With the presidential election less than four months away, the economy is reporting good news. At this time two years ago, inflation was over 9%. Last month, It dropped to 3% Meanwhile, wages continued to rise.
The bad news is that there is a new villain: let’s call it “climate inflation.”
Over the course of a generation, global climate change has progressed from science to heated political debate, and now A hotter worldThis has become a domestic problem that threatens the economic and physical security of American families.
Anyone worried about the rising cost of living and higher taxes should be worried. But climate change has not figured much in the presidential election, especially since Biden and President Donald Trump have polar opposite views on the issue. Trump and his newly nominated running mate, J.D. Vance, have both said: I don’t believe in global warming Climate change is a real problem, and Biden should be credited with doing more to combat it. More than any other president in American history
The physical risks of climate change are indisputable. In the last year alone: 28 major weather disasters (Each caused more than $1 billion in damages) The total damages were $93 billion, the highest ever recorded. Over $1.2 trillion In its reported damage figures, the government doesn’t count disasters with damages of less than $1 billion, so the actual toll was significantly higher.
But these numbers don’t tell us how climate change will affect families, including the impact it will have on their finances.
For example, air conditioning is no longer an option. Historic heat wave It threatens the lives of more than 100 million Americans. According to the Energy Poverty Climate Center, the average price of cooling a home is $719 this summerThis is a 9 percent increase from last year.
Extreme weather also increases food prices. One reason orange juice is becoming more expensive is 42 percent increase In April, the number increased from the previous year. The United States is about 15 percent Extreme weather in other parts of the world is affecting food prices here. One study found that rising temperatures could lead to higher food inflation. More than 3 percent per year Over the next 10 years.
One of the biggest household issues is the rising cost of home insurance due to increased weather events. According to the First Street Foundation, a climate risk research institute: Approximately 36 million households Faced with rising premiums and reduced coverage, homes in parts of the US are becoming uninsurable. Earlier this year, the BBC reported that property insurance premiums were ” A crisis unfolds across America — along both coasts and into the Midwest.”
According to the National Bureau of Economic Research, average insurance premiums in the U.S. have soared. 33 percent From 2020 to 2023. National Association of Realtors The average home insurance premium, currently $2,377, will rise another 6 percent this year, according to the association, but in climate-sensitive areas premiums will be even higher: Floridians’ average home insurance premiums will be $11,759 by the end of the year, the association said.
Major insurance companies such as State Farm, Allstate and Farmers have already withdrawn from California and Florida. 12 and up Home insurance companies have been declaring bankruptcy since 2019. Because most mortgage companies require insurance, families who can’t get or afford it may not be able to buy a home.
The broader economy has also been hit. Analysts say the US economy has been one of the strongest in the developed world since the pandemic began, mainly because Improving labor productivity. but Atlantic Council The commission projects that the United States could lose an average of $100 billion per year in lost labor productivity due to extreme heat. Losses in productivity are already affecting every region and sector of the national economy. The commission estimates that lost productivity could double by 2030 and increase to $500 billion nationwide by mid-century.
But the biggest threat to the economy is the so-called climate bubble. 45 percent of housing In the United States, approximately $22 trillion worth of forests are at risk of severe or extreme damage from floods, high winds, wildfires and heat waves.
the study It was published in the journal Nature Climate Change last year. Climate change reduces the value of risky properties, but we find that this risk is often not reflected in home prices. If climate risk were recognized and priced out, home prices could collapse, with an impact comparable to the subprime mortgage bubble that collapsed in 2008 and sparked the Great Recession.
“Despite the significant risks, weather risks related to climate change do not yet appear to be affecting consumer behavior in the real estate market. Americans are still relocating to flood zones, drought-stricken cities and in the path of hurricanes at historic rates,” it said. Bradley“Over the next few years, the risk of extreme weather events, from floods to wildfires, will dramatically increase, causing lenders, insurers and others to reassess millions of homes, potentially bursting the real estate bubble and causing prices to plummet for homeowners,” said John McCain, an analyst with a national law firm.
Climate inflation is a big problem. As we continue on a path of more extreme weather and increasing costs, inflation continues, grows, and perpetuates itself. We have brought global warming to a perpetual crisis.
But Trump and Vance Denying that climate change is a problemTrump’s record and Project 25 plan show that he will not only do nothing to combat global warming, but will also undo the progress Biden has made. For example, he and Republican lawmakers have Repeal key clean energy provisions of the Inflation Control Act.
The U.S. Treasury Further analysis Climate inflation. More extreme weather, rising household bills, higher insurance premiums, falling home prices, ineligibility for mortgages, lower productivity. Voters should ask themselves if that’s the future they want for their families.
William S. Beckerteeth Executive Director of the Presidential Climate Action Projectformer regional director for the U.S. Department of Energy; Author of several books” Climate Change and National Disaster Policy100 day action plan to save the planet.” and “The River Rise: People Living with Floods.”
