The US government is fighting the effects of climate change on your finances

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In this aerial photo captured by a drone, flood waters surround storm-damaged homes in Lafourche Parish, LA, on Tuesday, August 31, 2021 as residents try to recover from the effects of Hurricane Ida.

Steve Helber | AP

Climate change can have a direct impact on your wallet.

Not only can this affect your bills, everything from insurance to groceries to utilities, but if you are hit by an event like wildfire or a hurricane, you could lose your home, income, or both.

The U.S. Treasury Department is now taking steps to better understand the financial risks of climate change and climate change for Americans, especially in low-income and historically deprived communities, a senior administrative official told CNBC.

It is part of the overall effort of the Biden government to combat climate change.

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“Americans across the country have seen firsthand how extreme weather events, which have increased due to climate change, can affect their financial well-being,” said Treasury Secretary Nellie Liang.

“Aside from events like storms and forest fires, we expect climate change to affect insurance, credit and household savings,” added Liang.

To begin with, Liang plans to meet members of the Treasury Department Financial Education Commission, composed of the heads of 19 other federal agencies, on October 13 at 2 p.m. ET.

The meeting that can be viewed online Not just the risks climate change poses to Americans’ finances, but who is most likely to bear the risk and the resources, tools and actions needed to make households financially resilient, the senior administrator said.

The United Nations recently issued a sharp warning about the effects of climate change. His report states that limiting global warming to nearly 1.5 degrees Celsius, or 2 degrees Celsius above pre-industrial levels, will be “out of reach” for the next two decades without reducing greenhouse gas emissions immediately, quickly and on a large scale .

It’s not just higher temperatures. Storms, droughts and sea level rise are all a result of climate change, most of which is attributed to human activity.

Disadvantaged communities are particularly at risk.

People with low incomes or without a high school diploma are about 25% more likely to live in areas with the highest projected loss of work hours due to the increase in high temperature days with 2 degrees Celsius of global warming, according to a report by the U.S. Environmental Protection Agency found.

It is important that the Treasury Department carry out this work in collaboration with other experts inside and outside the government to help families prepare for climate-related financial risks.

Nellie Liang

Under Secretary of the US Treasury Department

In addition, black Americans are 40% more likely to live in areas with the highest projected increases in death rates from climate-induced changes in extreme temperatures. Hispanics are 50% more likely to live in coastal areas with the highest projected increases in traffic delays from climate-induced changes during floods, the report said.

The Treasury Department understands that it is not a one-size-fits-all solution and plans to address the needs of different populations, the official said.

While there is still no timeline for a possible response, it will likely require resources for Americans to help them make better financial decisions, as well as policy changes.

“It is important that the Treasury Department carry out this work in collaboration with other experts inside and outside government to help families prepare for climate-related financial risks and to support local governments, philanthropic agencies and financial intermediaries in building the community’s financial resilience “Said Liang. called.

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.


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