How Extreme Weather Is Making Everything More Expensive

Weather Forecast

Extreme weather events are putting financial pressure on some U.S. cities and its residents.

The economic cost of weather phenomena across the globe is well-documented. El Niño-related droughts in West Africa led to soaring cocoa prices, for example. But these events are dealing damage stateside, too. Intense storms,  forest fires, or floods can impair critical infrastructure like roads, bridges, or power grids, or damage private homes, which then must either be repaired or rebuilt entirely. 

Rising Costs

When private citizens incur weather damage, insurance payouts (depending on the damage), savings, or  loans may be used to pay for the repairs that are needed.

But cities or municipalities often issue bonds or raise fees to pay for costs, per a Wall Street Journal report.

For example, Naples, Florida raised the price of parking to repay bonds that helped rebuild a pier damaged by Hurricane Ian in 2022. Meanwhile, residents in cities across Texas, Louisiana, and Oklahoma are facing higher gas and electricity bills to help offset $10 billion in debt issued in recent years to finance storm-related energy costs. Cities that are at high risk of extreme weather already have nearly $600 billion in outstanding debt, per data from ICE Data Services cited by the WSJ. And their citizens are feeling it with costs creeping higher.

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