How are markets adjusting to climate change?

A loyal MR reader asks:

Are the markets adapting to the warmer world?…

# Are the prices of real estate in cooler areas of the world going up at the expense of the prices in warmer areas of the world?
# Is R&D money being invested in cheaper and more efficient cooling systems for buildings, cars, individual people?
# Are the shares of wine producers in the UK or Germany going up?  As the south of the UK gets warmer, the quality of the wine should increase.  What is happening to wines from regions where grapes won’t grow in the future?
# How about ski resorts? Would you start a new one now?

It is hard to specify the relevant comparison or "event study" (what should the price of a UK winery be?), but I haven’t heard of significant market price adjustments in secondary assets.  This NYT article, about real estate price effects, is mostly speculative.  Corn and ethanol prices are way up, so why not Canadian real estate?  Most of all, the time horizon of many pending global climate changes might be thirty years or more, maybe a century.  The claim of Nicholas Stern is that "we," standing in for the social welfare function, should care about the future more than markets do; evaluating that view, here are my posts on the social discount rate.

A few of you asked for posts on carbon taxes but that has been covered already.  A carbon tax will work only with some probability, mostly because international cooperation may not be forthcoming.  That means it is best to sub in a carbon tax for some other tax, in balanced budget fashion.  Here is a more general post on global warming.

#This counts for at least two more in a series of 50.  I’ll say I’m up to 30.

Addendum: Glen Whitman links to David Friedman.


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