Climate Change Impacts Everyone
To varying degrees, we are all impacted by climate change.
At this point, climate change is irrefutable. 2024 will likely go down as the hottest year on record globally. NASA confirmed that the summer of 2024 was the hottest since records began in 1880, with June, July, and August being 0.2 degrees Fahrenheit warmer than any previous summer.
As we all know by now, climate change comes with greater volatility of extreme weather, such as hurricanes, wildfires, floods, heatwaves and droughts. The media in the U.S. tends to focus on Florida for hurricane risk and California for wildfire risk, but, as Hurricane Helene showed, many states are at risk. In the case of Helene, the IRS has provided disaster tax relief to seven states: Alabama, Georgia, North Carolina, South Carolina, Florida, Tennessee and Virginia.
One of Helene's tragic lessons was the lack of preparedness and insufficient response in places like Asheville, North Carolina. The severity of the storm (10 to 29 inches of rainfall) exceeded expectations, and the city’s infrastructure struggled to cope with the damage. At the same time, the level of destruction overwhelmed available resources and response capabilities. Sadly, many people were on their own.
Are You Aware of the Risks Where You Live?
One of the first steps is to preliminarily assess the risks of where you live. First, it is important to identify local climate hazards, such as rising temperatures, changing precipitation patterns, and frequency of extreme weather events. The National Climate Assessment provides an interactive map where you can see historical changes by county along many important measures and The Climate Explorer (by NOAA in the U.S.) provides projections of possible changes. Second, understand the specific exposure of where you live. Do you live in an area of greater risk, such as near the coast, on a hillside or a dense urban environment? Third, get a handle on the quality of your local infrastructure to support you in light of an extreme situation.
Don’t overlook the cost of homeowners insurance. According to a recent Bipartisan Policy Center Report, from 2017 to 2022, homeowners insurance premiums rose 40% faster than inflation. Further, some places, such as California's high-risk wildfire zones, are essentially uninsurable. Remember that these costs are not just borne by homeowners; landlords pass on these costs to renters, too.
Have You Thought Through 2nd Order Effects, Like Demographic Shifts?
For decades, there has been a migration away from the Rust Belt, which includes states like Ohio, Michigan, Pennsylvania and parts of the Midwest and Northeast, to the Sun Belt, which includes the southern and southwestern states like Texas, Florida, Arizona, Georgia and South Carolina. Lower cost of living, warmer climates and job growth have been key drivers.
However, in light of climate change risk, there could be a reverse migration. We may find that people—most likely young and mobile professionals and their families—move north to places less at risk for severe weather.
If this reverse migration were to occur meaningfully, life would likely be more challenging for those who remain. There would be a lower tax base to fund infrastructure and services, including those related to combat and respond to extreme weather events, just at a time when the risk of such events is rising. The risk of this reverse migration could be particularly acute for older adults who rely more on their community and government during times of crisis.
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Are You Comfortable with the Risks? What’s Your Plan B?
As you sort through the first and second-order effects of climate change risks where you live, it is important to gauge your comfort (or discomfort) with these risks today and in the future. You may find that you are comfortable with the risks today but, if trends continue, you will be considerably less so in five years’ time. For some people, anxiety from what could happen is reason enough to consider a new place.
Look at ways to de-risk your situation. One approach is to shift from an owner to a renter. In this scenario, significant downside risk is borne not by you but by the owner. Another approach is to identify alternative housing in your area that is either in a safer location or designed to better withstand inclement conditions. For example, Pearl Homes has developed the Hunters Point development in Cortez, Florida, to withstand a Category 5 hurricane.
To help relieve anxieties, now may be a good time to plan. Outline the risks you see and what you can do today to mitigate those risks. At the same time, particularly in areas of moderate or significant risk, create a Plan B that would involve relocating to a new place, potentially in a different region.