Analysis identifies historic and future trends by disaster type and region, down to the state, county, and congressional district
Economic costs of climate change are growing alongside economic opportunities for action
WASHINGTON, DC – As Florida rebuilds from Hurricane Ian and the Midwest and Southeast recover from this summer’s flooding, a new report by PSE Healthy Energy for the national, nonpartisan business group E2 (Environmental Entrepreneurs) breaks down the economic impact of extreme weather and climate-driven threats to states across the United States.
Billion Dollar Losses, Trillion Dollar Threats: The Cost of Climate Change analyzes the escalating toll of billion-dollar disasters over the last 40 years and provides insight into how these disasters—from hurricanes and flooding to wildfires—are compounded by other extreme weather events, such as record-breaking drought, heat waves, and rainfall.
The trends identified in the report are concerning for America’s economy. Every state in the country – regardless of politics or partisanship – has been impacted and faces risks from rapidly escalating weather and climate disaster damages, according to the analysis, with a third of all losses since 1980 occurring in the last five years.
From 2017-2021, America experienced its four most expensive wildfires, two of most expensive hurricanes, and its most expensive winter storm, with economic losses from all disasters totaling $765 billion, according to data from the National Oceanic and Atmospheric Administration (NOAA).
“Disaster risks are growing across the country and the escalating damage often falls hardest on low-income communities, communities of color, and regions that have faced historic underinvestment,” said author Elena Krieger, the Director of Research at PSE Healthy Energy. “Invest in climate mitigation and resilience provide an opportunity to address historic inequities and protect our most vulnerable populations.”
Investments to decarbonize the United States economy could help reduce the growing economic costs of climate change while simultaneously generating trillions of dollars in GDP growth over next 20 years, according to the report. Low-income communities, communities of color and other historically underserved and overburdened communities could benefit the most from such investments. Additionally, the escalating economic toll of climate-driven extreme weather events poses an outsized threat to certain sectors, particularly agriculture, as well as certain populations such as outdoor workers.
“Climate change is no longer just an environmental issue or health issue or social justice issue,” said Bob Keefe, executive director of E2. “It’s all those things. But it’s also now a daunting economic issue, and it’s hitting every American in the pocketbook, no matter where they live, what they do or how they vote.”
According to the analysis’ breakdown of historic billion-dollar disaster data from NOAA:
- Texas and Puerto Rico have seen the greatest total losses in the last five years, with damages reaching $202 billion and $106 billion, respectively.
- Ten other states and territories have seen five-year disaster losses top $10 billion, including Louisiana ($87 billion), California ($73 billion), Florida ($71 billion), North Carolina ($31 billion), Colorado ($16 billion), Iowa ($16 billion), the Virgin Islands ($13 billion), New York ($13 billion), Georgia ($13 billion), and New Jersey ($12 billion).
- In Texas, California, and the U.S. Virgin Islands, more than 50 percent of the total losses from climate-driven disasters since 1980 occurred in the last 5 years. In Puerto Rico that number rises to over 90 percent.
- At least one congressional district in more than 20 states – including Alabama, Arizona, Arkansas, California, Colorado, Florida, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee and Texas – face annual expected losses to buildings, agriculture, and human life of more than $100 million a year.
- Based on historic climate and weather impacts, expected annual losses to agriculture, buildings, and human life top more than $100 million in 25 counties and 60 congressional districts, according to the analysis.
Amid the alarming increase in costs, the report concludes that economic opportunities associated with climate action are also escalating rapidly.
The historic federal climate investments from the recently passed Inflation Reduction Act, Infrastructure Investment and Jobs Act, and CHIPS and Science bill are expected to help reduce greenhouse gas emissions by 40 percent by 2030 and to create jobs, enhance manufacturing and spur private investment in the clean energy economy.
Reaction from business leaders in various states:
Ajulo Othow – founder and CEO, EnerWealth Solutions in North Carolina
“The costs from climate and weather disasters are increasing, and the financial burden does not fall on all Americans equally. The economic hardship caused by disasters disproportionately impacts those who have historically been left behind by America’s success. At EnerWealth, we are trying to ensure that climate change does not continue deepening inequality and that solutions lift up all communities.”
Michael Rucker – founder and CEO, Scout Clean Energy in Colorado (operates in 13 other states)
“There’s no doubt that climate solutions and the transition to clean energy are good for the economy, but as the costs from weather and climate disasters ramp up, the economy is taking a hit. A rapid switch to renewables is the only way to slow down the costs of climate while injecting the economy with new life. We can either continue to watch the costs of climate skyrocket or build on federal investments and create a clean energy economy that is ripe with opportunity.”
Dave Belote – USAF (Ret.) and CEO, DARE Strategies LLC (Virginia, Pennsylvania and South Carolina)
“The costs of weather disasters are an enormous burden to America’s economy and safety, and we’re all paying the price. These disasters hit the economy from all angles–destroying agriculture, halting work, and uprooting communities. As a veteran I can attest that the military is not immune and faces a rising toll on troops and bases from flooding, wildfires and more. With historic federal investments in the transition to clean energy, we’re hoping we can continue to right the ship and that as we work to mitigate the impacts of climate change, we’re capitalizing on the economic opportunities that the clean energy transition presents.”
Other data reviewed in the report include the counties most at risk to extreme heat and wildfires, projected risks to outdoor workers, estimated increase in flood losses, and rising threats to agriculture.
About the Report
Billion Dollar Losses, Trillion Dollar Threats: The Cost of Climate Change reviews the historic and projected economic toll of weather and climate disasters across the United States since 1980. It assess trends related to specific types of disasters—such as wildfires or hurricanes—as well as across regions, sectors, and over the course of decades. This analysis largely focuses on total economic impacts of these disasters, but this metric is somewhat limited as well: it may be much harder for a low-income household to recover from the flooding of a less expensive house than for a wealthier household to recover from damage to a more expensive house, even if the total monetary damage of the latter is larger. Given these limitations, the report still aims to summarize the scale of weather and climate damage across the United States, the risk of escalating costs in a warming climate, and the need to rapidly invest in both climate mitigation and adaptation.
Environmental Entrepreneurs (E2) is a national, nonpartisan group of business leaders, investors, and professionals from every sector of the economy who advocate for smart policies that are good for the economy and good for the environment. Our members have founded or funded more than 2,500 companies, created more than 600,000 jobs, and manage more than $100 billion in venture and private equity capital. For more information, see www.e2.org or follow us on Twitter at @e2org.
PSE Healthy Energy is an independent energy science and policy nonprofit research institute. Founded in 2010, our mission is to generate science-based energy and climate solutions that protect public health and the environment. PSE has a unique commitment to making science understandable and actionable. Our scientists work with policymakers, community-based organizations, government, and other stakeholders to advance a healthy, resilient, and equitable energy future. For more information, see www.psehealthyenergy.org or follow on Twitter at @PhySciEng.