Cashing In on Climate Change

A friend of mine bought a house in Houston last year. The day he moved in, a neighbor walked across the driveway to introduce himself: “I’ve been here 40 years. Never floods.” My friend already knew this. He’d done his research. Not 12 months had passed since Hurricane Harvey inundated East Texas; his own relatives were just moving back into their homes. Of course he’d bought on high ground. In a city where new weather patterns and human development have stretched flood plains beyond what the FEMA maps show, who wouldn’t?

In his own small way, my friend is a climate investor now. He’s not alone. Climate will soon be changing the way you spend your money too. The coming upheaval—and our response to it—is working its way into the price of your coffee, your electricity, and your car. Like the microplastics discovered in the virgin snow of the Pyrenees, the climate crisis has permeated every single sector of the global economy.

The conventional wisdom about climate change is that it will limit economic growth. In a working paper last month, a team of international economists estimated that unchecked global temperature increases will chop 7.2 percent off per capita GDP by 2100. Many argue these models fall far short of capturing the full span of risks and tipping points a planet cooking in a carbon dioxide haze might face.

But there will also be winners—people, places, and firms that wind up, whether by design or by coincidence, in a position to profit from the crisis and the ways we respond to it.

In the short term, there are already opportunities to monetize misfortune—like by gambling on storms whose strength has likely been enhanced by climate change. Florida, for example, has a destruction-based betting market in the form of frozen orange juice futures, which spiked when early Hurricane Dorian forecasts had growers panicked—then plummeted when the storm turned north. The Dallas portfolio manager Rod Hinze saw an opportunity in undervalued hotel assets in Houston before Harvey and South Florida before Irma. “What [sellers] don’t realize is the demand in short-term housing after a hurricane like that, it’s astronomical,” he told Bloomberg. “We saw occupancy go to 100 percent in a lot of those hotels. … We didn’t crush it. But we made 25 percent, 30 percent, pretty quick.”

The longer term is more complicated, because it requires anticipating the coin flip between cataclysm and resilience. Putting money on the climate crisis can be cynical or hopeful, gimmicky or serious, cunning or naïve. It all depends on your vision of the future. McKenzie Funk’s 2013 book, Windfall, a rollicking journey through the world of climate profiteers, begins with a 2008 faux-rainforest party for Deutsche Bank’s DWS Climate Change Fund. DWS bought into green tech like smart electric meters but also agriculture giants like Monsanto, whose genetically modified seeds would produce drought-resistant plants. A little bit of mitigation, a little bit of adaptation. One problem: By the time Funk’s book came out, the fund had been shut down for poor performance.

Doomsday bunkers beneath Kansas, a New Zealand passport, a gas mask—these are bets on a downward ecological spiral. So, in its way, is Maine’s excitement about new trade routes, and Finland laying fiber optic cable under the North Pole to Japan.

More common, surprisingly enough, is the bet on a world that gets its act together to price carbon, a world where shipping companies practice “slow steaming” to limit their fuel consumption and international air travel becomes (again) a special occasion for all but the very rich. There are reasons to have hope. When the CDP asked the world’s 500 largest companies to analyze the risks and opportunities of climate change this year, more companies saw opportunities than risks. Most of those opportunities were associated with the transition to clean energy—not the apocalypse. As an example of the type of mobilization that might be in the cards, Ban Ki-moon’s Global Commission on Adaptation recommends investing $1.8 trillion in early warning systems, infrastructure, water resources, mangrove forests, and crop production between 2020 and 2030.

Despite the conviction that we have locked ourselves into a future of vanishing glaciers, the outlook from the C-suite is surprisingly cloudy, even when it comes to sectors whose trajectory should be obvious—like coastal real estate ($1 trillion a year in losses by 2050) or air conditioners (buy, buy, buy). Right now, coastal real estate prices remain virtually impervious to the rising tides, while air conditioners are a less obvious winner than you’d think.

Below, you’ll find stories about the inevitable next level of corporate consciousness: people who have positioned themselves to make money as the planet warms. Theirs are assets for which demand rises along with CO₂ levels in the atmosphere; you can think of them as climate goods.

