Sea-level rise a risk factor in S. Florida
It was near the end of his generally optimistic economic outlook presentation to the PGA Corridor Association in Palm Beach Gardens that Eric Wytenus dropped a real downer of a South Florida risk factor — sea-level rise.
“The risk is not just from the side but from below,” said Wytenus, managing director of JP Morgan Private Bank in Palm Beach.
New year, midyear and end-of-year financial forecasts generally cover the same topics as 99 percent of Wytenus’ presentation: the importance of asset allocation, interest rates, inflation, investor exuberance, the yield curve, consumer optimism, outlook for a recession, etc.
The mention of sea-level rise as an investor soaker for our region was a new twist. Albeit still a vague one.
Other than the obvious: Sea-level rise projections pose a danger to homes, offices, warehouses across South Florida — and the insurers covering them.
The threat, Wytenus pointed out, may not just come from the encroaching coastline but also from a welling up of groundwater, which would defy the blissful notion a wall would be enough to protect business as usual.
“It all depends on timing and which scientists are correct and when all of this comes into play,” he said, adding that projections are decades away. “The state has a fairly long laundry list of positives. And then there is this other potential canary in the coal mine that could rear its ugly head in the future.”
The words potential and future have long been safe zones for so many who don’t want to face or accept dire climate change predictions. The problem is, investing is about the future, not the present. Sea-level rise adds uncertainty, a no-no on Wall Street.
By the way, Wytenus did not limit exposure to South Florida alone.
He pointed out sea-level rise makes vulnerable other coastal cities, including New York.
From a bullish standpoint, sea-level rise, Wytenus added, raises opportunities for innovative solutions that could be monetized. There could be a profitable and lucrative industry built on addressing natural disruption to counterbalance jobs lost to technological disruption.
The coastal business hub that masters solutions could end up being the Silicon Valley of the mid-21st century. To capitalize on such opportunities, however, a shorelined region like South Florida must first accept sea-level rise is imminent, urgent.
There’s the rub. Much of the citizenry in South Florida views sea-level rise as the next generation’s problem.
During Q&A, Wytenus was peppered with all sorts of questions by the north county business people assembled for the breakfast talk May 9 at the Marriott Palm Beach Gardens. But not one on sea-level rise risk.
Wytenus said that nonreaction is atypical.
“I have gotten questions in the past,” he said. “I kind of throw it out there and people say, ‘Whoa, where are you going with this?’”