The main objective with some sciences is to preview what may happen, so that government and people can prevent disasters. Hundreds of scientific groups publish reports on what will come. McKinsey applies these reports.
Climate is already a current problem. Droughts last year, cold in Portugal while warmth in Nordic countries this winter, plenty of snow in Turkey, Greece and Spain last week, are evidence that scientists are right. What they preview for 2030-40?
“Rising sea levels, increased tidal flooding, and more severe storm surges from hurricanes are likely to threaten Florida’s vulnerable coastline. Physical damage to real estate: a once-in-100-years hurricane might cause $75 billion worth of damage to real estate, up from $35 billion today”.
Same for the Algarve, for most of Portugal and southern Spain?
“Prices of exposed homes could drop, mortgage rates could rise, more homeowners may strategically choose to default, and property-tax revenue could drop 15-30% in directly affected countries. Adaptation measures include improving the resilience of existing structures, installing new green infrastructure, and building seawalls”.
The EU money promised a lot for climate, but the programs that Portugal plans, ignore the probably effect of rising seas, tsunamies and hurricanes. Most of real estate here goes to slots close to the seas and, except Portimão, I know of no county in Portugal which is prepared for them.
Most of investments go to real estate; instead of boosting our capacity to raise industrial productivity to compete with other regions in the EU and abroad, as agro-industry. That real estate will be affected, may be destroyed. Most of real estate owners will lose a lot of assets, and most probably banks, which already now have 410,000 homes for sale longer than one year, will have, as in Florida, to raise mortgage rates. This will increase banks’ debts and we will face again a huge crisis.
We, econometrists and investors read scientists estimates in order not to lose money. Amazing, as governments ignore them.
