Mr. President, 6 years ago, I sent all of my colleagues in the Senate this binder of economic warnings about climate change. Here it is. The warning signs were flashing, so I shared all of those different reports. When I assumed the role of Senate Budget Committee chair, I provided an updated version of that binder to my committee members. As you can see, it had gotten a lot thicker. The warning signs had kept piling up, imploring us to act now before it is too late.
And what is happening now? The events warned of are coming to pass. Over 19 Budget Committee hearings, we heard from serious experts about the looming economic, financial, and fiscal risks of climate change. We had economists, actuaries, industry analysts, scientists, healthcare providers, farmers, academics, national security leaders; even some conservative political leaders shared the warnings.
The witnesses and the topics differed, but the message was the same: Look out. Climate change presents an economic threat, and ignoring it poses severe, even systemic economic risks. We ignore it at our economic and fiscal peril. Ignoring it is, unfortunately, the path my Republican colleagues have chosen to follow, but ignoring climate change does not stop climate change from hitting our economies even in red and purple States. The changes are happening in every corner of the country; and day after day, news reports only confirm the warnings.
We held hearings on communities facing coastal flooding risk and wildfire risk and how those risks affect insurance and mortgage markets and, ultimately, property values. A mortgage issuer looks forward 30 years—the term of the mortgage—and climate-driven sea level rise, extreme precipitation, hurricane damage, and river flooding will add big risks to residential properties over the next 30 years.
I am a Rhode Islander, so the flood risk is close to home, but more than half of all U.S. properties face a wildfire risk, and that is also getting worse with climate change. Insurers are taking notice. When climate-driven losses increase, premiums increase; and when climate-driven losses become too hard to predict, insurers pull out. Insurance becomes not only not affordable but not even available.
Since our hearings, insurance and housing markets in Florida, Louisiana, Texas, and California—States highly exposed to climate-driven hurricane, flooding, and wildfire risks—are in full crises. In May of last year, State Farm announced it was no longer offering new policies in California. Then in June, Allstate followed suit. That July, Farmers announced it was pulling out of the Florida market entirely. Just last week, Progressive Insurance announced that the company was ‘‘temporarily restricting’’ new homeowners business in Texas.
After Texas got a double whammy— historic wildfires through February and March and then the Hurricane Beryl flooding in July, knocking out power to nearly 3 million Texans and leading to ‘‘the most tornado warnings issued in the U.S. in a single July day since records began’’—people sat in flooded homes, without air conditioning, in 90-plus-degree heat, with mold growing, and Texas politicians still denied climate change.
Well, homeowner’s insurance companies don’t deny climate change. Nationally, average homeowner’s insurance premiums increased 33 percent between 2020 and 2023. In Florida, already high premiums more than doubled. Average insurance premiums in Florida are now more than $10,000 per year—average. Over in New Orleans, average premiums are closing on $10,000 per year. In Miami, they average almost $17,000 per year. This is fossil fuel-driven climateflation, and it presents an affordability crunch for American families.
Don’t just take it from me; take it from Federal Reserve Chairman Powell, who testified that rising insurance premiums have been a significant driver of inflation. He warned that ‘‘in the longer term, companies are withdrawing from writing insurance in some coastal areas. It’s a significant issue.’’ It even came into the Presidential debate last night, when Vice President HARRIS said what we know about climate change is that it is very real.
You ask anyone who lives in a State who has experienced these extreme weather occurrences who now is either being denied home insurance or is being jacked up on insurance rates. There is a cascade effect here: The crisis in coastal homeowner’s insurance bleeds over into mortgage markets. And when mortgage markets suffer, that affects property values—a cascade that poses what economists call a ‘‘systemic’’ threat to our economy. If your property can’t get insurance, good luck getting a mortgage.
Without mortgages, your only buyers are those able to pay cash, and that drives down your property values. The chief economist of Freddie Mac actually warned of a coastal property values crash that would damage the entire economy, ‘‘systemic’’ damage, just like we saw in the 2008 financial crisis and great recession. Florida and parts of Texas are already in that spiral, as unsold condominiums pile up in those markets and values fall. We face a national affordable housing challenge, so it is an added piece of bad news from housing nonprofits that the insurance rates squeeze ‘‘could threaten to end affordable housing development as we know it.’’
Back to wildfires. New York City saw this orange skyline, a phenomenon San Franciscans got to know too well in 2020’s wildfire season. That is because extreme wildfires have more than doubled over the past two decades, with the six worst wildfire seasons occurring in the last 7 years. That makes wildfire risk the evil twin of flood risk for insurance, mortgages, and property values. To quote our witness, Benjamin Keys, a professor of finance at Wharton: “This should be ringing alarm bells for housing markets all over the country.”
April’s Economist magazine—I have got a bigger version for folks watching us on C–SPAN. April’s Economist magazine—not exactly a green publication—went Dr. Keys one better, warning that the whole world should be concerned about climate change, putting $25 trillion of global real estate at risk, threatening a global financial meltdown—cover article. Read it yourself. Insurance, of course, isn’t the only cost being driven higher by climateflation. Just go to the grocery store.
At one hearing last year, we actually had bipartisan agreement that climate change is damaging crop yields and driving up prices. And those trends continue this year. Just look at breakfast. The price of orange juice is at an all-time high, driven by the lowest harvest in Florida in 90 years and a 24-percent decline in yield in Brazil, which supplies about 70 percent of the world’s orange juice— climateflation.
