Climate Change Can Cause U.S. Households ‘Significant Financial Strain’

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Households can experience significant financial strain through pressures to income and expenses due to climate hazards, a report from the U.S. Department of Treasury shows.

The report, The Impact of Climate Change on American Household Finances, adds to the department’s work on broader issues around climate change and economic growth and stability. It examines the impacts of climate change on U.S. household finances, with a focus on households that may be most adversely affected.

The report explores the impacts of climate hazards that may harm people, property, resources and the environment.

“Climate hazards can cause widespread physical damage and force interruptions and closures of normal operations of businesses, governments, and other critical services,” the report states. “As a result, households can face financial strain from lost income and higher costs or reduced access across a range of consumer goods and services.”

Climate change may also damage or destroy property, increase the cost of paying for utilities, and add to healthcare costs, the report shows.

“Climate events and conditions can result in physical injuries, including those requiring medical care,” the report states. “For impacted households, climate-related hospitalization or medical services can lead to an overall increase in healthcare expenditures.”

Florida

Florida often seems like ground zero as an example of the ill-effects of climate change, and new study shows that local governments there – and possibly in other places – that are vulnerable to extreme weather events are financial peril from increasing costs that may undercutt property tax bases.

The study, Can Florida’s Coast Survive Its Reliance on Development?, entails a statewide assessment of how sea level rise will affect Florida’s municipal revenues. The researchers paired the assessment with a statewide survey of coastal planners and managers to find out how they are funding climate adaptation.

“We found that more than half of Florida’s 410 municipalities will be affected by sea level rise, exposing on average almost 30% of local revenues,” the study states. “Yet, though climate impacts will significantly stress local fiscal health, we found no relationship between cities’ prioritization of climate adaptation and their fiscal exposure.”

The study forecasts that municipal revenues “will become increasingly eroded by climate impacts and market responses.” It shows that one-third local revenues are generated by 211 buildings in areas that will become chronically flooded.

“Property tax revenues may decline as insurance companies and property markets downgrade property values to reflect climate impacts, such as increasing flood risks and wildfires,” the study states. “Already, a growing number of insurance companies have decided to stop covering some regions and types of weather events, raise premiums and deductibles and drop existing policies as payouts rise in the wake of natural disasters. Growing costs of insuring or repairing homes may further hurt property values and increase home abandonment.”

Record Heat

The records broke by the global average temperature for September has climate experts reaching to describe the phenomenon.

“This month was — in my professional opinion as a climate scientist — absolutely gobsmackingly bananas,” Zeke Hausfather, a researcher with Berkeley Earth, said on the social media platforms Bluesky and X.

September broke the record for the month set in 2020 by 0.9F, data maintained by the Japan Meteorological Agency and the EU’s Copernicus Climate Change Service shows. The temperature anomaly for the month was roughly 1.7C above pre-industrial levels, which is above the symbolic 1.5C mark set as the stretch goal in the Paris Agreement, Bloomberg reported in an article on Insurance Journal.

“We’ve never really seen a jump anything quite of this magnitude,” Hausfather said.

The global average temperature this year has also seen a boost from El Niño. Other factors may also be pushing temperatures up incrementally, such as a decline in cooling aerosol pollution from ships.

Hausfather said September 2024 may be unlikely to have all the same factors, and consequently may be not as extreme. However, he called September 2023 a “sneak peek” of what the back-to-school month may feel like in a decade as climate change pushes temperatures higher, Bloomberg reported.

Montana

Montana’s attorney general is appealing a landmark climate change ruling finding state agencies aren’t doing enough to protect a lawsuit’s 16 young plaintiffs from harm caused by global warming.

The state filed notice that it is going to appeal the August ruling by District Court Judge Kathy Seeley. The judge found the Montana Environmental Policy Act violates the plaintiffs’ state constitutional right to a clean and healthful environment, a 1971 law that requires the state’s agencies to consider the potential environmental impacts of proposed projects and take public input before issuing permits, the Associated Press reported.

The Legislature earlier this year changed the law so the state Department of Environmental Quality would be required to consider greenhouses gas emission effects when issuing permits for fossil fuel projects unless the federal government declares carbon dioxide a regulated pollutant.

Montana is one of only three states with the affirmative right to a healthful environment in their constitutions, which was a key argument tin the Held v. Montana youth case.

In September, six youths from areas in Portugal hit by wildfires and heatwaves took on 32 European governments, alleging in court that their failure to act fast enough on climate change is a violation of their human rights. The case is the largest climate case to be heard by the European Court of Human Rights (ECHR) in Strasbourg, Reuters news service reported.

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Topics Florida USA Climate Change

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