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Changing Climate Changing Homes: Equipping Ourselves for a New Tomorrow


Larissa Gosslau

There are many ways to distinguish regions of the United States- way of life, accent, music taste, and weather. Or at least that is how it used to be. As we progress into the 21st century, climates slowly blend in different parts of the country. In the first days of 2023, Southern California reached temperatures in the high 30s, while only a week later, Central Massachusetts reached temperatures in the high 50s. At the same time, the Midwest was recovering from a massive winter storm reaching temperatures of below 0, before the temperature quickly shot back up to the upper 40s a few days later. Not to mention, Category 4 and 5 hurricanes hit regions at deadly wind speeds seemingly like never before. While in the moment, weather like this can be attributed to bad luck or being a “freak of nature,” observations made day-to-day make up pieces of a larger story, climate change. And this larger story isn’t only changing lifestyles but slowly evolving how households spend their money. In Northern California and the Pacific Northwest, residents can no longer rely on utilities for rainy winters and low-humidity summers; they need to be prepared for harsher winters and long, hot summers. Southerners can no longer rely on relatively mild, stable winters; they need to prepare pipes and other infrastructure for the snowstorms that Midwesterners now see as early as October into May. This begs the larger question: How does a changing climate influence peoples’ decision to invest differently in their households?  

Of course, it’s essential, to begin with, the fact that simple, scattered observations aren’t enough to attribute changing weather to a changing climate. For this, we turn to data and research being corroborated by experts and companies worldwide. The Intergovernmental Panel on Climate Change (IPCC) released a report concluding that “[a] changing climate leads to changes in the frequency, intensity, spatial extent, duration, and timing of extreme weather and climate events, and can result in unprecedented extreme weather and climate events.” If effects of climate change are graphed, we see a shifted average towards warmer temperature, increased variability accounting for more extremes on both the “hot” and “cold” side. Other than these facts, what exactly does this mean?  

According to the US Geographical Survey and National Oceanic and Atmospheric Administration, increasing global temperatures increase the risk of several high-intensity storms. From a purely mathematical point of view, category 4 and 5 hurricanes are expected to increase by 10%, and a 3% increase in wind speed correlates to a 10% increase in wind damage, which is, after all, what needs to be paid for. In addition to storms, flood risk needs to be considered. Less snowpack and faster ice melting due to increased temperatures and increased rainfall contribute to rising sea levels and expose areas not previously at risk or structurally prepared for flooding. Overall, data from the World Meteorological Organization shows a five-fold increase in 50 years in climate-driven disasters. From 2015 to 2017, studies show that 62 of 77 events were from human-driven causes.

Now, it’s essential to consider that we have better reporting techniques. The 1970s marked a significant rise in media prevalence, so could this possibly explain the increases in climate-related disasters undoubtedly seen? It turns out it can’t. We can compare these findings to earthquakes, which are generally not considered climate events. Coinciding with the rise of media, there was a sharp rise in earthquake reports, but this number has remained statistically steady since, whereas climate-related events have just been rising. This fact provides tangible evidence that the increase in climate events cannot be merely attributed to a rise in media prevalence. Instead, evidence points us to the fact that these events are linked to human activity.  

How does this all connect back to managing finances? For starters, more disasters equal more damage which all amounts to economic losses. While it’s true that damage control costs a lot of money, this may be more linked back to things like population and wealth increases in a general sense. It comes as no surprise that the population is dramatically increasing. We just hit a whopping 8 billion people on Earth just this past November, which can be compared to 2.5 billion in 1950. 

Additionally, per capita wealth is also increasing, specifically along the coast. All this amounts to the fact that simple population and infrastructure increases account for increasing economic damage. But what about on a smaller, seemingly less obvious scale?  

According to the Pew Research Center, on a household level, we can measure preparedness for climate change with four factors: flood insurance, air conditioning, generators, and insulation. The overarching theme is those areas that once lived relatively carefree about certain climate disasters no longer can and must take measures to reflect a changing climate. Examples of this are:

  • Increasingly brutal winters down South.
  • Drier summers on the West coast.
  • Nationwide electric grid failure.  

In 2018, 13% of US homeowners surveyed had flood insurance; by 2020, this number had gone up to 27%, showing a two-fold increase in necessity. The Insurance Institute of Information reported that many people need help understanding flood insurance, what it covers, or even if they have it. It may be up to financial institutions to put flood damage coverage in laypeople’s terms to alleviate this sort of confusion about what situations do and don’t qualify for coverage and the best courses of action for a particular area with these changing risks. Homeowners' insurance often does not cover flood damage and is not federally required unless a house is within a risk zone. On this note, the National Flood Insurance Plan is attempting to rebuild its risk-zone mapping to be more accurate, and with a changing climate, there is an increasing urgency.  

8.8% of the United States needs air conditioning. This number only increases in Northern California and the Pacific Northwest due to the “normal” climate conditions, where 55.7% of housing units in Seattle, 52.7% in San Francisco, and 21.4% in Portland do not have AC. But the long, hot summers growing increasingly prevalent have caused an urgent need for air conditioning. Statistically, households bringing in a higher income are moderately likelier to have access to AC, and the actual type of AC acquired is more directly correlated to income. But should this be the case? We see the same sort of pattern with insulation, where climate change leads to more extreme winters. A particular point of this occurred in Texas, where unpreparedness for unprecedented weather conditions left millions without heat for days. Inadequate or even nonexistent insulation left pipes cracked and needing total repair. Now more than ever, insulation is a need for homes, and even more so than AC, it directly correlates to household income.  

So how can this issue, a disproportionate effect by socioeconomic class, be alleviated? For starters, financial institutions can support families in need through energy-efficient-specific loans. Further, households should be encouraged to look at the cost over time rather than the cost upfront. Insulation and AC can save money, but the initial cost is a deterrent. When eventual, increasingly common repairs and a changing climate are factored in, as well as tax credits given for energy-efficient home improvements, equipping a home with these necessities right away is the way to go.  

Finally, we look at generators needed for almost every household appliance. According to many accredited sources, electric grid failures and neighborhood “blackouts” are becoming increasingly more common, particularly in the United States, due to extreme weather and, by extension, climate change. This issue affects the US more than other nations, mainly dealing with jurisdiction on electricity systems, but in any case, they raise extreme environmental concerns. To combat this, clean energy groups look at coupling storage batteries with solar panels that can be mounted on virtually any structure. From a state-wide standpoint, investing in these could have long-term financial and environmental benefits. Additionally, areas may consider installing microgrids on a neighborhood-neighborhood basis. These microgrids would be able to operate on their own should the more significant transmission fail, which would protect electricity in the face of a changing climate.  

There is no doubt that the climate is changing, and with it comes to a plethora of new challenges, we must face on a personal and global level. Households that once rarely saw snow now must think about freezing pipes and a heating shortage. Natural disasters, such as floods and tropical storms, are only becoming more disastrous, with an economic fallout to match.  

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