Brazil and Vietnam supply more than half of the world’s coffee beans. In both countries, drought drove coffee prices up. Vietnam just reported that its July coffee exports declined nearly 30 percent year over year, and worse was June, which declined 50 percent year over year—more climateflation. India and Thailand are the two largest exporters of sugar behind Brazil. Severe droughts in both of these countries have pushed the global cost of sugar to its highest level since 2011. According to the U.S. Department of Agriculture, U.S. consumers saw the price of sugar and sweets rise by 8.9 percent in 2023. USDA expects prices to increase another 5.6 percent this year. And cocoa production is also hit, with April prices up 235 percent in less than 6 months.
Olive oil, a kitchen staple, saw prices jump over 130 percent due to last year’s Mediterranean drought. The International Olive Council expects even less production this year as droughts persists. In Spain, bottles of olive oil are now one of the most shoplifted items. Climate change bodes ill for wine, too. A recent reveal of more than 200 studies predict that ‘‘70% of current wine-producing regions face a substantial risk of losing their suitability for wine-growing if global temperatures increase more than 2 degrees Celsius.’’ That is a danger threshold we are coming closer and closer to, giving new meaning to ‘‘in vino veritas.’’
When we wonder why grocery prices remain high, look at climate-driven disruptions, climateflation, not just to agriculture, as I have been describing, but also to the supply chains that move those products around. Last October, a witness of ours warned the committee that ‘‘the direct impact to extreme weather events can cascade through supply chains, affecting the flow of commodities and goods to regions and sectors leading to increased costs to business and to the broader economy’’—more climateflation.
And while we were listening to that testimony, a historic drought had reduced Panama Canal vessel traffic to 24 crossings per day. So vessels resorted to the Suez Canal or went around South Africa to avoid the delays of canal travel. And those longer routes came at a higher shipping cost, ultimately passed on to consumers in higher prices—more climateflation.
Climate change is even beating up the infrastructure that underpins our supply chains. As a witness told us last year, ‘‘Physical impacts have been widely observed for everything from extreme heat waves to flood events compromising roads, tarmacs, pipelines, and rail lines, with direct repair and delay costs being felt throughout the economy. Annual direct damage costs for road and rail impacts alone are estimated to be just under $20 billion a year by 2050.’’
This past July, New York had to close the Third Avenue Bridge from the Bronx to Manhattan because 95-degree heat caused the steel to expand. Severe flooding struck Iowa, South Dakota, and Minnesota in June and led to the collapse of a railroad bridge, the near failure of a dam, and the destruction of hundreds of homes. A bridge in Lewiston, ME, recently closed because its pavement started to buckle in high temperatures. One expert told the New York Times that extreme heat and flooding are accelerating the deterioration of bridges, causing them to ‘‘fall apart like tinkertoys.’’
And this will get worse: Extreme temperatures could cause one in four steel bridges to collapse by 2050. Americans aren’t just paying the cost of fossil fuel emissions through climateflation; they are paying it through direct Big Oil price-gouging. The oil and gas market, so-called, is actually controlled by an international cartel. And when OPEC jacks those prices, Big Oil in the United States happily rides along, loading up the biggest corporate profits in history. That, too, drives inflation.
One last thing. Last year, I came to the Senate floor and talked about what was then the hottest June on record, followed by the hottest July on record, followed by the hottest August on record, and then the hottest September on record. Well, this July, the world experienced the hottest day in at least 100,000 years. We have talked a lot about costs and costs matter.
The point of this speech is the economic harms of climate change, but that heat kills. Our hearing on public health warned how climate change acts as a ‘‘threat multiplier with health impacts happening through a variety of mechanisms, including worsening temperature extremes.’’
Shortly after that hearing, Phoenix, AZ, experienced 31 straight days of 110- plus-degree temperatures, shattering the previous record. This year, the Phoenix hot streak continued, with temperatures breaking 100 degrees from late May for more than 100 straight days. In Maricopa County, where Phoenix is located, at least 150 people have died from heat, and hundreds more deaths are still under investigation.
The Centers for Disease Control and Prevention estimates that over 1,200 people are killed by extreme heat in the United States every year. Heat deaths in 2023 were the highest in 45 years. In just 1 month—just 1 month, July 2023—the death count was near the annual average. One month nearly matched the annual average. An estimated 1,130 U.S. residents died of heat. And as work from Brown University and others have shown, that is likely an undercount.
In spite of all of this danger and its severe fiscal implications, some of my Republican colleagues complain that the Budget Committee is giving climate change too much attention. To them, it is not enough of a risk to our Federal budget, never mind that at least $10 trillion of our national debt stems from economic shocks—‘‘exogenous’’ they would call it in economics—economic shocks; specifically, the 2008 financial crisis and the COVID pandemic.
Well, climate change portends the biggest systemic shock of all. That is the lesson of all of these economic reports and studies, the lesson of the cover article from The Economist, and the lesson of our testimony in the Budget Committee hearings.
For homeowners in Florida, those dangers are already on their doorstep. They are suffering through sea level rise, extreme precipitation that floods homes and cars, intense hurricanes that batter families and communities, and the soaring insurance premiums that result, leading into the cascade from the insurance market to the mortgage market, to the property values market that Freddie Mac’s chief economist warned about.
To all of this, what is Florida Republicans’ answer? To try to silence conversation about the climate crisis, to forbid State employees from discussing climate change, even when it is an affordability crisis for their own constituents. There is really no doubt the dangers are growing worse and more widespread.
The economic shadow of those dangers is looming. Folks with fiduciary responsibilities told us in the Budget Committee: We have to address the dangers. Folks with business responsibilities told us in the Budget Committee how they have to adjust to these new dangers.
And I have been telling you for a while now, and I hate to say ‘‘I told you so,’’ but it is here now, and dammit, I told you so.
I yield the floor.
