CONNECT WITH US! (800) 837-8848 /

Economic Perils and Opportunities of Extreme Weather

While the causes of climate change
may be for up for debate, its impact on our economy and potential adjustments
to business models are not.

For example, rampant coastal flooding
in South Florida has prompted at least one research institute to predict insurers
will stop offering homeowners policies in the region. As a result, the
institute says, banks will stop offering 30-year mortgages. To retain residents
and attract new people to the region, the greater Miami area has invested heavily
in mitigation and adaptation efforts to literally stem the tide. Of course,
these efforts lend themselves to new jobs and infrastructure spending, which
help stimulate the local economy.1

While extreme weather may not
deter you from buying the home of your dreams, it is worth considering a few
defensive moves to help reduce your financial risk when considering a home

  • Check whether the
    home is in a flood zone and has suffered any damage in the past
  • Shop for
    homeowners insurance coverage before you buy a property to make sure you can
    budget for it long term
  • Find out what
    materials and techniques were used in construction to see whether they meet current
    building codes

Regardless of where you live, it’s
important to separate your housing security from your long-term financial future.
This means taking precautions, including having adequate homeowners insurance,
to help ensure that property losses will not affect your retirement income. And
if you’d like assistance in assessing your retirement income strategy, we’re
here to help.

Florida is not the only state suffering
from the effects of severe weather. In fact, Washington, D.C., recently
experienced 4 inches of rain in just one hour, triggering flash flooding in the
metro area.3 Meanwhile, wildfires in the western U.S. are worsening,
burning twice as many acres each year since 2000 than they did in the 1990s.4

There are a couple of different
ways to view growing instances of extreme weather. First, there’s the negative
impact. One study concluded higher temperatures could cost the nation $520
billion each year among 22 different sectors, including agriculture and

However, another way to look at
combating climate change is through opportunity for economic growth. For
example, Iowa’s investments in wind farms have resulted in $58 million in state
and local tax payments and $20 million to $30 million in lease payments to
private landowners. Nearly 10,000 Iowans have wind-related jobs in the No. 2
state for both wind power capacity and share of total electricity generation.6

Nationwide, the solar industry
employs more than 240,000 workers and contributed $17 billion to the American
economy in 2018. In the past 10 years, solar energy has averaged 50 percent
annual growth in the U.S.7

A provision in the Tax Cuts and
Jobs Act of 2017 offers another economic boost. Investments made in specific
low- and moderate-income communities — dubbed Opportunity Zones, or OZones —
qualify for capital gain tax deferral, partial forgiveness of tax on capital
gains and forgiveness of additional gains on those investments. The initiative
is expected to yield $200 billion to $300 billion worth of investment in the
nation’s 8,700-plus OZones, including green economy projects.8

Content prepared by Kara Stefan

1 Theresa Pinto. Miami Beach Times. May 30, 2019. “Experts
Say Sea Level Rise May Kill the 30-year Mortgage in Florida.” Accessed Aug. 19, 2019.

2 Natalie Campisi. Bankrate. April 24, 2019. “Rising
tides, intense storms and floods wake-up call for homeowners, homebuyers.” Accessed Aug. 19, 2019.

3 Jason Samenow, Ian Livingston and Jeff
Halverson. The Washington Post. “How and why the D.C. area was deluged by a
month’s worth of rain in an hour Monday.” Accessed
Aug. 28, 2019.

4 Claire Wolters. National Geographic. Aug. 9,
2019. “Wildfires, explained.” Accessed
Aug. 28, 2019.[CM2] 

5 Renee Cho. The Earth Institute at Columbia University.
June 20, 2019. “How Climate Change Impacts the Economy.” Accessed Aug. 19, 2019.

6 Sen. Chuck Grassley. Newton Daily News. Aug. 15, 2019.
“Wind powers big opportunity.” Accessed Aug. 19, 2019.

7 Vallejo Times-Herald. July 25, 2019. “Thompson,
others, introduce Renewable Energy Extension Act.” Accessed Aug. 19, 2019.

8 Julia Parzen and Graham Richard. GreenBiz. Aug. 14,
2019. “Opportunity zones could provide major boost for clean energy,
sustainable development.” Accessed Aug. 19, 2019.

We are an independent firm helping individuals create retirement
strategies using a variety of insurance products to custom suit their needs and
objectives. This material is intended to provide general information to help
you understand basic retirement income strategies and should not be construed
as financial advice.

The information contained in this material is believed to be reliable,
but accuracy and completeness cannot be guaranteed; it is not intended to be
used as the sole basis for financial decisions. If you are unable to access any
of the news articles and sources through the links provided in this text,
please contact us to request a copy of the desired reference.


to Compliance: I changed this a bit and sourced the info from two different
places because I thought the original source was too much of an opinion piece.