Approximately 53% of all U.S. counties face elevated exposure to at least one climate hazard of flooding, wildfire, or extreme heat. As extreme weather events and natural disasters become more frequent and widespread nationwide, families must cope with recurring financial shocks that chip away at their financial security and erode their ability to build and sustain wealth, especially in the face of future climate hazards. Families may face financial instability without personal resources and additional support such as insurance and government assistance to remain resilient in the face of these financial shocks.
Drawing upon the research literature and over 30 experts from the public, private, and nonprofit sectors, Aspen FSP has created this brief to better understand how climate stressors (such as extreme heat) and climate disasters (such as floods) affect household financial security. It demonstrates how climate stressors and disasters can create direct and indirect financial disruptions for families who turn to financial safeguards before, during, and after a climate hazard to protect and recover their finances. However, current safeguards are not necessarily designed to allow a household to be better off after a climate hazard—or be sufficiently prepared for the next one. With each subsequent disaster, households are likely to become worse off. Policymakers, climate leaders and advocates, and financial security experts and practitioners can use this brief to develop solutions addressing the dual pressures of climate impacts and financial insecurity.
Acknowledgments
The Aspen Institute Financial Security Program thanks PayPal for its generous support of this brief.
