Climate Change Is Devastating the U.S. Economy

By: Savvy Dime Staff | Published: Jun 07, 2024

Climate change is having a huge impact across the entire USA due to extreme weather conditions.

Government funding of $6 billion on climate change is being spent on protecting lives and property. Every citizen, community and business must be supported to cope with the effects of climate change.

High Annual Costs a Major Worry for the U.S.

$150 billion is the estimated annual cost to the U.S. to repair the impacts of extreme climate events. That’s annually, that’s ongoing, and it’s not going to slow down any time soon.

Barber Shop located in Ninth Ward, New Orleans, Louisiana, damaged by Hurricane Katrina in 2005.

Source: Library of Congress/Unsplash

Damages are only accelerating as global warming inches upwards globally. A rise of 2 degrees produces alarming economic harm, simply because high temperatures and tropical cyclones routinely cause lower GDP growth.


Certain Communities Hit the Hardest

Despite producing the fewest greenhouse gas emissions, the poorest communities are often affected the most by extreme weather events.

Blue rippled sea with structures and factories on shoreline behind, against a colored sky stained by smoke plume pollution emanating from factory chimney stacks.

Source: Marek Piwnicki/Unsplash

Within the spectrum of extreme weather events, it is wildfire smoke, extreme heat, poor air quality and flooding that are making the largest impact on immigrant communities across the U.S. And the most underserved communities are the ones that recover the slowest from the frequent onslaught of climate-related events.

Prevention Is Key

With a more sustainable economy as an overall aim, efforts to reduce greenhouse gas emissions, both globally and nationally, are essential in mitigating the worst climate risks across all U.S. states.

Large mountain fire, with glowing orange-colored sky above greenery and area of water in foreground.

Source: Mike Newbry/Unsplash

The resulting personal cost of today’s human-caused climate crisis in terms of lives and livelihoods lost is indisputably the main consequence, but financial losses also substantially impact the economy.

Whatever the Weather Extreme, Climate Change Is the Culprit

Major disasters such as hurricanes and catastrophic fires can easily decimate entire towns, closely followed by extreme heat and flooding. Climate change is clearly to blame for Florida fires and California floods.

Major tornado damage in an Orlando neighborhood. Roofs torn off, trees knocked down. Branches lying on a red car on a gray road. The area shown is devastated.

Source: Mick Haupt/Unsplash

Rising temperatures are pushing weather events to greater extremes, and heat waves, fires and floods are becoming more destructive than ever before.

Climate Change Is Shaking Up the Global Insurance Industry

A consequence of climate disaster is the strain on insurance companies, a sector that reached $5 trillion in 2021. In the first six months of 2021, climate disasters accounted for losses of $42 billion covered by insurance. 

Certificate of insurance and policy with car, magnifying glass, and dollar bills on desktop.

Source: Vlad Deep/Unsplash

Hurricane Ida alone caused close to $44 billion in insured losses. The situation where insurance policies become too expensive, or insurance companies simply cannot provide adequate coverage, is approaching as more extreme disasters occur.


The Growing Impact on Economies Worldwide

Both environmental degradation and biodiversity loss pose significant risks to U.S. and world economies. Droughts and floods, deteriorating water quality, and soil erosion all combine to threaten human health and undermine food production.

White and black ships on sea under white clouds with plumes of smoke from ships filling the sky.

Source: LeBoutillier/Unsplash

Because the U.S. economy depends heavily on manufacturing, in the future it will experience supply chain disruption caused primarily by climate change-related impacts. This, in light of global economic shocks, is costing as much as $5 trillion.


Climate Change Negatively Impacts Global Business

Climate change is mostly caused by global CO2 emissions, with high levels of energy to blame. When cross-border pollution and challenges specific to certain industries are factored in, businesses worldwide may be faced with a major downturn in efficiency.

View of earth from a NASA space shuttle showing the blue surface with illuminated highlights.

Source: NASA/Unsplash

A significant drop in available food and water can be a devastating consequence of environmental changes and may lead to higher costs for commercial concerns and consumers alike.


What About the Responsibility of Corporate Players?

By combining science, savvy technology, entrepreneurial developments and innovation, the world does stand a chance to fix the current problem of our overexploited planet. All of this is based on meaningful contributions by scientists, startups and government agencies working together.

Illuminated multicolor equipment against dark background.

Source: JJ Ying/Unsplash

We must reduce greenhouse gas emissions by at least 50 percent and support effective climate regulations.


The Time to Act Is Now

Climate change is here, and here to stay, unless we act now, as this is not an issue for the distant future. Its effects are far-reaching and serious and are making a major impact on how we live.

High water level due to flooding. A multicolored road sign is visible just above the water’s surface.

Source: Kelly Sikkema/Unsplash

Climate change is both obvious and invisible. Difficult or not to deal with and overcome, it is top of the list in terms of global consciousness. Our job is to explore how to best reduce the harmful impacts of climate change.