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Is Climate Change an Engine of Inequality?

Climate change disproportionately burdens the most vulnerable Americans while enriching a few at the top.

Research & Commentary
July 25, 2014

by Sheila Kennedy

By Sheila Suess Kennedy

“The way things are” often translates into an unthinking acceptance of burdens that could—and should—be allocated.

Climate change is a telling example of this phenomenon. It disproportionately burdens the most vulnerable Americans while enriching a few at the top.

In a recent LA Times column, Mark Schapiro points out that American taxpayers are already paying for the costs of climate change. Those costs may not feel like the much-disdained carbon tax, but if we are honest, they amount to one. Every time the average American uses fossil fuels, he increases his tax burden.

Schapiro counts the costs of recovering from Superstorm Sandy, Hurricane Katrina and a growing number of major droughts—the sorts of dramatic climate “incidents” that are likely to become much more frequent as climate change advances. And he points to the economic consequences of changing weather patterns for everyday consumers. [pullquote] American taxpayers are paying for the costs of climate change. [/pullquote]

“Start with food: Farmers have always faced good years and bad years, but as bad years get more frequent, taxpayers pick up more and more of the tab.”

Last year, the Government Accountability Office listed climate change as a “major financial threat” for the first time in its audit of financial risks for the government. Why? Because of the federal government’s investment in flood and crop insurance programs.

Federally subsidized payouts for crop insurance have skyrocketed (from $4.3 billion in 2010 to $10.8 billion in 2011 and to $17.3 billion in 2012). Even more significantly, the USDA has estimated that the 2012 drought led to a 20% jump in meat prices. And the price of cereals has doubled since 2000, according to the U.N. Food and Agriculture Organization, again due to climate change.

Acidification of the oceans and rising sea levels (from melting ice packs and glaciers) have given us declining yields—and soaring costs—of shellfish.

The list goes on. And that’s just at the grocery store.

Scientists in the journal Health Affairs report that “over the first nine years of this century, six climate-related events (floods, hurricanes, infectious disease outbreaks) led to 760,000 encounters with the healthcare system amounting to as much as $14 billion in health costs.”

Even that substantial sum is dwarfed by the millions spent by the CDC and other research institutions to study the ways in which climate change is enabling an ever-expanding universe of bacteria and diseases affecting humans, plants and animals—for example, mosquito-borne West Nile virus or valley fever. [pullquote] The general public bears the costs of climate change while fossil fuel companies enjoy massive subsidies. [/pullquote]

There is much more, but the bottom line is that the general public bears the costs of climate change in both higher prices and higher taxes at the same time that the fossil fuel companies contributing to the problem continue to enjoy massive subsidies.

Furthermore, the public is paying a very high price for the environmental consequences of fossil fuel use.  The farmer who needs fuel for his combine, the factory worker who fills his tank for his commute to work, the soccer mom doing car pool duty—these are the people who are paying the tax that isn’t labeled a tax. (What was the old saying? If it walks like a duck…?)

The major corporate producers of these fossil fuels continue to make unprecedented outsize profits, thanks in large part to public policies that underwrite and subsidize fossil fuel exploration. Those energy policies exacerbate inequality by placing the costs of climate change and energy exploration almost entirely upon the consumer. [pullquote] Energy policies exacerbate inequality by placing the costs of climate change upon the consumer. [/pullquote]

There are obviously much more important reasons for addressing climate change than the unfair allocation of costs—reasons of life and death. But those of us who advocate for responsible environmental policies also need to insure that the costs of necessary remedial measures are equitably distributed.

We need to take care that the burdens do not always fall on the most vulnerable–and least culpable—Americans.

Sheila Suess Kennedy, J.D. is Professor of Law and Public Policy in the School of Public and Environmental Affairs at Indiana University Purdue University at Indianapolis. Her scholarly publications include eight books and numerous law review and journal articles. Professor Kennedy is a columnist for the Indianapolis Business Journal and a frequent lecturer, public speaker and contributor to popular periodicals. She blogs at

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