Rising seas, bigger floods, and other increasing climate hazards have created a dangerous instability in the U.S. financial system.
Homes constructed in flood plains, storm surge zones, regions with declining water availability, and the wildfire-prone West are overvalued by hundreds of billions of dollars, recent studies suggest, creating a housing bubble that puts the U.S. financial system at risk.
The problem will get worse as sea level rises and storms dump heavier rains and if unwise building practices continue. But increased awareness of climate risks, more realistic flood insurance pricing, and reform of government disaster policy could reduce this overvaluation — and the risk of an economically disastrous bubble burst.
h/t BoatSurfer600