Climate change is going to make everything more expensive


Agricultural yields of critical commodities (fruits, nuts, corn, sugar, vegetables, wheat) produced in those states are declining, due to the extreme heat and lack of nutrition in the soil. The supply chains through which these products normally travel are disrupted at various points due to storms that disrupt land and sea transportation. To prepare for these varying external impacts, supply-chain intermediaries and product sellers must anticipate the cost increases that will follow – and implement them as quickly as possible to cover their margins.

You may have noticed some obvious factors contributing to May’s inflation: juices and frozen drinks (19.5 percent), as well as sugar and related substitutes (6.4 percent). It’s probably not a coincidence that Florida, a significant producer of both oranges and sugar, has seen extensive damage to these exports due to extreme weather patterns caused by climate change as well as invasive crop diseases. Economists expect orange juice prices to remain high during this hot, rainy summer.

(Incidentally, climate effects may also be influencing the current trajectory and spread of bird flu in US livestock — and you already know what that means for meat and milk prices.)

However, this goes beyond groceries. It applies to every basic building block of modern life: labor, immigration, travel, and the materials, transportation, power generation, and tools needed to build homes. Climate impacts are disrupting and driving up the prices of lumber, copper, and rubber; even chocolate prices skyrocketed a while ago, thanks to the effects of climate change on African cocoa bean crops. Outdoor workers supplying such necessities are experiencing adverse health effects due to brutal weather, and the recent record-breaking influx of migrants from impoverished countries — which has been good for the US economy overall — is partly a response to climate damage in their home countries.

Climate change drives price increases in other ways, too. There’s a lot of housing in the Bay Area and the Northeast, especially along the coasts; Americans love their beaches and big homes. It turns out that liberal (Very Without (generous) monetary support from the federal government, such magnificent buildings are expensive to build and have to be rebuilt when strong and frequent storms hit – which is why private insurance companies don’t want to deal with it anymore, and the cost is passed on to taxpayers.

When all of the economic indicators that are top of mind for Americans have become so volatile because of climate change, maybe it’s time to rethink how traditional economics works and how we view their impacts. Gone are the days when extreme weather was rarer and more predictable; its power and logic are not beyond our ability to properly monitor, but they are certainly more difficult to track. You can’t use the simplest economic model to fix it. And you can’t ignore the obvious connections between our current weather hell, climate change, and our everyday stuff.

Thankfully, some actors are finally, belatedly, taking a new approach. Reinsurance company Swiss Re has admitted that its industry has failed to properly incorporate catastrophe and climate risks into its calculations, and is working to improve its equations. Advances in artificial intelligence, even if they are energy-intensive, are helping to improve extreme-weather predictions and risk forecasts. At the state level, insurers are pushing back against local policies that prevent them from pricing climate risks in their models, and Florida has new laws requiring more transparency in the housing market around regional flooding history. New York legislators are attempting to ban insurers from supporting the same fossil-fuel industry that has contributed so much to their ongoing crisis.

After all, we are no longer in a world where climate change affects the economy, or where voters are reacting to something separate from climate change by prioritizing economic or inflationary concerns – we are in a world where climate change Is economy.


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