By Alliance President Terry Gips and Alliance Communications Coordinator Amy Durr
It’s Earth Month and amidst all of the positive Earth Day activities and talk about Trump’s tariffs, there’s a massive elephant in the room that’s an inconvenient truth most media isn’t covering and the public is not discussing: the extraordinary costs of climate-related disasters and how they’re making our homes, businesses and our entire built environment uninsurable. The bottom line? Our economy will cease to exist as we know it.
This isn’t the hopeful Earth Day message we’d like to deliver, but it’s tough love and the wake up call we need to avert financial collapse and a disaster for the most vulnerable and poorest people in the US and around the world.
There are clear solutions that we’ve been working on and successfully implementing – from a financed global climate agreement and the Inflation Reduction Act to electric vehicles, home electrification and renewable energy – all of which are being dismantled by the Trump Administration. We can and must build bipartisan support to keep these policies in place.
Show Me the Money – Here are the Real Climate Costs
“By 2049, costs from the effects of climate change could total more than $38 trillion annually, according to a paper by scholars at the Potsdam Institute for Climate Impact Research,” shares the New York Times.
In the US alone, climate will wipe away $1.47 trillion in value from real estate by 2055, according to a February report from First Street, which models climate risk.
The Times also reports more than 80,000 homes in New York City alone could be lost to floods in the next 15 years.
Climate will also contribute to a decline in crop output and strained supply chains due to both extreme heat and flooding.
A world that has warmed 3ºC will result in an average 10% decrease in global gross domestic product, according to researchers at ETH Zurich. Sadly, poorer countries will be hardest hit.
The Unheeded Climate Warnings from the World’s Largest Insurers
The world’s largest re-insurers – the mega corporations like SwissRe that provide the insurance coverage for our property insurers like State Farm and Allstate – have been warning us about this for three decades or more.
They were the first corporations to sound the alarm about climate and gave accurate predictions about the projected costs of climate disasters, in part because they’re the ones that had to pay for them.
They warned our federal, state and local governments that immediate action was needed to take place to address the climate crisis or they would begin to stop providing property insurance coverage.
Guess what? We didn’t heed their warnings and they have been steadily pulling their coverage from states like Florida and California.
Beyond Dire – From Being Uninsurable to the Fall of Capitalism
The New York Times shares the profound and deeply disturbing LinkedIn post by Günther Thallinger, a member of the supervisory board of Allianz SE, the Swiss insurer. He offered a stark warning about the impacts of these costs for the financial system:
“The math breaks down: the premiums required exceed what people or companies can pay,” he said. “This is already happening. Entire regions are becoming uninsurable.”
But the risks extend well beyond the insurance business, Thallinger said.
“This is not a one-off market adjustment,” he wrote in his post. “This is a systemic risk that threatens the very foundation of the financial sector. If insurance is no longer available, other financial services become unavailable, too.
“A house that cannot be insured cannot be mortgaged. No bank will issue loans for uninsurable property. Credit markets freeze. This is a climate-induced credit crunch.”
At that point, Thallinger wrote, “The financial sector as we know it ceases to function.”
“And with it,” he added, “capitalism as we know it ceases to be viable.”
This Earth Day you can do something good for the planet. Let’s pick up some trash. Join us for a rally at the MN State Capitol at 1:00 pm to awaken the public.
You can also speak out to our elected officials in both parties, along with business leaders, and call on them to stop this madness.
Help make the Earth happy.