Climate disaster-related spending globally has reached $18.5 trillion since 2000, according to a new analysis by Bloomberg Intelligence.

This comes as US spending on climate-linked disasters, such as hurricanes and wildfires, has neared $1 trillion a year.

According to a new report from Bloomberg Intelligence, the financial toll of climate-related impacts has now topped 3% of the United States’ gross domestic product, reports Bloomberg.

In the 12 months leading up to May 1, nearly $1 trillion was allocated to recovery efforts, adaptation, and other climate-linked expenditures. Analysts from Bloomberg Intelligence described this redirection of funds as “a stealth tariff on consumer spending,” noting that it reflects money consumers might otherwise have used on discretionary purchases.

In late September 2024, Hurricane Helene slammed into Florida’s panhandle, setting records as the strongest storm to ever reach that region. Hurricane Milton followed just a few days later.

Together, these two events inflicted $113bn in losses, according to the US National Oceanic and Atmospheric Administration. January’s massive wildfires in Los Angeles added another $65bn in destruction to the national tally, said the report.

The recently released report, The Climate Economy: 2025 Outlook, aggregates data from numerous public databases and sources to paint a broader picture of global disaster-related outlays – which have amounted to $18.5 trillion since 2000.

It’s “a stealth tariff on consumer spending,” said the analysts.

 In the US, the main contributors to rising climate costs include increasing insurance premiums – which have doubled since 2017 – as well as spending on rebuilding, and emergency financial support from the government.

In total, expenses from climate-driven disruptions – including storm damage, power failures, uninsured property loss and insurance rate hikes – have accounted for $7.7 trillion in economic activity, making up roughly 36% of GDP expansion since the turn of the century.

These burdens come not only from intensifying weather patterns caused by climate change but also from development practices that often neglect long-term resilience.

Andrew John Stevenson, senior analyst at Bloomberg Intelligence, tracked a group of 100 businesses across sectors like insurance, construction, retail and materials that have seen gains as a result of this spending surge. Over the past three years, this group outpaced the S&P index by an average of 7% annually, reported Bloomberg.

Stevenson and Eric Kane, Bloomberg Intelligence’s director of ESG research, described insurance as “a hidden burden of the climate economy.” They reported that in 2023, premium rates jumped by up to 22%, with another increase exceeding 6% projected for the current year.

Since these expenses are not factored into the Consumer Price Index, actual spending on housing – officially listed at about 35.5% – could in reality surpass 40%.

Government funding once covered about one-third of the nation’s climate-related financial needs, encompassing both risk reduction and recovery. That figure has dropped to just around 2% in recent years.

With fiscal freezes and potential cuts looming, advocated by President Donald Trump, future federal contributions may dwindle further. As a result, local governments could be forced to rely on issuing bonds – a solution the analysts warn may be unworkable for areas already under economic strain.

“Bond markets aren’t big enough to fill the gap left by a federal pullback,” the report concluded, said Bloomberg.