This article is part of the series What’s Next for the Planet? Read the series introduction.
“The climate crisis is becoming a financial crisis.” — NY Times article titled “Climate Shocks Are Making Parts of America Uninsurable.”
It’s only 2023, and it’s already happening. In May, State Farm, the largest insurer of California homes, simply stopped offering new coverage — not just in wildfire zones but everywhere in the state.
Meanwhile, flooding has driven most major insurers, along with their sizable cash reserves, out of Florida; Louisiana is offering millions of dollars in subsidies to try to attract insurers to that state; and in some storm-prone parts of Kentucky, flood insurance is about to quadruple.
The huge, wealthy corporations are pulling up stakes because the frequency of major, profit-draining climate disasters has increased sharply in recent years. Their decisions are backed by data such as that produced by the nonprofit Climate Central, which determined that while on average the U.S. experienced just four billion-dollar weather events per year in the 1980s, there were 20 such events each year between 2017 and 2021. According to the National Oceanic and Atmospheric Administration, in 2022 there were 18 billion-dollar plus events, and extreme weather problems altogether cost the U.S. $165 billion.
And we ain’t seen nothin’ yet.
Just for the sake of discussion, let’s peer into the future and project that from the late 2030s to the late 2040s, a cascading series of ecological crises drains the global economy to the extent that it simply can’t continue to grow — in essence it spends all its resources mitigating disasters — and is unable to recover going forward. Looking back from, say, 2060, we might call that period the “Decade of Reckoning,” when our environmental debt, upon which our economy is now floating, came due.
What happens during the Decade of Reckoning?
Sea-level rise, wildfires and droughts push the U.S. and global economies to the breaking point, and social disintegration (mass migrations, etc.) along with the ongoing loss of ecosystem services such as the provision of fresh water, forest products and so on finish the job, causing a deep, worldwide depression. The path to such a disaster is both straightforward and, unless we change course, relentless — eco-disasters drain government coffers, and private finances will follow.
One Eric Frederiksen, commenting on the recent NY Times article “Climate Shocks Are Making Parts of America Uninsurable” pointed out that, “The estimated cost to move the first village [to higher ground on the Alaskan coast] is $180 million for around 600 people. And the US has 1,400 cities and towns threatened by sea-level rise.” Many of those communities are far larger than the first village, with far more infrastructure, and the cost of moving or trying to save them all would be astronomical.
The planet will be warmer by the late 2030s, and it’s reasonable to predict that Decade of Reckoning wildfires will make today’s fires look like controlled burns. One can envision virtually all of the Sierra-Nevada’s and Cascade’s forests engulfed in a continuous conflagration that would completely char landscapes from Los Angeles through British Columbia. What might that cost? What if that cost is multiplied by similar firestorms on every continent?
For now, the U.S. Government has the resources to move a small village, fight fires, subsidize drought-stricken farms and rebuild lost homes. But as these problems snowball exponentially, each exacerbating one another, such assistance will necessarily be scaled back, then become largely unavailable, and people will be on their own.
What will they do? Where will they go?
Editor’s Note: A version of this article appeared previously in other publications as part of an ongoing series called “Your Ecological House,” written by Philip S. Wenz, the publisher of Firebird Journal.
This article is part of the series What’s Next for the Planet? Read the series introduction.
