Aug 11, 2023
For many, it’s been a summer in which your trusty AC went toe-to-toe with relentless heat. The month of July turned into a sweaty marathon, clocking in as the hottest on record. As the heatwaves, wildfires, and health alarms make headlines, they also have economic consequences.
Last year, a study found that the cumulative economic loss due to heat waves ranged from $5 trillion to a staggering $29 trillion worldwide from 1992 to 2013. In the U.S, some predict that the economy could suffer a $100 billion annual blow due to heat by 2030, with this figure quintupling by 2050 due to productivity losses.
Across the pond in Europe, it's a similar tune. One analysis found that the pressure on public spending as a result of these events resulted in debt-increasing effects of up to 5 percentage points of GDP.
Zooming in on the problem, here are three ways you might feel the heat scorch your wallet:
Escalating energy bills: When the heat cranks up, so does the demand for cooling, and you can expect to see it in your ConEd bill. The National Energy Assistance Directors Association estimates home energy bills will rise 11.7% to an average of $578 this summer, up from $517 last summer.
Gas price surge: Gasoline prices have soared to nine-month peaks. Higher temperatures disrupt refinery activities, and as refineries suffer outages, pump prices soar. The national average for regular gasoline has climbed by 30 cents over just the past month alone.
Insurance premiums: Events like hurricanes and wildfires have made insurance more expensive. Insurers are significantly impacting their prices in risky markets. In Texas, for example, the average cost of home insurance has risen about 40% since 2015.
Of course, there will be beneficiaries — electricity companies, air-conditioner manufacturers, coal mining businesses, the snack bar at your local pool, and ice cream shops.
But, if you were thinking of a vacation to escape the cruel summer (or your electricity bills), you might be disappointed. Athens even shut down the Parthenon as the thermometer crossed the 100-degree mark.
– Your Titan Team
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