Report: Climate Change, Weather Impacts on Household Budgets Up to $900 Yearly

December 5, 2025 by

A working paper from three well-known economists shows the impacts of global warming and particularly extreme weather on the budgets of American households is up to $900 per year.

The paper was authored by former Treasury Department officials Kimberley Clausing, an economist at UCLA, Catherine Wolfram, an economist at the Massachusetts Institute of Technology, and Christopher Knittel, also an MIT economist.

The paper, detailed in an analysis and breakdown by Heatmap, looked at climate change impacts from heat and extreme weather on household budgets to show costs to U.S. households from climate change are $400 to $900 annually depending on how extreme weather were attributed to climate change. The aggregate cost is $50 billion to $110 billion nationwide.

“Insurance costs top the list of household costs the authors attribute to climate change more broadly, making up more than half of the total,” the Heatmap writeup states.

The authors cite a previous study in the journal National Bureau of Economic Research that examined homeowners insurance using 74 million premiums from 2014 to 2024 that was inferred from mortgage payments.

That 2024 study, Property Insurance and Disaster Risk: New Evidence from Mortgage Escrow Data, found that “rapidly rising premiums and a doubling of the pass-through from disaster risk into premiums,” with average premiums ring by 33% between 2020 and 2023, and particularly steep increases in disaster-prone areas.

Uzbekistan

It looks like Uzbekistan, a Central Asian nation with a population that is slightly less than California’s and a GDP of about half that of Utah’s, has muddied the waters.

A team of economists noticed problems with data in a much-cited study that found climate change would cause far more economic damage by the end of the century than previous estimates for one country, Uzbekistan.

That data was enough to significantly skew the results of the 2024 study in the journal Nature, titled The economic commitment of climate change, which now also bears the words “RETRACTED ARTICLE.”

The retraction was made this week when it was found that excluding Uzbekistan would make the economic damages from climate change look similar to earlier research. Instead of a 62% decline in economic output by 2100 in a world where carbon emissions continue at the current pace, global output would be reduced by 23%, according to the New York Times.

“Of course, erasing more than 20% of the world’s economic activity would still be a devastating blow to human welfare,” the NYT states. “The paper’s detractors emphasize that climate change is a major threat, as recent meta analyses have found, and that more should be done to address it — but, they say, unusual results should be treated skeptically.”

Asia’s Rising Climate Risk

Floods killed more than 1,300 people and caused at least $20 billion in losses since late November across parts of South and Southeast Asia, devastation that highlights the increasing risks from climate change and extreme weather for the fast-growing region, according to a Bloomberg story on Insurance Journal.

Three tropical cyclones combined with the northeast monsoon for the most significant rainfall decades in some locations, weaving a path of destruction that damaged homes, roads, crops, and slowed factory output.

“Scientists and analysts have pointed to the likely aggravating impact of climate change on the flooding, along with exacerbating factors including deforestation, failures in flood defenses and a lack of funding for disaster resilience,” the Bloomberg article states.

By the first week of the storm, floods had already swamped more than 800,000 households and rubber- and palm oil-producing areas in Thailand, and had displaced tens of thousands in Malaysia.

Bloomberg reports that countries in Southeast Asia consistently rank among the most at risk, with the Philippines, Myanmar and Vietnam among the 10 nations most affected by climate change last year.

Climate News

Interest in climate news and information remained relatively high and stable in most countries, although that comes amid a recent years’ “stagnation in public views, attitudes, and engagement with climate information over time,” a report out on Thursday from Reuters Institute and University of Oxford shows.

Last year’s report “identified a pattern of climate perception inertia,” which authors say largely continues to persist. However, they explain that shows a stability in how audiences digest climate change news rather than pointing to a notable change in such engagement.

“Interest in climate news and information remains high and stable in most countries, suggesting that declines in climate news use are partly driven by reduced supply (especially on TV),” the report states.

It explains that the use of climate news and information is down in France, Germany, Japan, the U.K., and the U.S, while it is stable in Brazil, India, and Pakistan.

It blames reduced climate news access via television, and reduced climate news use by those over age 45, for the declines. Climate news use among younger age groups and via other sources has remained stable, according to the report.

Roughly half of those surveyed say they trust the news media as a source of climate information, which has remained stable in most countries since 2022. Trust in scientists as a source of news and information about climate remains grew slightly since 2022 (68% to 71%), while trust in politicians and political parties remained low (23%).

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