The moral valence here is murky. This is not a package about bankers getting rich while the world burns. In some cases, the line between getting rich and providing an essential adaptation service is not so clear. The two fastest-growing occupations in the United States, according to the Bureau of Labor Statistics, are solar panel installers and wind turbine technicians.

But winning, of course, is only a relative term. There is no point where we choose between global cataclysm and cooperative carbon phaseout—it will be one and then the other, a centurylong dance between destruction and adaptation. One day, your business is set up to help the world mange its warming oceans. The next, it has been destroyed by a hurricane.
—Henry Grabar

The Lure of Toxic Clothes

A warming planet means more cases of that telltale bull’s-eye rash brought on by Borrelia burgdorferi. Reported cases of Lyme disease in the United States have tripled over the past two decades, according to the Centers for Disease Control, thanks to factors like suburban development in forested areas (ticks’ neighborhoods) and an increase in the number of deer (ticks’ houses, at least until they trade up to you).

And then there’s climate change. In a paper titled “Ticking Bomb,” researchers at the Mayo Clinic project that if the planet heats as expected, temperature increases alone could cause Lyme occurrences to increase another 20 percent in the U.S. by 2050.

All of this has created an emerging market for tick-pocalypse fashion. You can already purchase an anti-tick T-shirt, anti-tick pants, and a polka-dot anti-tick infinity scarf (available in blue, tan, and pink). On a weirdly warm March night, you might relax in an anti-tick hammock, while your dog sports an anti-tick tank top and lounges on a bright orange anti-tick dog bed.

These goods are all “impregnated”—to use the technical term—with permethrin, an insecticide that’s also used in lice treatments. When applied to clothing, it repels mosquitos, fleas, ants, and flies, and paralyzes ticks after just a minute of contact, causing them to fall off your body rather than burrow into your skin. Insect Shield, founded in 2001, sells its own permethrin-impregnated wardrobe, treats the products of more than 75 other brands, and offers direct-to-consumer permethrin treatments, transforming your favorite button-down into a button-down that repels ticks. “People aren’t just buying [our stuff] when they know they are going to be in a tick-infested area,” Janine Robertson, who does marketing for Insect Shield, explained. “They’re buying seasonally, to protect themselves even in their own backyards.”

Anti-bug fabric for civilians might sound like a way to squeeze money from nervous folks—after all, there are other measures to take against ticks, like using DEET, which Consumer Reports and Wirecutter still recommend as a first line of defense. But the clothes have found a true fan in Thomas Mather, the director of the University of Rhode Island’s Center for Vector-Borne Disease, who has branded himself as “the Tick Guy.”

In a 2011 study on treated clothes, Mather and his team applied deer ticks to 15 (presumably insane) volunteers, half of whom were wearing anti-tick treated clothing, and half of whom were wearing regular old outfits. (Insect Shield donated socks, shirts, and shorts for the study, but funding came from elsewhere.) They found that participants wearing the treated clothing received about one-fifth the number of tick bites compared with the control group. Impregnated socks and sprayed shoes had the biggest effect: The researchers calculated that they reduced the odds of getting a tick bite by a factor of 73.6, versus 4.74 and 2.17 for shorts and shirts, respectively.

But do we really need an anti-tick tank top for our dogs? Yes, says Mather: “I think it’s important to think about your pet as not just your friend, but as a vehicle for ticks to get to you.”
—Shannon Palus

Canada’s New Corn Belt

For Tom Eisenhauer, betting the farm on climate change has paid off faster than he ever expected.

In 2009, the former investment banker co-founded Bonnefield Financial, an outfit that buys Canadian agricultural land and then leases it back to farmers at a profit. Part of the plan was to wager on remote stretches of Canadian prairie that might benefit from global warming. The firm hoped rising temperatures would let planters replace standbys like canola and wheat, which have traditionally thrived in the country’s colder climes, with more valuable crops that need a longer growing season, like soybeans. That, in time, would push up land values, and let Bonnefield Financial collect more rent.

Eisenhauer and his team thought it might take a couple of decades for those changes to take place. Instead, the shifts often happened in just five years, and sometimes faster. “It’s been remarkable,” he said. “You’re now growing beans. You’re now growing soy. In some areas they’re experimenting with corn.”

