Moody’s Climate Change Delusion Based on Fantasies, not Facts

Coastal cities and towns across the United States are now facing significant pressure from Moody’s Investors Service, one of the world’s most important credit agencies, to battle climate change. Failing to do so, Moody’s warns, could result in downgraded credit ratings.

In a recent report to clients, Moody’s outlined several indicators its analysts use to assess “the exposure and overall susceptibility of U.S. states to the physical effects of climate change” while crafting credit ratings for the state, city and regional government bonds. Among the indicators, Moody’s listed is the share of a community’s economy that’s linked to the coast.

Moody’s says cities with large ports or an extensive fishing industry, for instance, are at a greater risk of climate change-related disasters.

“Extreme weather patterns exacerbated by changing climate trends include higher rates of coastal storm damage, more frequent droughts, and severe heat waves,” Moody’s wrote in a press release accompanying the report. “These events can also cause economic challenges like smaller crop yields, infrastructure damage, higher energy demands, and escalated recovery costs.”

Moody’s claims state and local governments that don’t adequately prepare for these increased risks will likely face credit downgrades in the future. Moody’s identified Texas, Florida, Georgia, and Mississippi as the states with greatest risks, and thus as the states that must urgently spend more money preparing for what Moody’s seems to think is inevitable climate change disaster.

If the evidence were to clearly show that future climate change is inevitably going to create additional extreme weather events and damage to coastal areas, then Moody’s analysis would make perfect sense. Increased risks should be met with more preparedness.

However, the climate change assumptions Moody’s has built into its forecasts aren’t based on the existing evidence, which shows dire extreme weather events have not substantially increased in recent years.

Prior to Hurricane Harvey making landfall in Texas in August as a Category 4 hurricane, the United States experienced a historic major-hurricane drought. From November 2005 to August 2017, not a single hurricane that measured as Category 3 or higher on the Saffir-Simpson hurricane intensity scale made landfall along an American coast — the longest such drought since modern hurricane records were first created in 1851.

Evidence of a substantial growing danger posed by other kinds of extreme weather events is also virtually nonexistent.

In testimony given before the House Committee on Science, Space, and Technology in March 2017, Roger Pielke, Jr., Ph.D., a professor at the University of Colorado at Boulder and formerly a scientist at the National Center for Atmospheric Research, noted, “There is little scientific basis in support of claims that extreme weather events — specifically hurricanes, floods, drought, tornadoes — and their economic damage have increased in recent decades due to the emission of greenhouse gases. In fact, since 2013 the world and the United States have had a remarkable stretch of good fortune with respect to extreme weather, as compared to the past.”

Moody’s is basing its analysis of future climate change risks on the credit agency’s commitment to climate change alarmist dogma, not on scientific data, and this isn’t the first time it’s happened. In June 2016, Moody’s urged countries around the world to ratify the Paris climate agreement and said it planned to use the Paris agreement commitments to guide future credit analyses.

Moody’s embrace of the extremely costly Paris agreement is telling, especially since even those supportive of the accords have said they would have a relatively minimal impact on global temperature.

Researchers at MIT’s Joint Program on the Science and Policy of Global Change estimated that compared to the 2009 Copenhagen agreement, the Paris agreement would likely only prevent an additional 0.2 degrees Celsius of warming by 2100.Even without the Copenhagen agreement, the MIT researchers estimated it would prevent only 1 degree C of warming by 2100.

These figures are truly remarkable considering fulfilling all the obligations of the Paris agreement would cost the U.S. economy about $3 trillion and 6.5 million industrial jobs by 2040, according to an analysis by NERA Economic Consulting.

By coercing communities to spend billions more to prepare for natural disasters that may never come, Moody’s is attempting to impose its climate change fantasies on the millions of American families who would have to shoulder the burden of added government costs made to prevent a downgraded credit rating.

Rather than indulge in climate alarmist fiction, Moody’s should instead stick to what the available data actually reveals when creating its credit assessments.

Haskins is executive editor and a research fellow at The Heartland Institute.

Burnett, Ph.D. is a senior fellow on energy and the environment at The Heartland Institute.

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