6 Ways Climate Change Can Impact Your Finances

One of the very hot topics in the news today is global warming. Studies are reporting new issues and damage to the planet on almost a weekly basis. There are long term implications for personal health and well-being as well as the survival of the planet itself.

But the aspect that has many consumers attention is the impact that it has on personal finances. Many consumers want to know exactly how does global warming affect the economy. Here are just six ways that you will feel a financial crunch due to global warming in the coming years.

climate change

#1 Health Care Costs on the Rise

One key expense for all consumers is the cost of healthcare. This has been a rapidly increasing cost and one that everyone must find a way to afford. The warming of the climate has an impact on good health because it affects our ability to have clean air, clean water and good food. The heat causes the wind patterns to change and that brings more ozone and smog to ground level. There are days when some cities look like there is a yellow grey shroud hanging over them, this is the polluted air that is hanging over the city. Residents in these areas are much more prone to allergy issues, asthma and cardiovascular disease due to the poor air quality. Not only does this impact quality of life but it increases the medical care needed by the residents of the affected areas. In some cases the residents can afford to pay for the needed treatment but in other cases society as a whole must pay for the services used by those who cannot afford to pay themselves.

#2 Food Prices Will Increase

Another expense that we all must work into our budget is the cost of food. Climate change is altering the crop production and livestock yields in many areas. Added heat, less rain and increased severe weather are all contributing to a drop in food production across the country. This means that with supply decreasing and demand remaining the same or even increasing due to population growth, food prices are certain to continue to increase. Even with the abundance that the United States enjoys, a 5% global increase in the price of food would result in a 1% increase in America. That doesn’t sound too bad until you realize that is just for a single year. Having food prices increase each year at that rate or greater will have a big impact on many consumers food budget.

#3 Wage Costs Will Increase the Cost of Services

Working outside has always included a few challenges due to the weather. But global warming is intensifying these issues for many workers. It makes perfect sense that as heat increases and the quality of the air decreases, workers will become less productive with each additional hours that they work. And the increased environmental stress on their bodies will also result in more illnesses and lost work time. Another reduction in work is the direct result of more severe weather. Storms and bad weather limit the time that workers can be outdoors and performing their duties. This increases the demand for workers and the price to get outside work completed such as harvesting food, maintaining landscape and exterior work on homes and buildings. Another hit to the economy comes as these workers face lower wages due to the reduction in hours worked. They have no way to recover the wages from the days lost to the increase in inclement weather.

#4 Increase in Severe Weather Damage

Severe weather can result in many additional expenses for consumers. The most obvious is the actual destruction that it can cause and the cost to rebuild and repair structures and infrastructure. In addition, there is damage to food crops that increases the prices that we are all paying at the grocery store. Power outages are another serious issue. Not only does it take time and money to repair the power grid but there is also a ripple effect of damage that a power failure can cause. Homes without power lose valuable food that needs to be kept cold. Hospitals are forced to rely on backup generators to maintain critical equipment and services and in some regions the extreme heat due to lack of air conditioning becomes life threatening for many. All of these represent costs to correct but they also represent an increase in insurance rates for the affected areas. Not only will we pay today to make repairs but we will also pay more each month to insure against other severe weather issues that might occur in the future.

#5 Energy Costs Increase

This is just simple supply and demand economics. When the temperature rises so does the demand for energy to cool our homes, schools and businesses. Even though the winters are slightly warmer, the reduction in warming costs is only a fraction of the cost to combat the higher summer temperatures with cooling. This is because heating comes from a blend of different resources such as electricity, fuel oil and gas but cooling is done completely with electricity which is the most costly energy source.

#6 Cost Associated With Transportation Will Increase

Extreme heat is hazardous for equipment as well as humans. Wear and tear on personal vehicles increases as each summer gets hotter. Costs will also increase for fuel, fuel production and the production of new cars so drivers will be seeing increases across the board. The heat also takes a toll on the infrastructure across the country. Railway steel can bend and be damaged, asphalt softens and is more prone to damage and steel in bridges and other structures expands. In addition waterways are damages by floods of water from torrential rains, flooding due to increased tidal action and debris that is washed into rivers and streams. Knowing the answer to the question of how does global warming affect the economy helps to illustrate why this is a problem that should be of concern to everyone. Without serious effort and solutions the cost of every aspect of our lives will continue to increase due to global warming.

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