I don’t think my namesake is correct about alternative investments for non-skeptics for the reasons ajay and jq make clear.

But he’s still correct (IMO) about the lack of skeptic’s investments saying very little about the real belief in their claims.

Effects that far into the future have little relevance financially, given that we can make normal investments with expected returns in the 4-12% range. The future more than 30 years away is discounted to almost nothing. So warming would have to stall enough within the next 30 (really 10-20) years to convince alarmists for skeptic based investment made today to profit. How likely is that?

Also, the more reasonable skeptics are not particularly skeptical about warming per se, only about the most alarming predictions thereof, and damages therefrom, and about the value of pursuing proposed remedies in the present. These folks don’t really have much investment opportunity, since the most alarming predictions are not likely to be priced into the market.

The real money to be made if the (non-insane) skeptics are right is in the technologies which will make future cuts or remediation much cheaper than implementing Stern’s recommendations today. But those are either nonexistent or in their infancy today, and are thus both very risky and extremely difficult to bet on profitably without a great deal of domain knowledge.

Simple swaths of bets on the whole possible domain for climate tech at this point are likely to include organizations who are working the in wrong (according to skeptics) direction, and mostly those who will prove irrelevant to the issue.

Not necessarily. Given that a belief in global warming is the conventional wisdom, it’s likely that the market will already have priced its effects in.

Good point, though I think that there is always going to be a strong holdout segment that will play to the status quo, regardless of the popularity of theories of change. (The buggy-whip manufacturors, as it were).

So I guess the real money’s in believing in change that’s either more or less severe than the conventional wisdom, preferably more (and being right). That way, you’re going for investments that are undervalued by both the holdouts and the mainstream.

Yes, and in Texas we refer to that happy affinity as “the trailer park.”

Also, can I just note the delicious “irony” (as in “not really irony”) of a poster named “Thales” commenting on flood-plain planning?

I can’t? OK, I won’t.
.

No. As reducing CO2 emissions has a lag, you’d still be fucked – the market, after all, can stay irrational longer than you can stay solvent.

Personally, I think warming is happening, but the effects will be much less severe than the nightmare scenarios. I further think that the chances of international treaties reducing carbon emissions globally and much more strictly than Kyoto are unlikely given the state of international and national politics. Kyoto signatories are largely missing their targets, and the EU countries are handing out carbon credits like they’re printing money thereby subsidizing their domestic industries:

http://www.iht.com/articles/2006/11/27/business/emit.php

The latest prediction is for huge windfall profits for European airlines:

http://news.bbc.co.uk/1/hi/business/6189025.stm

Does anybody really expect France, for example, to stop looking for ways to turn carbon policy to the advantage of its domestic economy and ‘national champions’?

I have more hope for technical changes, simply because they require no global political cooperation. Low cost, high efficiency solar power or new thorium reactor technology can spread across the globe and be adopted broadly without any politics.

But I don’t know how make a financial bet on all of the above—so I think I’ll stick with index funds for my 401K.

So the only profit option here is for the skeptics, as Chris says.

Not necessarily. Given that a belief in global warming is the conventional wisdom, it’s likely that the market will already have priced its effects in.

Similarly, I won’t be able to make millions by shorting natural gas for summer 07, on the belief that demand will drop because of the warmer weather. Even though I am a firm believer in this massive impending change in regional temperatures, I can’t profit from my belief, because it’s shared by everyone else.

Cute post, but there’s probably a correlation between skepticism about global warming and skepticism about European entrepreneurialism.

I would have gotten away with it if it hadn’t been for those communist ski resort owners?

The BBC have a graphic showing the North American wheat belt in 2050. Hint: most of it will now be in Canada.