Buying up farmland as an asset and renting it out to an operator is not a novel idea—it’s a well-established global investment strategy that’s controversial with politicians and popular with major institutional players like pension funds and university endowments. (Harvard alone has reportedly invested $1 billion in various ag holdings). In the United States, about a third of all agricultural acres are owned by landlords who do not actually turn the soil.

Fundamentally, it’s a bet that people need to eat. And it’s even sturdier given that the world will need to feed an additional 2 billion mouths by 2050, according to the United Nations.

Which brings us back to the land of Labatt Blue. Climate science is full of uncertainties. But most projections suggest that as the Earth warms, countries at higher latitudes—most notably, Canada and Russia—stand to see more precipitation and, potentially, longer growing seasons. Some research has suggested that the world will lose some of its usable farmland, too—sadly, much of that from Africa.

As Eisenhauer attests, decades of warming seem to have reshaped Canadian cropland already. More farmers there have begun planting corn, whose northern future is bright. “Today, the U.S. corn belt is in Iowa, Illinois, Indiana,” Cargill CEO David MacLennan said in 2016. “In 50 years, it may be in Hudson Bay, Canada.” Meanwhile, the country’s acreage dedicated to ever-valuable soybeans has just about doubled in a decade. Some of those advances are due to improvements in seed genetics. Some of it is probably due to better weather.

There are, of course, reasons to be skeptical about whether investors can really predict the weather 20 years out. Eisenhauer told me that his firm consults with climate researchers, employs an in-house team of agrologists, and maintains an extensive geographical information system to churn through data. But experts say predictions about what will happen to land on the local level involve immense amounts of uncertainty. Deepak Ray, a senior scientist at the University of Minnesota’s Institute on the Environment, told me that it was probably safe to guess that buying farmland in Canada is a better investment than land in, say, southern Africa—but that he wouldn’t want to “drill down further.”

It’s also possible that extreme weather like droughts and floods will negate the benefits of warmer temperatures or leave Canadian agriculture worse off on net. But “not as bad” might still be good enough for investors. About a year ago, one of Eisenhauer’s clients emailed him an article about disasters in store for the world as it warms, along with a little note. “Look, I feel really bad about this,” Eisenhauer recalls it saying, “But I think we’re going to make a lot of money.” He was, of course, half-joking.
—Jordan Weissmann

The Air Conditioner Feedback Loop

Climate change provides a terrifying boon for the business of refrigerants. It’s a feedback loop of misery and profit: As the Earth gets hotter, people spend more on cooling; all these newly purchased A/C units use a lot of energy, making the warming problem worse. It’s not just the juice—air conditioners also use refrigerants like hydrofluorocarbons, or HFCs, that are ultrapotent greenhouse gases on their own. And when your A/C unit is in operation, it pushes heat from your room into the street, a process that can raise local temperatures by a few degrees at night.

In other words, cooling is climactic quicksand: The more we use A/C to fight the heat, the hotter we become.

The depth to which we’ll sink into this trap appears to be extreme. Right now, there are about 1 billion air conditioner units in use around the world. That number is projected to double, at the very least—and maybe triple or quadruple—by 2050. Air conditioning is already implicated in 6 percent of all the electricity used by the United States; according to a 2018 report from the Rocky Mountain Institute, the energy use associated with the coming spread of air conditioning could produce, all by itself, an additional half a degree Celsius of global warming by the end of the century.

Doubtless this all bodes well for A/C manufacturers. Stock prices in the major companies, most of which are based in China, have indeed been going up. But a broader view of the industry suggests that climate change is hardly the best-case scenario.

That’s because the scary feedback loop—where warming pushes up demand for A/C, and cooling pushes warming—isn’t the hottest factor driving A/C sales.

First, there’s population growth—67 million additional new humans every year over the next 30 years—which boosts demand for cooling even when the number of cooling-degree days remains the same. The aging of the population could also be spurring increased sales, since older people are more sensitive to heat and thus more in need of air conditioning (even though they do not always choose to use it). The ongoing shift of the population in the “global south” into cities—which are hotter than the nearby countryside—provides yet another vector for the spread of cooling tech.

