CBO Backs Key Committee Findings on Economic Costs, Systemic Risks of Climate Change
Washington, D.C.— Climate change is poised to increase prices for families, erode property values, and destabilize the entire economy, confirmed the nonpartisan Congressional Budget Office (CBO). In a new, wide-ranging report, published at the request of Chairman Sheldon Whitehouse (D-RI), CBO backed key findings from the Committee’s examination of the costs that climate change is imposing on consumers, the federal budget, and the economy. Climate upheaval is already raising costs for American families, and looming dangers portend the biggest systemic shock yet to the economy.
“Climate change is no longer just about polar bears and green jobs, it’s also about climate-flation: higher grocery prices, sky-high insurance premiums and growth in non-renewal rates, and instability in mortgage markets,” said Chairman Whitehouse. “CBO is now affirming that climate change is bleeding Americans’ buying power and raising the possibility of a crash in property values. We dismiss its findings—and those of many credible experts before it—at our own economic and fiscal peril.”
According to CBO, climate change poses some of the biggest risks to insurance markets and property values. In its new report, CBO stated that given the “increased risk of [flooding and wildfire] damage, insurance rates are likely to rise, and property values are likely to be lower than they would be without further climate change.” The Senate Budget Committee previously examined how climate-related extreme weather events undermine the insurance industry’s ability to price risk, which has already resulted in soaring premiums and growth in non-renewal rates. This week, the Committee published a first-of-its kind public dataset and accompanying staff report that revealed the extent to which climate change is increasing insurance non-renewals around the country, providing new evidence that a crash in property values may be looming. The mounting harms from climate change around the country increase the likelihood of an economy-wide shock. “Property owners, mortgage lenders, insurance companies, and the federal government will bear losses due to floods and wildfires. If those losses led to cascading failures of financial institutions, they would undermine the financial system,” wrote CBO.
CBO also confirmed that climate change will drive up national security costs, increase federal spending, and raise food prices. Across 20 hearings during the 118th Congress, the Senate Budget Committee heard testimony from economists, central bankers, actuaries, insurance industry analysts, scientists, health care providers, farmers, academics, state and local government leaders, national security experts, and even conservative political leaders. Their testimony was remarkably consistent: climate change poses serious risks to the economy and the financial system and is already imposing substantial costs on American families and the federal budget.
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