Crypto News: Risks lurking in US boom towns

The fastest-growing metro areas in the US are in sunny places where housing is relatively affordable. In today's newsletter, reporter Leslie Kaufman explains that many of these locations are also more exposed to the risk of wildfire, flooding or extreme heat. You can read the full version of the story on Bloomberg.com.

Also, as the results of Spain's election still remain unclear, read our free story on how the outcome could decide the fate of one of Europe's most important wetlands.

By Leslie Kaufman

A midsummer quiz: Let's say you read about an area experiencing blistering heat for weeks on end. Heat so hot that in the day, you can't go outside, and at nighttime it's still above 90F. Would you cross that off your list of locations for your dream home?

Now suppose a neighborhood experiences regular heavy flooding and was recently decimated in places by a hurricane. Do you want to move there, or perhaps look for somewhere on higher, drier ground?

Homes under construction in Tucson, Arizona. Photographer: Rebecca Noble/Bloomberg

Well, many Americans are actually choosing to move to Zip codes with a high risk of experiencing wildfire, heat, drought and flood, according to a new study on domestic migration by Redfin, an online real estate brokerage firm, made available exclusively to Bloomberg Green.

In fact, the nation's most flood-prone counties experienced a net influx of about 400,000 people in 2021 and 2022. That represents a 103% increase from the two-year period before that. The US counties with the highest risk of wildfire saw 446,000 more people move in than out over the last two years (a 51% increase from 2019 and 2020). And the counties with the highest heat risk registered a net influx of 629,000, a 17% uptick.

Take Lee County, Florida, which includes Fort Myers and Cape Coral and was slammed by Hurricane Ian last September. In the past two years, it's seen a net inflow of 60,000 people, an increase of about 65% from the prior two years.

The real estate brokerage site relied on First Street Foundation, a nonprofit that communicates information about climate risk, to flag the Zip codes at the most risk of flooding, wildfire, heat and drought, and analyzed recent Census data to find population migration patterns.

It's not that people don't care about climate dangers, says Redfin Deputy Chief Economist Daryl Fairweather. It's that concerns about affordability are primary and dominate everything else. And during the Covid-19 pandemic, the combination of remote work, low mortgage rates and high home prices in a number of major metropolitan areas prompted many Americans to relocate to the Sun Belt.

"People are seeking out places with warm weather and low taxes," Fairweather said in an interview. "Those near-term concerns tend to trump any of these climate risks."

A previous Redfin analysis found that buyers will consider climate risk when home shopping if it's easily available, but "that is on the margins, after they've already decided on a city or a neighborhood," said Fairweather.

Popular destinations such as Florida, Arizona, Utah and California's Inland Empire can have cheaper land costs for builders and, in some cases, more forgiving building codes, translating to lower new-home prices, but often the climate risks are higher than for older homes. Redfin found in a separate analysis that 55% of homes built so far this decade face wildfire risk and 45% face drought risk. By comparison, just 14% of homes built from 1900 to 1959 are at risk for fire and 37% for drought.

While the macro trend is migration to risky areas, there are two noteworthy exceptions. Hurricane-prone Louisiana and Paradise, California, the scene of the devastating Camp Fire in 2018, both saw a net outflow of residents, proving that perhaps there is a line where enough is enough.

Whether or not homebuyers are considering the long term, the long term is coming for them and their property values. As the report notes, "Homeowners in disaster-prone areas may see their property values start to grow at a slower-than-expected pace as natural disasters intensify and insurance becomes costlier and harder to come by." Rates of appreciation will be an estimated 5.4% slower than average by 2040 in counties with high flood risk, 4.8% slower in high-heat-risk counties and 3.6% slower in fire-vulnerable counties, according to forecasts by analytics firm Climate Alpha.

Subscribe to Bloomberg for unlimited access to climate and energy news, and to receive Bloomberg Green magazine.

19,000

This is roughly how many people were evacuated from parts of a Greek island where wildfires broke out amid the heat wave that's set temperature records across southern Europe.

