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In Dollars: What Climate Change May Cost Future Generations

In Dollars: What Climate Change May Cost Future Generations

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Climate change and extreme weather events are affecting the economy every year, weighing on agricultural output, causing millions in damage and insurance claims, and triggering power outages on overstretched grids along the way. The phrase future generations will have to pay the price of slow action on pro-climate policies is often uttered. But can we put a number on it?

According to a recent study by Consumer Reports and consulting firm ICF Incorporated, climate change will cost a child born in 2024 between $500,000 and $1,000,000 in their life. This estimate includes a combination of higher costs, potentially lost wages, and lower investment returns, assuming an unchanged climate policy trajectory.

Costs of Climate Change

Here’s how climate change could impact the personal finances of future generations.

For one, more extreme temperature swings are already leading to rising energy costs, as more people rely on A/C to stay cool, driving up electricity bills. Additionally, droughts and floods are jeopardizing the steady supply of food crops, as well as fruit and vegetables, which, in turn, leads to higher food inflation.

Extreme weather events could also affect corporate America, per the report, potentially leading to lower profits and reduced stock market growth, which would be bad news for investment portfolios and retirement savings. Workers in affected industries could also experience more job insecurity.

Rising Temperatures, Rising Costs

CO2 emissions will cost the global economy as much as $38 trillion in economic damage by 2050, according to one Nature study. A separate study from researchers at Stanford University found it would cost a fraction of that ($6 trillion) to comply with the Paris Climate Agreement.

Of course, it is tremendously difficult to forecast the exact cost future generations may face. There are many unknowns, including how the private sector may respond where public policy is missing, or future global agreements and their impact. What we do know with some certainty is that extreme weather comes with a price tag.

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