Severe weather occurrences are becoming more frequent and intense across the United States and worldwide. Events such as the January wildfires in Los Angeles—driven by prolonged dry conditions and gusts exceeding 80 mph—and the catastrophic July rains that triggered fatal floods in Texas’s Hill Country highlight the growing threat posed by climate extremes.\n\nThese disasters can severely affect economic systems. They frequently interrupt local enterprises and employment networks, influence long-term real estate valuations and lending conditions, and occasionally generate secondary disruptions in industries and regions far from the initial impact zone.\n\nResearchers at Resources for the Future are examining the economic consequences of such events and evaluating policy options. They are also exploring whether individuals and companies fully recognize the risks associated with extreme weather and adjust their decisions—such as where to reside, operate, or invest—accordingly. For instance, expanding construction in vulnerable zones like coastal floodplains and wildland-urban borders raises concerns. Are residents aware of the dangers linked to hurricanes or wildfires when choosing to settle in high-risk areas? Do housing prices and insurance premiums accurately reflect these hazards? Which strategies are most effective in reducing exposure to dangerous climatic conditions?\n— news from Resources Magazine\n\n— News Original —\nInvesting in Mitigating the Economic Impacts of Extreme Events\n\nWeather extremes are on the rise in the United States and across the globe—and they’re getting even more intense. From the destructive Los Angeles wildfires in January, fueled by drought conditions and wind speeds of more than 80 miles per hour, to a rainfall deluge that led to deadly flooding in the Texas Hill Country in July, examples abound of death and destruction from extreme weather events. \n\nExtreme events can have wide-ranging economic impacts. They often disrupt local business operations and labor markets, have long-term impacts on house prices and mortgage markets, and sometimes lead to ripple effects in sectors and locations well beyond where the event strikes. \n\nResources for the Future researchers are analyzing these impacts and potential policy responses. We also are investigating the extent to which people and businesses are fully aware of extreme weather risks and incorporate related lessons into decisions about where to live and work and how much to invest in adaptation. For example, increasing development in high-risk areas, such as coastal floodplains and certain parts of the wildland-urban interface, are a concern. Do people understand the hurricane and wildfire risks when they move to these risky locations? Do home prices and insurance costs reflect risks? What policies work best to minimize exposure to harmful weather extremes?
