Staff Reporter
California’s climate crisis is no longer a distant forecast but an everyday financial burden for residents. A major new analysis from the Center for Law, Energy & Environment at the University of California, Berkeley, commissioned by the nonprofit Next 10, finds that the hidden costs of extreme weather, wildfires and heat are driving up household bills, cutting wages and straining healthcare systems.
STORY HIGHLIGHTS
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California climate crisis raising costs for utilities, healthcare and wages.
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$500,000 lifetime costs projected for Americans born in 2024; up to $1 million for severe effects.
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January wildfires killed 31 people, destroyed 18,000 structures and caused $4.6 billion GDP losses.
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Wildfire-related costs make up to 13% of recent power bill hikes; heat raises costs 1.6% per day at 95°F.
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Smoke exposure costs $84 per person per day in Southern California; Bay Area health costs hit $7.8 billion in 2018.
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Outdoor workers could lose $55.4 billion in earnings by 2050.
A Deeper Look at Hidden Costs
Researchers examined more than 100 primary sources to draw a clearer picture of how the California climate crisis is reshaping the state’s economy.
“Climate change is raising the cost of living in ways that we may not know,” said F. Noel Perry, founder of Next 10.
The report shows agricultural workers in the Central Valley losing jobs because of drought and heat. It describes patients missing medical care due to extreme weather and insurance premiums spiking as wildfires intensify.
Affordability Crisis Meets Climate Emergency
California already ranks among the nation’s most expensive states, with high housing and living costs. Since pandemic-era safety nets ended, the state has posted the highest poverty rate in the U.S., tied with Louisiana. The report makes clear that the affordability problem cannot be separated from the California climate crisis.
Wildfires’ Economic Toll
Year after year, the state battles devastating wildfires, grueling heatwaves and intense winter storms. In January, flames swept through Altadena and Pacific Palisades, killing 31 people and destroying more than 18,000 structures.
According to a Moore Foundation report cited in the analysis, between 2017 and 2021 wildfires erased about $60 billion in income across the state. Entire communities have been displaced, and generations of family wealth wiped out.
Power Bills and Health Costs Rising
The analysis highlights the pressure on household budgets. Wildfire-related costs account for up to 13% of recent electricity rate increases. Each time temperatures reach 95°F, daily electricity costs rise by 1.6%, pushing bills higher in heat-stricken communities.
The health toll is also steep. A 2012 study cited in the report estimates that smoke exposure from wildfires in Southern California costs about $84.42 per person per day. In 2018, wildfire smoke contributed to $7.8 billion in health costs in the San Francisco Bay Area. By 2050, outdoor workers are projected to lose $55.4 billion in future earnings as the climate crisis intensifies.
Immediate, Not Abstract
“People often perceive climate change as a set of future costs,” said Ken Alex, director at UC Berkeley’s Center for Law, Energy and Environment. “But the consequences are already impacting people in unexpected ways, including inflation, food prices, availability and insurance.”
Alex added: “We really wanted to take a deeper look at the costs to individuals and to businesses. These are immediate costs that are affecting people in their current lives.”
“It’s not a future set of abstract numbers. It’s real and it’s immediate,” he said.
Cost of Action vs. Cost of Inaction
The report argues that investing in climate solutions can reduce costs rather than increase them.
“Taking action on things like climate change through technology reduces costs rather than increases it,” Alex said. “If we continue to fail to take action, that’s actually more impactful from a cost perspective.”
Looking Ahead
Report authors plan further research to uncover additional costs and hope climate change becomes a focal point in California’s next governor’s race.
“We cannot solve the affordability crisis in California without also solving the climate crisis,” said Perry.
The California climate crisis is no longer a future threat—it is already inflating utility bills, cutting wages, and driving up healthcare costs. Wildfires, extreme heat, and smoke are reshaping daily life, while lifetime costs for residents could reach up to $1 million. Addressing climate change is essential to solving California’s affordability crisis now and for generations ahead.
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