What’s trending in the first quarter of 2012?
Here are three things that will cost more going forward and one that will definitely cost less — and the causes behind all four are the same.
California, New York and Washington recently mandated that insurance companies report how they plan to handle growing claims from extreme weather events related to climate change. No, a little extra paperwork won’t cause your premiums to rise, but rather the record-setting damages, and consensus by meteorologists that a year like 2011 won’t be an anomaly in the future — because of measurable impacts of climate change.
Yes, according to the Insurance Information Institute the insured losses in 2011 approached $36 billion from record-setting extreme weather catastrophes, forces that will most certainly raise premiums, especially because the actuaries and forecasters are convinced there’s more to come. The institute also reports that the 552 deaths caused by tornadoes were the most in more than 75 years. Some things are priceless.
Going Way Up: Water
Texas imposed restrictions on water use in 1,000 localities, as droughts worsened and numerous experts reported that this is not your granddaddy’s periodic dry spell, but rather the direct result of climate change.
Spicewood Beach, a community of some 500 homes near Austin, became the first Texas town to officially run out of water and now must buy the precious commodity by the truckload.
A bit farther south, severe drought in Mexico has cost farmers more than a billion dollars in crop losses; killed 60,000 head of cattle and weakened 2 million more; and forced the government to spend nearly $3 billion in emergency aid.
"Droughts are cyclical — we know that — but they are growing more frequent and severe due to climate change," says Juan Rafael Elvira Quesada, the minister for the environment and natural resources.
Oh, did I mention that when the price of water goes up, so does the price of food? Mexico's food imports leapt 35 percent last year.