WASHINGTON, D.C. – Joint Economic Committee Democrats today released a report that outlines the threat of climate change to the economy following the recent National Climate Assessment report. The report states that the increase in frequency and severity of extreme weather events continue to place the American economy at risk by threatening household wealth and property and upending insurance markets. The Federal Reserve Bank of Richmond projects that climate change could reduce annual economic growth in the United States by one-third over the next century. The report calls for immediate action to mitigate the economic damages of climate change.
“Climate change is one of the greatest threats the global community will face in the 21st century, and we are already feeling its disastrous effects,” said Senator Martin Heinrich (D-N.M.), Ranking Member of the Joint Economic Committee. “New Mexico and the Southwest face numerous economic challenges from climate change—including threats to crops, decreased water supplies and increased risk for wildfires. If we don’t act now on climate change, the financial threat to working families across this country will only grow. We must work to strengthen the thriving clean energy sector to mitigate the effects of climate change and create millions of jobs and economic opportunity.”
The report, “Failing to Address Climate Change Threatens the Economy,” details that economic damages from extreme weather events have increased drastically over the past few decades. In the 1980s, there were 28 events that the National Oceanic and Atmospheric Administration tracked as costing more than $1 billion in economic damage, totaling $169 billion. But from 2010 to today, there have been more than 100 high-cost weather disasters that totaled more than $662 billion in losses. The highest year on record was 2017, with $300 billion in losses. Climate change induces heavy expenses on the federal government, with the Office of Management and Budget estimating in 2017 that it cost the federal government more than $350 billion in the prior decade.
The report also highlights that sea level rise and flooding will cause damage and loss of property value in many communities in the United States, and that extreme weather events risk upending insurance markets. Within the next century, more than $1 trillion in homes and commercial properties will face an increased risk of chronic tidal flooding because of climate change. Extreme events have also created uncertainty in insurance markets, with mispriced risk and associated premiums. And, if insurers do correctly price climate change, premiums will likely rise for consumers. Furthermore, catastrophic weather events hit uninsured properties more often, with damages not covered by insurance increasing by 50 percent globally since 2004.
Click here to view the report online.