"At the height of the Black Summer, walking around Sydney would be equivalent to smoking 37 cigarettes in one day."

Rebecca McGowan

Lead doctor at a primary care clinic in Albury, a regional city in southern New South Wales, Australia

Black Summer fires raged across eastern Australia for months over 2019 and 2020, killing 33 people and spewing out smoke that contributed to another estimated 429 deaths. Millions of Australians breathed in the particles.

As fire-ravaged Athens braces for near-record temperatures this week, a longer-term ecological catastrophe threatens the cradle of western civilization: the Greek capital risks turning into a desert. Greece is among the countries in southern and southeastern Europe — including Spain, Portugal, Italy, Bulgaria and Romania — that are vulnerable to desertification as temperatures increase and rainfall dwindles, fueling wildfires. That trend is forecast to continue as greenhouse gas emissions keep warming the planet.

The remains of a burned out home following a wildfire in Loutraki, Greece, on Wednesday, July 19, 2023. Photographer: Yorgos Karahalis/Bloomberg

British PM doesn't want to 'hassle' voters. Rishi Sunak said he will delay or abandon environment policies if they lead to direct costs on consumers, as senior Conservatives pressure his UK government to rethink its strategy following elections last week.

Investors in carbon offsets sound an alarm. Climate experts and emissions trading veterans are slamming a plan by a Belarusian trade group to sell 2 million Russian carbon credits from a defunct United Nations program.

Singapore launches heat stress initiative. The strategy will provide residents with advisories on three levels of risk to heat stress — low, moderate and high — based on a measure that factors in air temperature, humidity, wind speed and solar radiation.

By Brian K. Sullivan

Wildfire threat is rising in the US's Pacific Northwest. There are red flag fire warnings out in Washington, Oregon, Idaho, Montana, and parts of northern Nevada and California. The risk ranges from critical to elevated across most of that area, according to the US Storm Prediction Center.

About 44,000 square miles, with a population of 914,602 are in the critical areas, including the cities of Spokane and Walla Walla, Washington.

In addition to the contiguous US, parts of eastern-central Alaska are also covered by red flag fire warnings.

In Canada, through July 23, there are now 1,086 fires burning with 685 blazing out of control, according to the Canadian Interagency Forest Fire Centre.

Meanwhile, heat advisories and excessive heat warnings are all over the US map again — from Montana to California and Texas to Florida. Phoenix is set to hit 113 Monday, which would extend its streak of above-110 temperatures to 25. It reached 114 Sunday, the weather service said.

In other weather news:

Italy: The country's aviation weather service forecasts temperatures in Sicily could reach 48C degrees (~118F) over the next 36 hours, according to a statement on its website on Monday.

Storms: Taiwan is expected to issue a sea warning at 8.30pm on Monday night as typhoon Doksuri approaches, according to a report by CNA.

Floods: China's northeastern province of Liaoning has ordered mines to shut and evacuated 5,590 residents due to flooding, with rainfall expected to continue over the next two days.

So much solar power will be added to the global grid in the next three years that it's almost hard to believe – or model. "People are very, very bad at forecasting revolution," says BNEF solar analyst Jenny Chase, who joins Zero to discuss her predictions for the growth of solar and how free electricity might be the biggest challenge the industry faces. Listen to the full episode and subscribe on Apple, Spotify, and Google to stay on top of new episodes.

The Bloomberg Sustainable Business Summit returns to Singapore July 26 for a day of community building and solutions-driven discussions on innovations and best practices in sustainable business and finance. Speakers include Singapore Minister for Sustainability and the Environment Grace Fu, and top leaders from AIA, Nissan and many more. Register here for a virtual pass or to request to join us in Singapore.

Bloomberg Building a Green Economy for All: At this critical moment in history, societies are seeking to challenge the status quo in order to achieve decarbonization. What emerging power technology will be the most disruptive, and which power sources are accessible, affordable and can achieve scale? Executives from Octopus Energy Generation, Sustainable Energy for All, and Andretti Autosport will be discussing this and more on July 28 in London and virtually. Learn more here.