Most important, though, is the rising standard of living in the developing world. No matter how much people might want or need air conditioning, they won’t be able to get it without sufficient wealth and access to electricity. That’s why you’ll find A/C in 90 percent of U.S. households and just 7 percent of India’s, despite our much, much cooler climate. As India’s economy grows, the use of air conditioners in that nation is expected to explode. This has already happened in China, where A/C reached just 1 percent of urban homes in 1990, 63 percent in 2003, and nearly 100 percent as of 2010. That’s not because it got hotter in those 20 years (though it did, slightly).

Climate change could accelerate this trend in India, as it would in other warm-weather, middle-income countries such as Brazil and Indonesia. (It’s also pushing sales in Europe, whose cultural resistance to A/C is melting in the heat.) But this is all a gentle swell atop a tidal wave. More than 20,000 Indians have died from heat exposure just in the past quarter-century. The demand for air conditioning—an urgent need for it—exists already in these countries, climate change be damned.

More importantly, climate change could affect the GDP growth that is the main driver of A/C demand. In 2015, two economists put out a careful study of the use of air conditioners in Mexico, using data from 2009–12. Then they modeled how a pair of climate change scenarios—one more hopeful and the other very dire—might affect this. (Both scenarios assumed a backdrop of medium economic growth.) At present, the authors said, 13 percent of Mexican households use air conditioners. In the business-as-usual climate change scenario, they predicted use would shoot up to 81 percent by the end of the century. But even in the hopeful scenario, under which emissions peak in 2040 and some additional warming occurs, they guessed that the prevalence of A/Cs would still more than quintuple, landing at 71 percent. All else being equal, the dire climate change model prompts slightly more air conditioning purchases.

Still, this dire scenario presumed no impact on economic growth, which is not terribly realistic. For manufacturers, this small stimulus from unchecked warming can’t be worth all the negative consequences. After all, the mere existence of the intuitive, terrifying climate-quicksand feedback loop exposes the cooling industry to both consumer backlash and a growing raft of industrial regulations. There’s been a recent push for more stringent efficiency standards, for instance, and the Kigali Amendment to the Montreal Protocol, passed in late 2016 (and then stalled by the Trump administration), prescribes a large-scale shift away from HFCs.

Certainly you’d rather, in a warming world, be selling air conditioners than space heaters. But if climate change only helps the cooling merchants at the margins of their business—and if, indeed, it does slow global economic growth in the long term—then they, just like the rest of us, would be much better off without it.
—Daniel Engber

Houses Will Rise

On a quiet block in Highlands, New Jersey, five huge jacks are lowering a blue clapboard house into place. It comes to rest atop two cinderblock walls, which frame a new garage and—more importantly—raise the house about 10 feet above the street, clear of the 100-year flood plain.

Each of the nine houses on the east side of this block now rests on an elevated foundation. Eight have gone up since Superstorm Sandy, which brought an 8-foot storm surge through this tiny bay-front town. Two of every three Highlands buildings were so damaged that they could only come up to code by coming up above the base flood elevation. And Highlands isn’t unique—all along the Jersey Shore, it’s been a gold rush for firms like Hale Built House Raising, whose operations manager, Eve Burritt, is looking on as the house comes to rest.

Burritt has a background in environmental studies. When I ask her if house-lifting is the future of American coastal life, she brings that up: “Coming from an ecological background, everyone should get the hell out,” she tells me. But she acknowledges that most people don’t want to leave, which is why she’s in the business she’s in. “In the interim, where we have established communities,” she says, “elevation is part of the solution.”

That’s certainly been New Jersey’s strategy. Federal disaster relief made it possible for thousands of coastal homeowners who sustained damage during Sandy to lift their flooded houses above FEMA’s base flood elevation. Burritt’s firm got into house-raising around then—one of many outfits that saw an opportunity in the stimulus that followed Sandy. Other lifters came to the tri-state area from Florida, the Gulf Coast, and even the Midwest to ply the trade.

They say anything and everything can be raised—if you’ve got the money. The bill to elevate even a modest-size home can reach into six figures. Half of the housing units in the 100-year flood plain are more than 40 years old, making it less likely that a lift pencils out for homeowners. As the memory (and federal money) of disaster fades, builders say, business gets awfully slow.

