This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: From heat-related illness and deaths to lost work hours and higher insurance and utility bills, climate change is already affecting California's economy. A new statewide report in California's Fifth Climate Change Assessment shows how the costs are rising, rippling across sectors and falling unevenly across the state—and in San Diego, the community is going to need to prepare for large-scale adaptation to much warmer conditions.
Led by Gordon McCord and Teevrat Garg of the University of California San Diego School of Global Policy and Strategy, the "Climate Impacts to the Economy" report is one of four statewide topical reports in the Fifth Assessment, a multiyear research effort led by the Governor's Office of Land Use and Climate Innovation (LCI) with state, academic, tribal and community partners. The report finds that the largest monetized damages are in health and labor. But the economic effects can extend well beyond the initial shock, as disruptions in one sector raise costs in others and compound losses across the economy.
"The interconnections are important," said McCord, teaching professor at the UC San Diego School of Global Policy and Strategy. "Large impacts on agriculture translate to food prices for households and businesses. What happens in one part of the economy can spread into others." Those losses are also unevenly distributed, with some regions, communities and industries facing much greater risks than others.
Inland counties in the Central Valley, Inland Empire and southeastern desert face disproportionate economic burdens. Low-income households, outdoor workers, tribal and rural communities, older adults, young children and people with preexisting conditions are among those most vulnerable to climate-related harms. Drawing on published research, the report brings together estimates of current climate-related costs and projections of how those costs may grow.
Among the findings: For households, those broader economic impacts can become very personal: higher food, energy and water costs; rising insurance premiums; health expenses; and the cost of making homes more resilient to heat and wildfire. A national estimate cited by the researchers puts lifetime climate-related costs for an American born in 2024 at $500,000 to $1 million. California's insurance market offers one example of how those pressures are already showing up.
The amount of property insured through the California FAIR Plan, the state's insurer of last resort, grew from about $50 billion in insured exposure in 2018 to roughly $750 billion as of March 2026. Rather than a single bottom-line figure, the report brings together evidence to show where climate change is taking the greatest economic toll—and on whom. "Understanding where the impacts are greatest and who is most exposed can help us make better decisions about where to focus our efforts," said Garg, associate professor of economics at the UC San Diego School of Global Policy and Strategy.
Extract — continue reading at the source.
