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The following is an excerpt from “This Week, Your Wallet,” an audio program produced by CNBC. Personal Finance a team Listen to the latest episode here. (Editor’s note: Audio clip starts at the 2:33 minute mark.)
Climate change has been described as ticking a time bombwhose threats extend beyond ecosystems and biodiversity to large financial impacts on households and the US economy.
These financial costs are largely the result of extreme weather events.
The White House released a report last week — the Fifth National Climate Assessment, issued every four to five years by the federal government — warning that heat waves, heavy rains, drought, hurricanes, floods and wildfires “are becoming more frequent and/or severe. ,” with “cascading effects” in all areas of the United States
“It’s no longer just a Florida problem, or just a Louisiana and New Orleans problem,” said Andrew Rumbach, senior fellow and co-leader of the climate and community program at the Urban Institute. “More and more people are experiencing these extreme events and they are bearing all kinds of different costs, direct and indirect, for those families.”
Here’s what to know, according to experts interviewed by CNBC during a recent discussion about climate change and its impact on personal finance.
We’re already feeling the impact — and it’s likely to get worse
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Weather-related disasters cost the United States at least $150 billion a year, according to the White House report, which calls that estimate “conservative.”
The United States now experiences a billion-dollar disaster every three weeks, on average; during the 1980s, this happened every four months, the report notes.
The economic toll—due to such things as water stress, agricultural loss, tourism impacts, declining real estate values, and damage to property and infrastructure—is expected to grow.
“Over time, any increase in climate change will gradually increase the economic cost,” Rumbach said.
Each additional degree of global warming translates into “increasingly adverse consequences”: Warming by 2°F is projected to more than double the economic damage of 1°F of warming, for example, the report said.
The effects can be “strange and unpredictable”
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The effects of climate change can be “strange and unpredictable,” said David Pogue, host of the “Unsung Science” podcast and author of “How to Prepare for Climate Change: A Practical Guide to Surviving the Chaos.”
“I prefer the term ‘global oddity,’ because warming is only part of it,” Pogue said.
For example, more than 3 million American adults reported being displaced from their home by an extreme weather event just last year, Rumbach said, citing data from the U.S. Census Bureau’s Household Pulse Survey.
In other words, 1 in 70 adults have been displaced by events such as hurricanes, floods and fires, according to the Urban Institute. a report Many of them had been away from their homes for less than a month, but others had been away for at least six months.
Even without property damage, evacuation leads to transportation costs, hotel costs and time away from work, which can disrupt wages and workplace benefits, Rumbach said.
“All those costs really add up,” he said.
I prefer the term ‘global oddity’, because warming is only part of it.
David Pogue
author of “How to Prepare for Climate Change: A Practical Guide to Surviving the Chaos”
Further, for every additional “hot day” per year, especially in Western states, the prevalence of workplace injuries increases by 5% to 15%, Rumbach said, citing peer-reviewed scientific analyses. There’s also $10,000 in additional emergency room costs per 100,000 people, especially among the elderly, he said.
In addition, for every 1% decline in crop yields, there is about a 0.1% emigration of the population — a significant impact both for places losing people and for those gaining them, Rumbach said.
Declining agricultural production may fuel higher food prices, experts said, and greater property damage is likely to fuel higher insurance rates.
There are ways consumers can prepare
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Americans can often hear about it ways to reduce their carbon footprint. But there are also steps they can take to prepare for the worsening effects of climate change.
“Government and corporations have adapted a long time ago: That’s why they’re building sea walls, and Starbucks is finding new mountains to grow coffee,” Pogue said. “But no one ever talks about the little one.”
The first thing to do, Pogue said: Look at your homeowners or renters insurance policy.
“You probably bought it years ago, trying to make it as cheap as possible,” he said. “But things have changed, and I think a lot of people are dismayed to find out that homeowner’s insurance doesn’t cover flooding. It just doesn’t.”
It’s no longer just a problem for Florida, or just a problem for Louisiana and New Orleans.
Andrew Rumbach
senior at the Urban Institute
Those with renters or homeowners should make sure they are not underinsured, Rumbach said.
He added, potential home buyers can consult tools to choose homes in areas with reduced climate risk. For example, Redfin offers climate risk ratings based on geography, he said.
Pogue also said there are potential ways for investors to strengthen their investment portfolio and have a positive impact on the environment.
Supporting an industry or company that is “green” “actually helps everyone,” he said.
The best approach would not be to invest broadly in solar and wind companies, for example — those are commodities that continue to fall in price, Pogue said.
Instead, it may involve investment in utility companies that get all their electricity from renewable energy sources, Pogue said. Thirty-eight states now have mandates to get a certain amount of power from renewable energy, he added.
Investing in the electric-vehicle revolution can include buying into companies that make electric car batteries or those that use lithium, a key component in electric car batteries, for example, he said.
(tagsTranslate)Disaster planning and response