Buffett on Global Warming

Although Warren Buffett tries to separate out his politics from his business, sometimes the two overlap. This tends to result in a little bit of a confusing message overall. Nowhere is this more apparent than when it comes to global warming. The topic has always been extremely controversial, and there is plenty of evidence for both sides which makes it something of a mess for companies and businesses to address.

However, Warren Buffett has to have a stance on the subject because of the variety of companies that he owns and supports, many of which use fossil fuels. The Berkshire Hathaway Energy company still uses coal in addition to natural gas and more sustainable solutions like wind and solar energy. Buffett himself, therefore, definitely has a dog in the race, although his opinions might be surprising to some.

Earlier in 2017, Buffett was asked to comment on how the possibility of global warming could effect the company’s insurance market. This might seem like an odd request at first, but major weather and storm damage is sometimes covered by homeowners, business, and auto insurance. If global warming happened and the weather did considerable damage to property, then it’s likely that Berkshire’s insurance businesses would take a hit. But Buffett said he wasn’t really concerned with it.

“I have not seen anything yet that would cause me to change the way we look at evaluating quakes, tornadoes, hurricanes by atmosphere,” Buffett told CNBC in an interview on the topic. “Now, that may happen some day,” Buffett said. He went on to conclude that if the risks went up then the company would simply increase the premiums to compensate.

However, when asked about his personal opinion on the topic of global warming, Buffett’s answer was slightly different.

“I believe the odds are good that global warming is serious. There’s enough evidence that it would be foolish to say there’s a 99% chance it isn’t a problem. In this case, you have to build the ark before the rains come,” Buffett said in a 2007 shareholder meeting. “If you have to make a mistake, err on the side of the planet. Build a margin of safety to take care of the only planet we have.”

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