Health Costs Related to Climate Change Are Piling up for Individuals and Businesses
Health care costs are rising as climate change reaches vulnerable global populations. Surprisingly, experts have only begun realizing the financial burdens caused by extreme weather events, famine, disease and natural disasters.
Although individual health costs — amid inflation and economic uncertainty — have reached breathtaking figures, businesses have also felt the fiscal pang of climate risks on their workforce. Sadly, the Earth shows little sign of cooling — meaning costs will continue increasing simultaneously.
Quantifying Health Care Costs of Climate Change
It’s difficult to put a number on the health care costs of climate change, but economists and climate scientists have still managed to do so.
A 2021 National Resources Defense Council (NRDC) report suggests climate change accrues $820 billion in health care costs annually. Ozone, allergens, extreme heat and vector-borne diseases are but a few factors costing between $11.4 million and $7.9 billion.
Natural disasters — wildfires, earthquakes and floods — also implicate human health. For instance, an intense hurricane may cause severe flooding, resulting in injury and toxic exposure to contaminated water through inhaling, consuming or wading through it.
Flood water can cause severe diarrheal diseases by carrying agricultural and industrial pollutants, waste, chemicals and sewage into the planet’s 2.5% of potable freshwater — increasing pathogen-induced health outcomes.
Researchers believe Sri Lankans spend $19 million annually on flood and drought-related health care costs — about 83% goes toward water and vector-borne diseases.
It’s obvious how events like these pertain to climate change’s direct health care costs — hospital visits, rehabilitation, prescriptions and more. However, the indirect financial burden looks more like lost productivity, absenteeism from work and school, and economic ruin.
Climate Change Impacts on Human Health
Nearly 67,512 people visit the hospital and 702 die yearly from extreme heat as the United States endures increasing average temperatures.
According to one study, Hispanics comprised 85% of excessive heat-related deaths — most of which were in California, Texas and Arizona. Across the Northeast, heat is associated with a higher risk of heart attack and stroke during birth among Black mothers.
Climate change-related health disparities are evident among people of color, many of which are low-income and uninsured with disabilities. Blacks are 42% more likely to have asthma and 2.8 times more likely to die from it than white people.
In Minnesota, Black residents living in areas with high air pollution visited the emergency room five times more often than white residents for severe asthma. About 500 Minnesotans also went to the hospital for heart and lung problems due to air pollution in 2015.
While health coverage across races began evening out between 2019 and 2021, 21% of nonelderly Native Alaskans and 19% of Hispanics were uninsured. Additionally, about 11% of Blacks and Pacific Islanders were uninsured, compared to 7% and 6% of White and Asian Americans.
Climate Change Impacts on Business Health
Businesses face a 9%-10% rise in health care costs due to provider inflationary pass-through until 2026. The trend may hinder profitability as companies contend with higher benefits expenses.
Offering affordable health coverage with low-deductible plans to employees is crucial, though. Climate change could cause an 18% global labor shortage in low-exposure industries during a 3° Celsius warming scenario. Likewise, some expect a 25% labor reduction in high-exposure settings, such as in Africa, where workers spend much of their time outside.
In the U.S., health-related productivity loss costs $1,685 per employee annually — totaling $225.8 billion each year.
Of course, it would be remiss for businesses to overlook mental health benefits — another costly but necessary offering. Climate change has negative psychological consequences, which may further hinder productivity. About 73% of employers offer or will provide mental health care benefits to employees.
Mitigating Climate-Induced Health Care Costs
The climate crisis will continue to pressure public health and the economy, especially in vulnerable communities. Therefore, politicians, businesses and individuals should consider the following recommendations:
- Public health interventions for climate-induced disease
- Equal access to clean energy, especially in underserved communities
- Equitable transition to zero-emissions transportation options
- Investments in affordable workplace health benefits and employee wellness programs
- Improved access to organic food — while individuals adopt plant-based diets
- Investments in renewable energy technologies
- Individual actions to reduce personal health care risks
The health care industry must also adopt climate resilience and target its carbon footprint. The U.S. saw a 6% increase in emissions from 2010 to 2018, more than anywhere else globally.
Time for a Health and Climate Reckoning
It’s time for the world to reckon with climate change’s rising health care costs. Temperatures will continue to increase, bearing down on individual and business health. Response is vital to ensure healthy lives and a prosperous economy amid the crisis.