How Climate Change is Making Your Life More Expensive

If you feel like things have been getting more expensive, you’re not imagining it. The average American household spent $15,400 more for basic necessities in 2025 than it did in 2019, according to research from the Common Sense Institute, a non-partisan research organization. That’s across a number of spending categories. On average, grocery costs increased 25.1%, while shelter and utilities costs increased 33.9%. 

There’s a number of explanations for the surge in prices—from pandemic induced supply chain issues, to tariffs, to wars in Ukraine and Iran.

Yet a significant number of Americans are also pointing to another factor: climate change. In a study released this week by the Yale Program on Climate Change Communication and the George Mason University Center for Climate Change Communication, 67% of American voters said they think global warming is affecting the cost of living in the United States, while 64% said it is affecting their own cost of living, pointing to increasing costs of home utility bills, groceries, and home insurance, among other things. 

They’re not wrong. Extreme weather driven by climate change is pushing up prices for everyone. One April paper published by Brookings Papers on Economic Activity found that climate change is already costing U.S. households between $400 and $900 a year, on average. 

The biggest expense many are seeing is insurance as companies face an increase in the number and severity of insurance claims, leading to rising premiums and fewer plan options. The researchers estimate climate change contributed to an average $360 increase in homeowners’ insurance premiums between 1990 and 2023.

“Even if you don't live in tornado alley, you might be seeing your insurance rates go up to cover the cost for people who are in the more danger-prone areas,” says Catherine Wolfram,  professor of applied economics at the MIT Sloan School of Management and one of the study’s authors. 

Utility rates are also going up. Residential electricity costs have risen by almost 40% since 2021 and residential gas costs have increased by 40% since 2019— outpacing inflation. 

That’s in part due to the cost of responding to natural disasters. “There are these more and more frequent storms that go through and wipe out the utility poles, and the utility rates eventually have to go up to pay for that,” says Wolfram. 

Not to mention that warmer weather also means more A.C. and higher electricity bills. “People are just paying more for air conditioning,” says Wolfram. 

A rapid rollout of clean energy technologies—like solar panels and wind— is one way governments can both make energy costs more affordable and bring down the cost of living, according to the International Energy Agency. The Trump Administration, however, is moving in the opposite direction—investing millions in keeping struggling coal plants alive despite little economic benefit.

Climate change is also driving up the price of groceries, with one estimate finding that climate change has raised the price of food in the United States by up to 6.7% over the past 50 years. Extreme weather fueled by rising global temperatures can damage crops, reduce yields, and disrupt supply chains—leading to higher prices in the grocery store. “With things like fresh produce coming from other countries, if you have an extreme weather event that is being made more intense and more frequent by climate change, it damages crops, and therefore reduces the availability of produce. That usually is then reflected in an increased price,” says Bob Ward, policy and communications director for the Centre for Climate Change Economics and Policy at the London School of Economics. 

To better plan for climate impacts, Ward notes that our global food system should be more diverse, to allow for potential shortfalls.