That is because climate change is not a local problem that hits one place at a time. It is increasingly a widespread financial risk, pushing on several parts of household finances at once. When risks become systemic, people cannot simply “insure it away” or plan around it.
When Trump announced he was revoking the US’s 2009 “endangerment finding”, which set out how greenhouse gas buildup harms human health and wellbeing, he said the move would save Americans “trillions of dollars”.
But climate change shows up directly in household budgets as pressures converge. These pressures could include insurance becoming unaffordable or even unavailable, which can then have knock-on effects on property values. On top of that, utility costs can creep up, wages may become less reliable, and retirement savings are exposed to climate-driven shocks.
For many families, their home is their largest financial asset. But climate risk is increasingly being priced into property markets. Research suggests that in the United States, homes exposed to flood risk may be overvalued by between US$121 billion and US$237 billion (£89 billion and £174 billion). The First Street Foundation, an independent climate risk research organisation, estimates that climate risk could wipe out as much as US$1.47 trillion in US home values by 2055.
In the UK, evidence shows that house prices in English postcodes affected by inland flooding fell by an average of 25% compared with similar non-flooded areas. Coastal flooding in England has been associated with price reductions of roughly 21%. The Environment Agency estimates that one in four homes in England could be at risk of flooding by the middle of the century.
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For the full article co-written by Dr Meilan Yan visit the Conversation.
ENDS