Hale Built still lifts three to five houses a week during the summer in New Jersey. But it’s also opened up a branch in Louisiana, and it may bid on jobs in Texas, too, as the Hurricane Harvey recovery money starts to flow. The big question, for contractors who have learned the trade, is where to set up shop.
—Henry Grabar

The Private Firefighting Market Is Heating Up

Over the past 50 years, the average size of wildfires in California has increased by approximately 800 percent, helped along by hotter, drier summers and new patterns of residential growth. In 2018 alone, wildfires destroyed over 10,000 buildings, cost billions of dollars in damages, and took dozens of lives. But for private firefighters, these increasingly severe fires have spurred a boom in business.

Decades ago, private firefighting was mainly a luxury service for ultrarich clients with grand estates, like Ellen DeGeneres and Kim Kardashian. Working independently from public fire departments, these private crews would be dispatched to guard individual homes from encroaching flames.

As the fires have become a more frequent feature of life in California, though, insurance companies are bankrolling a big expansion in the private firefighting sector. Companies like USAA, AIG, and Chubb are finding that—at a certain house price point—it’s much more cost-effective to protect homes than to rebuild them. A growing number of homeowners insurance policies for customers in high-risk fire zones now include the service, which is currently available in 18 states. Beyond beating back the flames, these private crews also prep houses by spraying retardant around the property and clearing out dry vegetation.

The proliferation of private firefighting services has been controversial to say the least. County fire departments have complained that private crews often do not coordinate with official first responders very well, and that the presence of extra civilian firefighters can be a liability.

Critics further note that access to these private services is prohibitively expensive. Homeowner policies that include the protection can cost anywhere from a few thousand to tens of thousands of dollars per year; the policyholders who qualify for AIG’s Wildfire Protection Unit services include 42 percent of Forbes’ list of the 400 richest Americans. It can also cost $25,000 per day for an individual to directly hire a private crew—expensive, but probably still cheaper than rebuilding your house.
—Aaron Mak

Breathing Under Patent

As the atmosphere heats up, more people will have trouble breathing. Asthma researchers and doctors I spoke to outlined a number of reasons to expect more diagnoses and more attacks as the amount of carbon in the atmosphere increases: a longer and more intense pollen season, ozone smog in urban neighborhoods, mold from floods, and particle pollution from wildfires. That’s good news for pharmaceutical companies that sell asthma medications, which already bring in huge margins.

“The cost of access to medication is the single largest thing we hear about from our community,” said Kenneth Mendez, CEO of the Asthma and Allergy Foundation of America. The disease, which affects nearly 8 percent of the U.S. population, sets the typical patient back more than $3,000 a year in medical costs.

That asthma medication is a moneymaker partly reflects a familiar pattern of dirty tricks by manufacturers. Drug companies stand accused of conspiring to raise prices on generics, such as albuterol pills, by “more than 3,400 percent, from 13 cents a tablet to more than $4.70,” a price-fixing antitrust lawsuit brought by 47 states argues, according to the Washington Post. A separate group of firms worked to keep inhalers under patent, and expensive, by simply changing the propellant technology.

The most intriguing development in the field is a set of new medicines called “biologics,” which physicians say can be “game-changers” for people whose severe asthma isn’t helped by regular steroids. The sticker price for treatment is often in the low five figures. “To meet available measures indicating cost-effectiveness,” doctors wrote earlier this year, “prices would have to be reduced by a minimum of approximately 60%.” The most well-known of these biologics, Xolair, which is developed from rodent cells, has been a “blockbuster” for Novartis and Roche. A handful of new asthma biologics have hit the market in the past five years.

Those developments have everything to do with the American health care system and little to do with climate change. But if you wanted to pick a field of medicine to bank on for the 21^st century, you could do worse than asthma.
—Henry Grabar

Kill the Bugs

Aedes aegypti and Aedes albopictus, two mosquito species that serve as vectors for chikungunya, dengue, yellow fever, and Zika, have long been contained to parts of the world hot and wet enough to sustain them. But climate change (along with human movement) will expand these hospitable zones significantly. That means that a lot of people who currently don’t have to worry about mosquito-borne disease—residents of cities like New York and Chicago—will have to start. And it will cost us.

