug, who drives an Escalade, says a first order of business when he takes over the Promised Land on June 29th will be to punt the cap-and-trade system. Brought in by the feisty, lefty Libs the regime put a price on carbon emissions in order to cut down on global warming and in the process costs business billions and makes everything more expensive.

Bunk, says the new preem. The thing hurts families and accomplishes diddly. So Ontario is withdrawing from a carbon pricing market it shares with Quebec and California (two other lefty places). Moreover, Ford is gunning for T2 and his national carbon tax plan. “I will (be) directing my attorney general to use all available resources, to use every power at the government’s disposal, we will officially challenge the federal government carbon tax on Ontario families.”

Meanwhile in Washington, the American government pulled out of the Paris Accord on climate change – an early act of President Trump who says it’s all a hoax. He’s okay with mining more coal, drilling for oil in sensitive areas and bringing back all the smoky manufacturing jobs that exported to Asia.

How governments deal with the climate is a big deal amid a fog of denial by many that a problem exists at all. Yet just this week came new stats on the burn rate for polar icecaps and giant swirls of garbage in the oceans. In some places (like far-lefty BC) consumers are paying big bucks in carbon tax every time they buy gasoline or home energy. But this seems futile when 1,600 new coal-fired power plants are being developed in 62 countries, increasing generation by 43%. (By the way, Alberta produces 500% more greenhouse gas emissions than does BC, according to the federal government.)

The skeptics, doubters and deniers say the climate might be changing, but that’s the climate’s fault. Why should we all pay more tax, sacrifice jobs and economic prosperity trying to change something that’s natural? The believers and crusaders say man’s exploitation of the planet is leading to an environmental, social and economic disaster, and change is essential. If we tax bad behaviour, it may stop. Both sides claim science is on their side.

Well, as the climate alters (manmade or not) the weather grows more extreme and unusual. It now snows in Vancouver and Victoria. Forest fires and mud slides have sure messed up California. Temperature swings are routine. Floods, too. Winds and ocean currents have modified, so the days turn hotter, colder, wetter or drier. It’s not the first time this has happened, but many worry the changes are now irreversible.

When it comes to real estate, climate is everything. You can’t move a property. Its value is intrinsically affected not only by the kind of weather it habitually receives, but also the level of risk. For example, Fort Mac burned. Richmond is likely to be inundated as sea levels rise. The eastern coast of the continent has been bashed with an historic string of winter storms. Now Toronto is melting with 40-degree days after a largely non-existent spring.

Already US real estate values are being affected by climate change, according to Bloomberg, working with a national property data curator. Those places most exposed to flood and hurricane risk are, on average, worth less than a decade ago. The data encompassed almost 3,400 cities, divided into groups according to the threats of extreme weather they face – and the results were stark. Houses in an area with a low flood risk gained 9% in value. Those where flooding is now more prevalent lost almost 5%.

This week another report, based on an analysis of Zillow data done by the Union of Concerned Scientists, is positively scary. Climate change, they say – mostly exhibited in rising sea levels – will cost billions, eventually trillions, wiping out the wealth of many families. In the US more than 150,000 homes and commercial properties, now worth $63 billion, could be whacked within the next 15 years. The risk will double by 2045. “This is, of course, homes that are often people’s single biggest assets,” it says. “This is about entire communities that might find much of the property in their community gets inundated, and that might affect their community tax base.”

If sea level rises more than six feet by the end of the century, these guys forecast the flooding of 4.7 million homes in the US alone. Within 25 years 10% of the housing stock in 175 cities could be inundated, and plunge in value.

But, say the scientists, much of that could be avoided if the Paris Accord is implemented and global warming is kept to an extra two degrees or less.

Which won’t happen, of course. It’s all fake news, says the leader of the world’s biggest economy. And now, of Canada’s largest province.

So I guess we’re okay. But move inland.

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June 18th, 2018

Posted In: The Greater Fool

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