The warming planet is taking a heavy toll on the US economy, with weather and climate disasters costing over $617 billion between 2018 and 2022. This is a record figure, according to the US Department of the Treasury, and it represents a significant increase from the previous five-year period, when disaster costs totaled $458 billion.
The impacts of climate change are being felt across the country, as evidenced by the growing number of Americans who are reporting economic hardship due to climate change. A recent study by the Urban Institute found that around 13% of Americans reported economic hardship over the prior year due to climate change. This includes expenses related to hurricane damage, flooding, and drought, as well as rising food and energy costs.
As temperatures continue to rise and extreme weather events become more common, the financial pain for Americans is likely to worsen. The Fifth National Climate Assessment warns that with each additional degree of warming, the US is expected to take a bigger economic hit. For example, an increase in global temperatures by 2°F is anticipated to double the financial impact induced by 1°F of warming.
A recent report by ICF, a consulting firm, found that climate change could cost Americans born in 2024 nearly $500,000, due to higher taxes and pricier housing and food, among many other factors. The report also found that the costs of climate change will be unevenly distributed across the population, with low-income households and communities of color being disproportionately affected.
The rising costs of climate change are already being felt in the housing market. As sea levels rise and storms become more intense, homes in coastal areas are becoming more expensive to insure and maintain. In some cases, homeowners are being forced to abandon their homes entirely. The Urban Institute’s Andrew Rumbach said, “The basic building blocks of our financial lives – housing, insurance, social welfare programs, taxes – will become more expensive or less valuable due to climate change, with lots of consequences for people’s wallets.”
The rising costs of climate change are also being felt in the food sector. Due to environmental changes, food inflation alone could rise by as much as 3 percentage points per year over the next decade, one study found. This will have a particularly significant impact on low-income households, who spend a larger portion of their income on food.
The warming planet is also having a negative impact on public health. The Natural Resources Defense Council found that health-care costs due to fossil fuel pollution and climate change already exceed $800 billion a year in the US. This includes the costs of treating respiratory illnesses, cardiovascular disease, and mental health disorders. As temperatures continue to rise and extreme weather events become more common, the health-care costs of climate change are likely to increase.
The rising costs of climate change are a major threat to the US economy and to the well-being of Americans. It is essential that we take action to mitigate climate change and adapt to its impacts.