In places where dengue is already endemic, it takes a huge financial toll. Singapore, for example, spent about $1 billion annually between 2000 and 2009 on dengue—half of which went to fighting mosquitos. The World Health Organization’s recommendations for Aedes control include the use of screens, long sleeves, and spatial repellents like coils and vaporizers in the home. The American Mosquito Control Association recommends physical alteration of their habitat, biological control (like releasing fish to eat larvae), and the targeted release of pesticides.

Yet the present state of anti-mosquito work in the U.S. could politely be described as ramshackle. Rather than, say, the Centers for Disease Control and Prevention directing efforts, there are more than 700 entities reporting to all other kinds of local and regional departments, as Maryn McKenna reported during the Zika outbreaks of 2016. No one is even sure how much we spend on it now, though one thing is for sure: “Doing vector control properly is very, very expensive,” said Joe Conlon, an entomologist and spokesman for the American Mosquito Control Association. Districts like Florida’s Lee County already budget $24 million a year for tracking, spraying, and digging.

But let’s face it: All of this public prevention isn’t our style. We’ll probably end up spending on mosquito prevention ourselves, as we did during the 2016 Zika outbreaks, by buying lots and lots of insect repellent. In 2016, CBS reported that S.C. Johnson and Spectrum Brands were both working overtime to meet customer demand for bug spray. Another lesson from 2016? During the outbreak, the New York State Attorney General’s office sent cease-and-desist letters to seven companies marketing ineffective “natural” remedies or ultrasonic devices to ward off Zika-bearing mosquitoes, saying they “simply don’t work.” Hucksters will profit too.
—Rebecca Onion

Outlook Sunny for Michigan Grapes

Bordeaux, Burgundy, Napa? So 20^th century. Soon, the world’s best wine may be just as likely to come from overlooked terroirs like England, Canada, and—shudder—Long Island.

Like many places on Earth, vineyards are seeing increased average temperatures. And where some of the traditional wine-producing hubs are facing new weather patterns that defy hundreds of years of winemaking wisdom, other regions are finding that ever-so-slightly warmer days are just the ticket for taking their wine from très bon to supérieur.

“Nobody’s celebrating climate change, and I’m certainly not celebrating climate change, but I’m almost careful to say it’s had a positive effect on our wines,” says Darryl Brooker, president of the Mission Hill Family Estate in the Okanagan Valley of British Columbia, Canada. “We are definitely growing varietals that we couldn’t have grown 20 and definitely 30 years ago.” Brooker’s own high regard for his wine, he says, has been validated by the recent recognition Mission Hill has received in international wine competitions and the higher prices that consumers have been willing to pay for it.

Scientists have often lamented that the figure of 1.4 degrees Fahrenheit—the amount that the average global temperature has increased since 1880 according to NASA, most of it concentrated in the past four decades—fails to move the masses. But grapes are more sensitive than we are. “Wine grapes grow across a fairly narrow range of climates in the mid-latitudes, typically,” explains Gregory Jones, director of the Evenstad Center for Wine Education at Oregon’s Linfield College. “They’re kind of a specialty crop with a narrow geographic climate range. But then when you take wine grapes and you go in and look at any one individual variety, whether it be syrah or merlot or whatever it is, they even have an even more narrow range.”*

At Mari Vineyards in Traverse City, Michigan, winemaker Sean O’Keefe says he has seen the type of grapes that it’s possible to grow in the region transform over his lifetime. When his father first planted grapes in the 1970s, “we really struggled to ripen just white grapes,” he says. (The conventional wisdom holds that white wine grapes can thrive in cooler temperatures than can reds, which are more delicate.) “At this winery I’m at now, we’re growing a lot of Bordeaux varietals.” But, he adds, climate change has also brought more extreme winters. “We might overall get warmer, but we’ll still have these brutally cold winters here and there that will kill our vines.”

