Catastrophic fixes: cyclical devaluation and accumulation through climate change impacts

Abstract

Abstract. This paper investigates the scales and temporalities through which climate change impacts may be rendered into socio-ecological fixes for crises of overaccumulation within the (re)insurance industry. The property insurance and catastrophe reinsurance sectors are notorious for their cyclicity, with prices and returns oscillating dramatically between "soft" and "hard" markets. The problem of overaccummulation in soft market periods is often resolved by the destruction of reinsurers' capital reserves through huge catastrophic losses. This is typically followed by the revision of catastrophe models and reestimation of exposed values, processes which absorb additional (re)insurance capital and provide technoscientific legitimacy for raising rates. Reframing climate change risk in terms of ecologically-sourced devaluation suggests that, rather than posing an immediate existential threat, in the short to medium term the uncertain impacts of global climate change might constitute a recurrent "catastrophic fix" for particular segments of financial capital. This highlights both the productivity of uncertainty about climate change impacts and the limits of presuming that the operations of the private insurance market can produce a built environment more adapted to climate change. Rather, the more likely outcome is splintering protectionism: a patchwork of high risk, high reward areas where insurance is available only to those with the ability to pay rising premiums, leaving the state to manage the retreat and relocation of less remunerative properties and populations.

The Socioecological Fix: Fixed Capital, Metabolism, and Hegemony

“…. as well as The Socioecological Fix: Fixed Capital, Metabolism, and Hegemony surplus production, is a condition for [fixed capital formation]" (707), and suggested that as the scale of infrastructure projects grow, so, too, must the size of the surpluses or the pot of fictitious capital generated 280 through credit and financial mechanisms with the latter increasingly representing the terrain on which fixes might be unfolding (see Johnson 2015). In this respect, the possibility of a fix is largely immanent to, albeit not determined by, crises of overaccumulation and 285 their associated surpluses.…”

Who Pays for the Next Wave? The American Welfare State and Responsibility for Flood Risk

“…They too may be left to the state to handle, and a "splintering protectionism" generated in which increasing burdens are unequally felt by different citizens. 79 The author wishes to acknowledge, with gratitude, Asa Maron, Marion Fourcade, Neil Fligstein, Calvin Morrill, the participants of the GEMS seminar at the University of California, Berkeley, as well as the editorial board at Politics & Society, for their generative and valuable comments on earlier versions of this article.…”

Privatizing climate adaptation: How insurance weakens solidaristic and collective disaster recovery

“…In some cases, vulnerability can become entrenched in ghettos of uninsurable housing in high risk areas (Gearing, 2018;King et al, 2013). Johnson (2015) further suggests that the insurance industry uses large-scale extreme weather events as an opportunity to re-calibrate risk modeling and further increase premiums for high risk areas, leading to what she calls "splintering protectionism" in which the property of the affluent is secured against loss, while the vulnerable are left to hope for ad hoc disaster relief by governments. Affordable or not, there is currently little empirical evidence to support the effectiveness of risk-reflective pricing as a risk signal (McAneney et al, 2013), or risk perception as a driver of insurance purchase (Bubeck et al, 2012).…”