Seniors understand big threats. Right now, they face some of the biggest dangers of COVID-19, from high death rates at nursing homes to stretched fixed incomes covering higher prices on food and other essentials. That’s why the seniors I speak to get the challenges of climate change.
Like the pandemic, climate change is a threat right now. We are seeing more extreme heat waves that disproportionately affect older Americans. We are seeing rising sea levels and more frequent coastal storms that threaten places with disproportionate numbers of retirees, like Florida and South Carolina. And we are experiencing an uptick in infectious diseases — a problem scientists have linked to the climate crisis.
But beyond the problems on their doorstep, seniors get the threats looming in the not-so-distant future.
One of those threats is a rapid collapse in coastal property values. In places like coastal Rhode Island, sea levels have risen about a foot in the last century, and the pace of that rise is accelerating as air and ocean temperatures climb. Scientists expect sea levels to rise several feet by the end of the century. Meanwhile, the excess heat energy seeping into our oceans is spawning destructive coastal storms at a higher rate. A record dozen named storms made landfall in the U.S. this year. That follows 2018 and 2019, when massive storms like Dorian, Florence, and Michael slammed into our coasts.
Sea level rise and coastal storms are a menace to coastal property values. We are already seeing lenders demand enormous down payments on coastal homes and businesses. Flood insurance premiums climb, and yet flood insurance policies often don’t cover the full worth of a home, leaving owners holding the bag. Meanwhile, ratings agencies — the Wall Street firms charged with assessing risks on behalf of investors — are beginning to evaluate coastal communities’ bonds for climate-related risk, putting a squeeze on local governments.
The sum of all these pressures is huge: If property cannot be insured, it cannot be mortgaged; if it cannot be mortgaged, demand for that property falls. Freddie Mac has warned that a crash in coastal property values would be worse than the housing crash that triggered the 2008 financial crisis. For seniors who retired to our coasts, this all means one of their biggest assets — their homes — could be in serious jeopardy.
And that isn’t the only asset in jeopardy due to climate change. Central banks like the Bank of England, Bank of France, Bank of Canada and European Central Bank — along with a host of other financial experts — warn of a “carbon asset bubble” crash. That crash will come when we stop burning fossil fuels and demand for those fuels falls. Big oil and gas companies — and their assets, many held by large insurers and banks — are likely to decline in value quickly.
The bursting of the carbon asset bubble is what economists call a “systemic financial risk” — a risk to the entire economic system. The blow to markets will cost millions of Americans their jobs, homes and retirement savings. As the Stanford Business School’s Corporations and Society Initiative puts it, “global economic losses from climate change could reach $23 trillion — three or four times the scale of the 2008 financial crisis.”
Seniors remember what happens when society fails to heed clear warnings. They have lived through the savings and loan crisis, the dot-com crash, the Great Recession and now the COVID-19 pandemic. Not only do they see the effects of climate change in their lives today, they can imagine the harms of future climate catastrophe better than most. They, like a majority of Americans today, know it’s time to act.
Whitehouse is the junior senator from Rhode Island.