Even beneficiaries think upheaval will outweigh temporary upsides for the $300 billion wine industry. “It’s basically a pact with the devil,” says Roman Roth, winemaker at Long Island’s Wölffer Estate Vineyard. The sandy farmland has in recent seasons enjoyed hot, sunny summers, resulting in a “wonderful combination of rich wine and yet elegant wines ,” Roth says. “You will make the best wine in the world in three years, for example. But then you could have the fourth year where you have maybe two hurricanes go over your vineyard and you won’t have any grapes harvested.”
—Heather Schwedel

Starting the Market for Coral

Since the 1970s, more than half of the live coral cover on Caribbean reefs has died, thanks to a combination of overfishing, disease, and bleaching caused by climate change. Certain species have been whittled down to less than 3 percent of their former populations. But two American entrepreneurs, Sam Teicher and Gator Halpern, have a plan to fight the destruction. They even think they can make money doing it.

Left on its own, coral grows too slowly to make farming and planting it a viable restoration tactic. But 13 years ago, David Vaughan, a researcher at Florida’s Mote Marine Laboratory, noticed that a small coral bud that had broken off from the larger colony grew faster than those still attached. Vaughan had discovered microfragmentation, which allows coral farming to proceed up to 50 times faster than it had before.

Teicher and Halpern are currently deploying this method to grow their product. The pair’s big idea is about how to harness capitalism to regenerate the reefs we have destroyed. Their company, Coral Vita, bills itself as the world’s first centralized land-based coral farm, one in a wave of enterprises that will try to rebuild ecosystems ruined by climate change—for a price.

Who would pay for such a thing? Hotels and resorts hoping to bolster tourism. Governments trying to protect their shorelines. Ecotourists who want to understand one early bit of geoengineering.

“If we can make this work, we can spur investment for other kinds of ecological restoration and jump-start a restoration economy,” Teicher said. He believes that businesses like theirs could grow into large, profitable companies, inspiring imitators and pulling money into environmental work while still avoiding the pitfalls of what he calls “traditional and harmful capitalism.” “I don’t see any tension there,” he said.

There’s another less lofty reason commercial coral restoration has reliable customers: Construction crews or shipping interests enter legal agreements to replace what they’ve destroyed. This form of remedial environmentalism ensures that some large companies will maintain an appetite for coral restoration services even if an economic downturn boots sustainability programs from corporate agendas. “No one should say, ‘We can restore the reef, so that’s an excuse to damage them,’ ” Teicher said. “But it’s better to restore them than do nothing.”

Even if Coral Vita can successfully commercialize large-scale reef restoration, the problem that makes the business viable might limit just how much it can expand. Judy Lang, the scientific coordinator for the Atlantic and Gulf Rapid Reef Assessment project, said that while planting coral has proved promising in some conditions, it’s pointless to plant new corals if the waters they live in aren’t healthy enough to sustain them. Teicher said Coral Vita will only plant its corals in waters with no ongoing threats. The company has other plans for making the reefs it does replant heartier and more resilient. (One tactic, known as “assisted evolution,” involves shocking the young corals with warmer water to help prepare them for a warmer life.)

Ultimately, though, the work is just a Band-Aid if bigger changes aren’t made. “The best thing to do with coral reefs isn’t to restore, it’s to stop killing them—to stop climate change,” Teicher said. Climate change also increases the frequency of hurricanes and other large storms, which can quickly destroy a reef, especially a recovering one. Teicher and Halpern learned this the hard way—their first farm was set up on a beach in the Bahamas. On Sept. 1, Hurricane Dorian, the cataclysmic Category 5 hurricane, barreled into it and then stalled there, pummeling the islands for two days and leveling entire neighborhoods. It’s likely climate change made Dorian slower, wetter, and stronger.

Teicher and Halpern’s founding coral farm was destroyed. The human toll was also massive: 50 people were killed and 1,300 remain missing. The Coral Vita team shifted immediately to relief work, and it isn’t yet thinking of the corals. Teicher, in an email, did not admit defeat. “We’ll rebuild,” he wrote. “And keep building in more countries.”
—Molly Olmstead

Additional reporting from Elena Botella, Aaron Mak, and Matthew Phelan.

This piece has been published as part of Slate’s partnership with Covering Climate Now, a global collaboration of more than 250 news outlets to strengthen coverage of the climate story.