Climate Change Will Affect Your Finances

On the heels of new reports uncovering our short time window to prevent the most extreme impacts of climate change, we at Climate Dads return to our series reviewing the basic topics of climate change. This post, republished from our friends at Crowdsourcing Sustainability, reminds us that the impacts will be real and personal.

In the next 25 years, climate change will change the world about as much as the internet has in the last 25. It will certainly affect you as a result.

Climate change does, in fact, matter to you even if you haven’t realized it up until now.

As shown in “Effects of Climate Change on Humans and Society – it’s about PEOPLE!”, climate change will drastically affect the world and society as we know it. I strongly recommend you read that post first to get an idea of what society as a whole is up against in the coming decades to understand the big picture issues that directly or indirectly affect everyone.

In response to the threat of climate change, the world will be forced to decarbonize rapidly while also developing resilience strategies. This will completely transform society as we know it. You are a part of this interconnected society and depend on countless people, companies, natural resources, and of course a safe and habitable climate in your day-to-day life. As society transitions to handle the new challenges, you and your loved ones will have to adapt to the new reality as well.

In the following series of articles, I don’t include the potential personal impacts from geopolitical tensions, conflict, or climate refugees. I don’t spell out the possibility of being directly impacted by food or water shortages – which is already affecting millions. Nor do I include the increasing chances of directly experiencing extreme climate events (extreme weather events in the US causing $1 billion or more in damage have doubled since the 90’s and quadrupled since the 80’s).

Each of these real impacts are increasingly likely as long as the Earth continues to warm. All of these potential impacts I excluded because I’ve talked about them previously. Plus, these are the issues that you wouldn’t believe could ever happen to you anyway, thanks to our hardwired optimism-biased brains.

Instead of focusing on these unbelievably disruptive impacts, I examine things that are more relatable to most people’s current life in high-income countries and explore how the trends of climate change will likely manifest themselves in various aspects of our everyday lives.

When it comes down to it we all want similar things in life. We want to be healthy, have strong, loving relationships with our family and friends, to be able to provide for the people we love, to keep them safe, to have fun, and ultimately to enjoy life. If you care about these things, it would be wise to understand how climate change will affect them – because it most certainly will if it hasn’t already.

Some of the following points are valid now and others are more future-oriented. Both are worth keeping in mind as time goes on.

How Will Climate Change Affect You?

1. Finances

We all need money to support ourselves and our loved ones. Companies and governments around the world are starting to adjust their assets, investments, and operations to deal with a world with climate change. They see the financial risks to their old way of doing things and are adjusting their behavior. Are you?

  • Home: There is a financial risk to buying property in locations that are increasingly under threat due to climate change. One example of this would be coastal areas. The ocean is rising at an accelerating rate and it’s projected to impact millions of people living on the world’s coastlines. The ocean will rise higher in some places than others – like the east coast of the US. Not only does this increase the risk of more frequent and damaging storms and flooding, but it also raises the question: how much is a home worth that is in the line of fire of these floods and storms? The same goes for any other extreme climatic event factors for that matter, such as deadly heat waves, wildfires, and droughts. At some point, the real estate market will naturally adjust values to match the new risks and reality. Insurance coverage will be exorbitant or unavailable. Choose wisely!
  • Career: In a world that needs to minimize GHG emissions ASAP, industries and companies that have business models that are antithetical to this new world are at great risk. They will become obsolete or change dramatically. On the flip side, there will be much more opportunity for businesses that help to reverse climate change and those that have sustainable operations. Companies that provide services regarding adaptation to climate change will flourish as well. There is always more job security and opportunity for advancement when you’re working in a growing industry.
  • Investments: Big money is starting to incorporate sustainability into their investment strategies. Beware of investing in companies with business models that are misaligned with decarbonizing the world or are significantly less sustainable than their industry peers. Climate change can also impact the available supply and thus the price of natural resources, as well as the climatic conditions and stability of where products travel in the supply chain. These are inherent risk factors for many businesses and should be considered.

You’ll be paying more:

  • Taxes: Extreme weather events are becoming more and more costly. In 2017, the US set a record with over $300 billion in damages. More and more of your taxpayer dollars are going to relief efforts.
  • Food: All these droughts, floods, wildfires, storms, and heatwaves are reducing crop yields, water availability, and even the nutrition of our food. Food shortages are expected to increase in the future, meaning prices go up for everybody.
  • Price on carbon: This market-based solution is practically inevitable if we are to quickly reverse global warming. There are different ways it could be done. The fact remains though, the more GHG emissions you are responsible for, the more money will come out of your pocket. Get ahead of the game and go green!

Stay tuned for Part 2: Climate Change Will Affect Your Fun Stuff

Crowdsourcing Sustainability, founded by Ryan Hagen, is a community of people from around the world united by the need for climate action. Whether you want to learn about climate change and sustainability, share your knowledge and stories with others, get inspired, or connect with people who share your vision of a better world, get started by connecting with Crowdsourcing Sustainability.

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