How much do heat waves cost? Here's what California report found

SAN FRANCISCO (KGO) -- The California Department of Insurance released a new report this month claiming extreme heat events lead to $7.7 billion in losses. The report analyzed heat events from 2013 to 2022.

"Having a number gets people focused on how this invisible silent thing is really costing us money," said Kath Baughman McLeod, the CEO of Climate Resilience for All, and a member of the California Climate Insurance Working Group. "The $7 billion is a base assessment. It might be higher than that."

The report says heat events affect the entire population of California, from the health impact costs over to the economic impact. The report says labor productivity losses ranged between $7.7 million and $210 per event.

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"Heat affects the human body, our health, it slows us down," Baughman McLeod said. "We have worker productivity impacts. You know we make less money when we are slow and make mistakes or get hurt."

Power outages could cost up to $230 million, and infrastructure costs could cost up to $35 million per event.

"Schools are closing, metro systems close down so people aren't getting to work. Food systems are affected, supply chains are effected," she said.

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The report is designed to put a price on these heat waves so policy makes can budget for them in a similar way they budget for natural disasters. Knowing the costs means elected leaders can enact policies to lower the cost.

"This report is just the tip of the spear but such a critical piece of information," Baughman McLeod said. "It is at a critical time for policy makers, investors, everybody trying to understand how are we going to take on extreme heat."

She says the best way to lower the cost is for us to stop being reliant on fossil fuels. She also says leaders need to make necessary infrastructure changes to lower the economic impact.

"We can take this on an win," she said. "No one has to die from extreme heat. This is a very positive agenda. Trees, green space, water features, all of those are cost effective, and you can model those interventions on to that $7 billion."