Is Buffett underestimating climate change risk?
Shareholder accuses lauded investor of failing to understand risks posed to Berkshire Hathaway

Warren Buffett, the most famous and successful investor on the planet, admits he has made some "dumb purchases" and bad judgement calls in his time.
But one shareholder is apparently accusing the Berkshire Hathaway chairman of perpetuating what could prove to be the most dangerous oversight of his career - failing to take account of the risk posed to the company's insurance businesses by catastrophic climate change.
Campaign group the Nebraska Peace Foundation, which owns one share of Berkshire Hathaway's common stock, published a resolution ahead of the company's annual general meeting next month calling for publication of a special report on the issue. Such a study might detail predictions of the cost of increased instances of extreme weather, in terms of damage to insured buildings and the like.
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Buffett responded by dismissing the idea in his annual letter to shareholders and saying that if anything, the company's insurance businesses might see profits pick up if climate risks materialise because policies are rewritten annually and premiums would surge. The rebuttal "sets the stage for a showdown at the annual meeting", says the Financial Times.
To be clear, Buffett is far from a climate change denier. He backed December's landmark deal between world leaders in Paris to limit global temperature increases at two degrees, while Berkshire Hathaway has amassed a portfolio of wind and solar energy generating companies that makes it the US's largest operator in the sector.
Meanwhile, in his letter, he said that climate change was like Pascal's Wager on the Existence of God - even a small chance that it is happening makes it worth taking action. "Call this Noah's Law: If an ark may be essential for survival, begin building it today, no matter how cloudless the skies appear," he wrote.
So in short, notes Bloomberg's Eric Roston, what Buffett is really saying is "climate change should be addressed… [but] it's not him (or someone like him) who should address it".
This, "is the elephant in Buffett's climate passage" and "a presentation of the climate conundrum in a nutshell… it's not anybody's responsibility to solve everybody's problem", he adds. One suspects the Nebraska Peace Foundation will try to gain a platform at the annual meeting to disagree.
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