The Hidden Inflation of Climate Change

The impacts of climate change are driving up costs for consumers.

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Every Monday, in Climate on the Ballot, we pass along a topic to help you integrate climate into your newsroom’s campaign reporting. Consider sharing this newsletter with your colleagues on the politics beat. Vea la versión en español de “El clima en la boleta.”

This Week: Climate Inflation

American voters are worried about inflation. Thirty percent say it’s their top priority, according to a new PBS/Marist poll out June 18. Though inflation has been going down, pollsters say voters are still feeling the impact of record levels in 2023 and 2022. 

For most consumers, inflation means adjusting household finances and higher bills — for groceries and utilities, gas, rent, mortgage rates, and insurance. And for many of these items, climate change is a hidden contributing factor. Despite its name, the Inflation Reduction Act didn’t do much to lower inflation in the short-term, but its long-term effect on curbing prices could be substantial, and that’s meaningful for voters to consider in thinking about the direction the country takes in the next four years. 

Reporting Ideas

  • Food. A new study linking climate to higher food prices finds “climate shocks” will “cause the cost of food to rise 1.5 to 1.8 percentage points annually within a decade or so.” So-called “heatflation” has caused the cost of some items — such as olive oil, chocolate, and coffeeto rise because of extreme heat. Food prices vary and some communities are seeing costs rise more than others. Dig into prices in your state compared to other regions. 
  • Electricity. NBC News reports that “the average cost of keeping an American home cool from June to September is set to hit $719, nearly 8% higher than last year, according to new projections from advocates for low-income households,” the highest in a decade. As heat waves are becoming stronger, more frequent and longer lasting, due to climate change, the cost of air conditioning could become too expensive for many people.
  • Home and Auto Insurance. There have already been 11 billion-dollar disasters in the US in 2024, and numerous other notable climate events, including one storm in Texas that featured DVD-sized hail (marking the first warning of that size from the National Weather Service). Extreme weather events are making it harder to “insure homes in many parts of the US,” reports the BBC, and “car insurance rates just had their biggest annual jump in 47 years,” reports CNN.
  • Health Insurance. The Wall Street Journal reports that health “insurers are adjusting to assessing climate risk as extreme heat and air pollution have been linked to a rise in hospitalizations.” A report from the Boston Consulting Group notes that “water and food insecurity, natural disasters, and shifting disease vectors present additional dangers.” What are health professionals in your region seeing in their waiting rooms? 

Take Inspiration

  • In this explainer, The Washington Post reports on how “climate change is already making your bills more expensive,” and why it will only get worse. 
  • Grist breaks down how “isolated climate shocks and supply chain disruptions lead to higher food costs.” This is a different phenomenon from heatflation, which is when farmers have a bad season due to heat and the price of one crop goes up. In these scenarios, droughts in the supply chain cause disruptions, such as low water in shipping channels or less pasture land for livestock, and drive up prices.
  • USA Today reports that in 2019, only 5% of US homeowners didn’t have home insurance. Today the number has grown to 12%, the highest ever recorded by the Insurance Information Institute, which tracks the industry. “The Consumer Federation of America found homeowners who make less than $50,000 a year are twice as likely as the general population” to forgo insurance due to rising costs.
  • The Wall Street Journal highlights climate shocks that are meaningful to its readers with this compelling headline and information-rich story: “Climate Change Is Coming for the Finer Things in Life.”
  • The IRA includes $720 million in funding opportunities for Tribal nations. Marketplace Host Kai Ryssdal travels to Red Lake Indian Reservation in northern Minnesota where they are planning to “build utility-scale solar that could power the entire reservation.”   

Spotlight Piece

The Atlantic’s George Packer writes about what he calls the “most American city” in this longform piece spotlighting Phoenix, Ariz., as a microcosm of what’s happening politically, environmentally, and socially in the US. Climate is a recurring motif. Packer spent nearly a year in Phoenix and offers plentiful observations and story ideas for any political reporter in any town to consider in their reporting. 

Announcing Locally Sourced!

We’re excited to announce the launch of Locally Sourced, a new biweekly newsletter to help journalists make the global issue of climate change resonate with local audiences. The first issue focuses on extreme heat. Sign up. 

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