The climate emergency is significantly increasing costs for California households in the form of rising utility bills, lost wages and growing healthcare expenses, worsening the state’s affordability crisis, according to a sweeping new report.
The average American born in 2024 will likely face up to $500,000 in additional lifetime costs from climate crisis, and those who experience more severe effects will see up to $1m in costs, the Costs of Climate Change: Financial and Economic Impacts on California report states.
The analysis from the Center for Law, Energy & Environment at the University of California, Berkeley, commissioned by the environment and economy non-profit Next 10, examines more than 100 primary sources together for the first time to provide a deeper look at what researchers describe as the “hidden costs” of the climate crisis in California.
“Climate change is raising the cost of living in ways that we may not know,” said F Noel Perry, the Next 10 founder. “From agricultural workers in the Central valley losing work because of drought or heat [to] patients not getting medical care because of extreme weather, to increases in home insurance.”
California has long been one of the most expensive states in the nation with its high cost of living and expensive housing. Meanwhile, a recent report revealed that since the rollback of pandemic era policies, California has developed the highest poverty rate in the US, alongside Louisiana.
The state has also had to grapple with increasingly extreme weather fueled by climate change from devastating and deadly wildfires, year after year, that displace entire communities and spread smoke across the region to grueling heatwaves and intense winter storms. In January, wildfires tore through the LA communities of Altadena and the Pacific Palisades, killing 31 people and destroying more than 18,000 structures.
People often perceive climate change as a set of future costs, but the consequences are already impacting people in unexpected ways, including inflation, food prices and availability, and insurance, said Ken Alex, with UC Berkeley’s Center for Law, Energy and Environment.
“We really wanted to take a deeper look at the costs to individuals [and] to businesses,” Alex said. “These are immediate costs that are affecting people in their current lives.”
“It’s not a future set of abstract numbers. It’s real and it’s immediate,” he added.
The report highlights the far-reaching impacts of the January wildfires, among others, which resulted in $4.6bn in GDP losses and nearly $300m in lost wages for workers and businesses, eliminating generations of family wealth. Between 2017 and 2021, there were about $60bn in income losses across the state due to wildfires, according to a Moore Foundation report cited in the analysis.
Californians are facing skyrocketing power bills at the same time, and wildfire-related costs account for up to 13% of recent increases, the report states. Extreme heat further increases electricity costs each day, as when temperatures reach 95F, electricity costs rise by 1.6%.
Smoke exposure associated with wildfires in southern California costs an estimated $84.42 a person per day, according to a 2012 study cited in the report. The unhealthy air caused by fires is already affecting outdoor workers and by 2050 they are are expected to see future earnings losses of up to $55.4bn because of the climate. In 2018, wildfire smoke led to an estimated $7.8bn in health costs in the San Francisco Bay Area.
Addressing the climate crisis costs money, Alex said, but there are massive costs for failing to take action.
“Taking action on things like climate change through technology reduces costs rather than increases it, and if we continue to fail to take action, that’s actually more impactful from a cost perspective.”
The report authors hope to conduct further research to uncover additional costs, Alex said, and would like to see the issue become a point of discussion in the next governor’s race and beyond.
“We cannot solve the affordability crisis in California without also solving the climate crisis,” Perry said.
