As the relentless march of climate change continues to reshape our world, the looming threat to residential property is becoming increasingly apparent. From the inundation of coastal homes to the destruction wrought by severe weather events, the global housing market faces an existential challenge that demands urgent attention. A recent analysis paints a stark picture: by 2050, the cumulative impact of climate change could wipe out a staggering $25 trillion in property value worldwide, rivalling the annual GDP of the United States.

The question of who bears the burden of these costs is not a simple one to answer. Homeowners, governments, insurers, and taxpayers are all implicated in this complex web of responsibility. However, the prevailing inertia in addressing the issue threatens to exacerbate the problem, leaving us vulnerable to devastating economic and environmental consequences. At the heart of the matter lies a fundamental imbalance: while the costs of climate change are shared collectively, the responsibility for mitigating its effects often falls on individuals.

Homeowners, many of whom may have unwittingly purchased properties in high-risk areas, find themselves on the front lines of this crisis. Yet expecting them to bear the full financial burden of retrofitting their homes or paying exorbitant insurance premiums is both unfair and impractical. Similarly, governments cannot afford to shirk their duty to protect their citizens and safeguard the public interest. Investing in infrastructure, implementing effective mitigation measures, and incentivising sustainable practices are essential steps in building resilience against the ravages of climate change.

However, the temptation to prioritise short-term economic interests over longterm sustainability must be resisted at all costs. Insurers, too, play a crucial role in the equation. As the frequency and severity of natural disasters escalate, the viability of traditional insurance models is called into question. The spectre of a “climate-insurance bubble” looms large, threatening to destabilise the housing market and strain public resources. It is imperative that insurers adapt to the changing landscape by reassessing risk, fostering innovation, and promoting policies that encourage resilience-building efforts. Ultimately, addressing the challenges posed by climate change requires a concerted effort on all fronts.

Governments must take the lead in implementing proactive policies and investing in sustainable infrastructure. Insurers must adapt to the new realities of climate risk and provide adequate coverage for homeowners. And individuals must be empowered to take action to protect their homes and communities from the ravages of climate change. The $25 trillion price tag of inaction is a stark reminder of the urgent need for decisive action. The time for complacency is over. Only through collective action and unwavering commitment can we hope to mitigate the worst effects of climate change and secure a sustainable future for generations to come.