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What are the effects of climate change costing consumers, on average?

What are the effects of climate change costing consumers, on average?

FINANCIAL NEWS

What are the effects of climate change costing consumers, on average?

Climate change: 5 things you can do to slow negative effectsClimate change experts say the world is at a “code red” when it comes to our climate. Here are 5 things you can do to slow effects of climate change.Staff video, USA TODAYFrom oil production to food shortages, droughts to hurricanes, earth’s warming climate is projected to affect all aspects of life. Experts’ warnings about the economic costs associated with climate change are already hitting consumer wallets.Weather-related disasters on U.S. coastlines and flood-prone regions have caused over $1 billion in damages, according to a 2020 report by the Environmental Defense Fund. Incidents of extreme weather events are also on the rise, according to the report, leading to costly disaster relief efforts.The Government Accountability Office reported in 2019 that over $450 billion has been spent on federal disaster assistance for climate change-related incidents since 2005. And the COVID-19 pandemic has exacerbated rising demands for disaster assistance, said Elgie Holstein, EDF Senior Director for Strategic Planning. “COVID-19 and recent climate disasters have shown that we must step up investment in preparedness now, instead of waiting for the next crisis to hit,” Holstein said in 2020.Expenses trickle down to homeowners and renters, who will be forced to pay higher insurance premiums for living near floodplains or in the path of forest fires and higher electric bills to keep homes cooler when temperatures rise.What are some of the expenses Americans can expect to see as a result of climate change?Energy costs The average surface temperature across the continental U.S. has risen an average 0.16°F per decade since 1901, according to the Environmental Protection Agency, but eight of the top 10 warmest years on record have occurred since 1998. “Because of the decisions that we have made as a society, and not having proper policy, we have to deal with a new normal,” Shay Bahramirad, vice president of New Initiatives and Outreach at the global IEEE Power & Energy Society, told USA TODAY.  “Historically, planning the electric power grid was for events that might happen once in 100 years. But we see those events happening a lot more and way more frequent in the past 10 years,” Bahramirad said.The average monthly electric bill for U.S. consumers rose from $104.52 in 2009 to $115 in 2019, according to the U.S. Energy Information Administration. But average monthly electricity consumption per customer also fell by 2.3% during this same time period, partly due to consumer trends toward high efficiency appliances, more energy efficient lighting and other energy-saving devices, according to the agency.►Shocking electric bill? Free changes can help you cut costs, save moneyA demand in fuel energy to heat homes is expected to decrease, the EPA reports, due to lower heating needs in the winter.Despite consumer efforts, the U.S. energy grid scored a C- on the American Society of Civil Engineers’ report card for America’s Infrastructure. The expense of upgrading that outdated energy infrastructure, Bahramirad said, will fall to the consumer.”That’s something that needs to be thought through very carefully around the country. And the cost associated with that gets socialized to people. That means that residential people and commercial and industrial consumers, they get impacted by increasing the bill,” Bahramirad said.Grocery billsA 2015 assessment by the U.S. Department of Agriculture found that production disruptions will limit local food supply worldwide, leading to price hikes, diminished food safety, interrupted transport conduits and other related difficulties as climate change progresses.The effects will be felt in the U.S. as the price and availability of imported foods change. As demand for food increases, strained domestic producers will face supply challenges on the global market.”Climate change is already affecting productivity. And of course, that matters for prices, because the more expensive production is, the more expensive food is going to be,” Brandon R. McFadden, associate professor at the University of Delaware, told USA TODAY. “So we’ve already seen the flow and productivity that’s going to get compounded.”One of the key causes for grocery cost increases is due to extreme weather induced by climate change.Droughts in the West and Midwest have had a big impact on the availability of popular grocery store items, given that water conservation efforts hit farms first.Goods like pecans and walnuts are extremely water-intensive, and farmers in the West are considering growing hay and alfalfa instead as the soil dries up. The cost of sugar has also increased due to heavy frost in Brazil, while wheat prices reached an eight-year peak due to continued droughts, CNN reports. Additionally, the cost of beef was affected by a drought in the upper Midwest that destroyed the grassy fields that cows feed on. This drought in tandem with supply chain issues and labor shortages have led beef prices to go up 17.6% in the past two years.In July, the price index for food consumed at home increased 0.7% due to price hikes meat, poultry, fish and eggs, according to an August CNN Business report. And according to the USDA, food-at-home prices went up 2.5% in 2021 compared to the previous year.Beef and veal had the largest relative price increase at 6.5% during this time. In just one month, from August to September, the price of wholesale beef increased 7.5%, according to the USDA.►Soaring food prices: Food prices are climbing amid worker shortages, supply-chain problems, extreme weather and more”Two to three years ago, who would have ever imagined we’d have things like niche shortages and processing plants closing down and shelves bare?” McFadden said. “I have very little confidence in what all might affect food prices in the future and to think about how long term it would have to be for climate change to (have) dramatic effects on what we see today.” Home insuranceThe 2021 LexisNexis Home Trends Report found that catastrophic weather events, such as wildfires, hurricanes and floods, were the largest driver of losses for the home insurance industry and caused 39% of claims in 2020 – the highest percentage in the last 6 years.This could translate to higher insurance premiums, according to experts.”The weather’s getting worse, getting more disruptive. But people are also living in these areas that are more dangerous from a climate perspective,” George Hosfield, senior director of home insurance at LexisNexis, told USA TODAY. “But the result is that those areas that do have inherently more risk (are) getting worse.” After Hurricane Sandy in 2012, the Federal Emergency Management System offered subsidized flood insurance at a rate attractive enough to drive homeowners back to the coastal regions of the country. But the agency revamped the policy to incorporate climate risk into insurance costs for the first time this month, resulting in an 18% to 20% rise in premiums, according to The Washington Post.”Some insurance companies are actively raising rates on their customers because they are more affected by these perils, and they’re trying to reduce the risk,” said Landy Liu, head of insurance products at homeownership company Better. “In the last 12 to 18 months, some of our consumers have seen that 10% to 20% insurance rate increase from their insurance premium payments, year over year.”►Home insurance policies against extreme weather: Home insurance can protect against extreme weather, but about half of Americans don’t understand itDepending on household income and home value, policy holders will see their flood insurance costs increase between $10 and $1,000 per month, the Post reported.About 3,200 property owners primarily in Florida, Texas, New Jersey and New York fall into the latter category. But homeowners who live near watersheds that tend to overflow during heavy rains will also feel the effects.”If you live in Florida for example, the market there is hemorrhaging. They are gonna need to raise rates significantly to cover the losses that they’re paying out,” Hosfield said. Hosfield added Californians will see “pretty significant premium increases over the years due to wildfires. “It’s going to become a bigger and bigger part of the cost of ownership.”Reach out to Chelsey Cox on Twitter at @therealco.


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