Can You Afford Climate Change?

Consumer pocketbooks are taking the heat. Climate change is no longer a theoretical issue that will happen at some distant point in the future, like 2050 or 2100. Already, unprecedented climate change is happening on a regular basis and clobbering the American capitalistic system via consumer pocketbooks. People can’t afford ordinary life. They’re priced out of the market. Everything is getting more expensive by the year, every year.

“We’re no longer in a world where climate change affects the economy, or where voters prioritizing economic or inflationary concerns are responding to something distinct from climate change—we’re in a world where climate change is the economy.”(Source: Everything’s About to Get a Hell of a Lot More Expensive Due to Climate Change, Wired, June 22, 2024)

According to Uncle Sam: “Already, over half of U.S. counties – home to millions of Americans – face heightened future exposure to at least one of the three climate hazards described in this report: flooding, wildfire, or extreme heat.” (Source: The Impact of Climate Change on American Household Finances, U.S. Department of the Treasury, September 29, 2023)

Every one of the threats is the result of human-caused climate change. Nobody has done enough about it, and it’s getting too late, too fast. Evidently, people don’t scream loud enough or when they do bitch and moan about living costs, not a word said about climate change. They’re missing the boat, the biggest boat of all!

The U.S. Treasury has identified three major ongoing climate change issues that ultimately hit consumer pocketbooks. For example, insurance costs for homeowners have turned into a choke hold, assuming insurance companies stay solvent in the face of mega-disasters. Indeed, this is a risk to the capitalistic system’s guiding light for every U.S. citizen, home ownership. Moreover, according to research published by the Bank for International Settlements (BIS), increasing climate risk protection gaps could pose a threat to financial stability to banks with large exposures to real estate, as climate change becomes a threat to the heartbeat of America’s financial system.

It’s gotten so bad that climate change can drain insurance resources in the blink of an eye: “California’s unprecedented wildfires in 2017 and 2018, likely fueled by climate change, wiped out twenty-five years’ worth of profits for insurance companies in that state. Globally, just three years, 2016 to 2018, caused more than 70 percent of insured losses from wildfires for the period between 1980 and 2018.” (Source: Climate Change and U.S. Property Insurance: A Stormy Mix, Council of Foreign Relations, August 17, 2023)

Accelerating risks and actual damage from climate change are spurring private insurers in the United States to limit coverage, thus imposing stress on local communities and straining the country’s overall economic health. State Farm, Allstate, AIG, Farmers, and Berkshire Hathaway have all reduced or completely stopped coverage in areas prone to wildfires and hurricanes, leaving homes uninsurable or hopefully some kind of state government assistance or go Full Monty with no insurance unless an underlying mortgage is involved. Over time, RE values will start to cave-in, and the American dream of home ownership, home sweet home, threatened, uninsurable because of capricious climate behavior.

In California alone, Allstate, American International Group, Chubb, Farmers, Liberty Mutual, The Hartford, Travelers, Tokio Marine and USAA have restricted climate-related risks. The state is one of the world’s largest RE markets. A recent LA Times headline d/d June 2024 tells a sorrowful story: With Fires Burning Again, is California Becoming Uninsurable?

Private companies are reducing coverage, concluding that the risks, and potential losses, threatened by climate change outweigh profits. So far, this primarily affects a handful of coastal states. Still, in other regions of the country insurers have substantially increased the price of property insurance. Homeowner costs are increasing fast and faster than people can afford to pay. Historically, insurers looked to past events to determine the risk of future damage occurring. Climate change, however, has brought new, unfamiliar extremes, e.g., longer heat waves that kink metal, sea-level rise that exceeds seawalls, flooding homes, high winds that shred rooftops, severe drought that buckles asphalt driveways, and wildfires that obliterate whole communities in mere hours.

Additionally, excessive global heat is becoming a major threat to air travel, which is paying a price with headlines like: Airplane Gets Stuck on Soft Tarmac Caused by Heat, Passengers suffer 8 hours of heat. As a consequence, consumers end up paying higher fares.

“From superstorms to heat waves to raging wildfires, the impact of extreme weather is already felt in every corner of the country. Every day that goes by without climate action is estimated to cost at least $254 million, based on recent trends, and the average yearly cost of inaction for the last five years has averaged $120.6 billion or $3,824/second.” (Source: Climate Inaction Costs Americans’ Nearly $3,000 Per Second, Climate Action Campaign, February 23, 2024)

As a result, the cost of living has become a very hot political issue with unrecognized, underappreciated climate change at the forefront. Crop battering storms, hurricanes, flash floods, and atmospheric rivers dropping buckets of rain are more frequent than ever before. Forget once-in-100-years; it’s now once-every-other-year. Meanwhile, extreme heat waves not only damage crops, excessively increasing grocery store prices, but also crank up costs to cool buildings. And in areas prone to disaster in the South, coastal, and Southwest insurers hike premiums for automobile insurance because of climate risks to cars.

Little wonder that people are confused about why living costs are so high. The media doesn’t identify far-out climate extremes when broadcasting stories about families that can’t get by, can’t pay bills, or God forbid, the 60% that cannot scrape together $500 for an emergency.

And quietly, assuredly agriculture crop yields wither when hit by extreme climate thanks to punishing heat and soil nutrition depletion amongst climate-related events that clobber yields, like floods, like landslides, like scorching heat, like hurricanes as supply chains are blown off course, increasing the costs of goods’ delivery. These costs are borne by individual consumers at some level. Yet high price tags don’t list the hidden impact of extreme climate, yet high living costs become a political football during every major election cycle. This is destined to get worse, radically threatening, unless fossil fuel emissions, at the origin of unprecedented climate change, are stopped.

On a large scale, by midyear this year 2024, the US experienced eleven (11) billion-dollar disasters, and lo and behold, tornadoes slammed Iowa, not known as Tornado Alley. Climate change is altering the course of storms. “Meanwhile, the already strapped Federal Emergency Management Agency faces a budgetary crisis, and sales of catastrophe bonds are at an all-time high.” (Wired June 22, 2024)

Extreme climate change costs get passed along to individual consumers and taxpayers. Like it or not, you are paying through the nose for climate change. And it’ll get much, much worse unless, and until, fossil fuel emissions are stopped. The fossil fuel “cost-of-living monster” has not been tamed via enough initiative to do enough soon enough.

Indeed, abrupt unprecedented climate change should be one of the most significant political issues of this century because politics on some level must fix it or home ownership will become a privilege for only the most privileged class, which is guaranteed to override and upstage the festering lingering pent up anger of four decades of “globalization” cancelling the middle class, now looking for scapegoats, which climate deniers feast upon by tossing to the gullible a big fat chunk of red meat, like dark-skinned people, but don’t blame climate change because it’s a hoax. How is it possible to get the message across that climate change is the major component of America’s risks of an unanticipated downfall, not other people?

Maybe focus on solutions instead of scapegoats.

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