THE SENATE BUDGET COMMITTEE
Budget Committee Releases Sweeping New Report Highlighting Economic, Budgetary Costs of Climate Change
Climate upheaval is already raising costs for American families, and looming dangers portend the biggest systemic shock yet to the economy
Washington, D.C.—The Senate Budget Committee released a new report examining the economic dangers and budgetary costs of climate change.
Across 19 hearings during the 118th Congress, the Budget Committee heard testimony from economists, central bankers, actuaries, insurance industry analysts, scientists, health care providers, farmers, academics, state and local government leaders, national security experts, and even conservative political leaders that remained consistent: climate change poses serious risks to the economy and the financial system and is already imposing substantial costs on American families and the federal budget.
Nationwide, consumers and governments are already seeing higher costs from climate change, and as long as the fossil fuel industry continues benefitting from more than $700 billion a year in subsidies in the U.S. alone, it is only going to get worse. Since the Committee’s hearing on climate change-related risks to the agriculture sector, climate-related severe weather phenomena have driven up prices for olive oil, rice, orange juice, sugar, and chocolate.
As droughts and other extreme weather further decrease crop yields and disrupt supply chains, grocery price spikes will become even more likely. Health care and infrastructure costs are increasing because of climate upheaval, which is also upending ocean-based industries and those dependent on outdoor recreation. Local investment, national security, and American competitiveness in automobile manufacturing are in jeopardy, and nearly $400 billion—and counting—in U.S. fossil fuel assets could become stranded when the carbon bubble eventually bursts.
Climate change also threatens to trigger cascading economy-wide failures. As experts warned the Committee, sea level rise and more intense storms could make more than $1 trillion in coastal real estate uninsurable, and therefore unmortgageable, just as more frequent and intense wildfires could result in a similar death spiral for Western property values. Furthermore, climate-related losses make it harder for the insurance industry to price risk, which has already resulted in skyrocketing premiums and growth in non-renewals. As upheaval in insurance markets bleeds into upheaval in mortgage markets and then in property values, it would undermine household economic security and threaten overall financial stability.
“Climate change does not discriminate by political party, and as this report makes clear, we dismiss the alarms flashing red at our economic and fiscal peril,” said Budget Chairman Sheldon Whitehouse (D-RI). “Republicans ignoring climate change does not stop climate change, but their fealty to Big Oil does bleed Americans’ buying power and put our entire economy on a path to a catastrophe that could dwarf the Great Recession. I urge them to put America first and change course to protect our economy, our future, and our planet.”
SHELDON WHITEHOUSE
Tomorrow, December 18, 2024, the Budget Committee will hold its final hearing of the Congress, titled “Next to Fall: The Climate-Driven Insurance Crisis is Here—And Getting Worse.” Recent data has shed light on where premiums have gone up the most, and this hearing will examine which markets may be the next to fall.