A troubling new report by researchers at the University of California, Berkeley and the nonprofit think tank Next 10 warns that the warming climate is causing a cost-of-living crisis in California, with no signs of letting up anytime soon. 

How is the climate driving up the cost of living?

As CleanTechnica explained, the increasing frequency and intensity of droughts, wildfires, and floods across the state are resulting in higher insurance premiums, healthcare costs, and electricity bills, making it especially difficult for low-income residents to make ends meet. 

Farmers lost an estimated $1.7 billion in revenue and roughly 5,000 jobs because of severe droughts in 2022. Major wildfires in the past five years have also contributed to significant income losses. From 2017 to 2021, wildfires led to an estimated $60 billion in lost wages, and the devastating 2025 Los Angeles fires caused nearly $300 million in lost income.

Wildfire mitigation costs and extreme heat have resulted in higher electricity bills for many Californians. An analysis of low-income residents found that families spent 1.6% more on energy for each additional day above 95 degrees Fahrenheit. Furthermore, wildfire-related fees increased the average customer's bill by 7-13% in 2023.

All of these climate disruptions translate to more infrastructure damage, and Californians are paying the price with skyrocketing insurance premiums. Some insurance providers have increased rates by as much as 23% to cover losses from wildfires, and households in some communities are paying up to $4,000 more in premiums.

Healthcare costs are also on the rise, with Southern Californians paying an additional $85 per day due to the effects of wildfire smoke alone. 

These are just a few of the impacts of the changing climate in California. Lost revenue from property taxes, risks to the mortgage lending and housing markets, higher grocery bills, and the economic toll of more frequent floods and sea-level rise are also contributing to the rising cost of living. 

Why are climate-related expenses concerning?

Higher living expenses are concerning for every Californian, but especially those with lesser resources to adapt or even remain safe in extreme heat and other disasters.

"This research shows climate change is already a kitchen-table issue making life significantly more expensive for Californians and people across the U.S.," said F. Noel Perry, founder of Next 10, in a press release. "This research uncovers less-publicized impacts of climate change like the rising costs of healthcare due to smoke and heat, and the loss of wages for outdoor workers. Without decisive action, these costs will continue to accelerate, hitting low-income communities hardest."

While the cost of addressing climate change is substantial, the price of doing nothing will be far greater. According to the Climate Policy Initiative, financing climate adaptation and mitigation would cost the economy between $5.4 and $11.7 trillion a year until 2030; yet, inaction would result in a staggering economic loss of $1.26 quadrillion.

Acting now to mitigate the worst effects of climate change will not only save countless lives but also safeguard the economy and ensure people can afford basic needs.

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