Yes, climate change is costly.

I was reading the latest from Spain where the government there is going to give employees paid climate leave of up to four days. The idea is that in the event of a natural disaster, employees do not need to report to their offices for work. The basis for this new law can be seen in the October 29, 2024 floods where several companies ordered employees to stay at work in spite of red alert notices from the Spanish national weather agency.

This approach certainly makes sense from a prevention of loss of life point of view. Also, by having employees stay at home, the roadways could be less congested thereby allowing emergency vehicles easier passage. I can also see benefits for those with kids. If school is canceled due to a climate event. it is easier to take care of kids at home than trying to make child care arrangements.

There is a real cost to this time off though. As I recall, some of the impacted companies were manufacturing factories. Having to shut down a factory can be quantified in dollars and cents. One can also calculate the cost of climate change flash floods by looking at the decreased productivity in a year on year comparison. Bottom line: Climate change is costly.

But the cost goes beyond the obvious. Spanish Economy Minister Carlos Cuerpo warned the cost of extreme weather events could double by 2050 as the government confirmed €2.3 billion of fresh aid for flood victims. With the frequency of disasters increasing along with the cost of recovery, might it be time to focus on climate change solutions? Might prevention be better than reactive measures?

Certainly home insurance companies in Florida have gotten the message as I noted in a prior article. Farmers, Progressive, and AAA insurance companies have either quit the Florida market or reduced coverage. While that could be good for their bottom line in that they are reducing the likelihood of claims from Florida, that approach does not address climate change but rather potentially avoids the cost. Taking decisive action will require hard work but from a cost point of view, that makes sense.