The last five years have seen some of the worst wildfires in California’s history. In 2020 alone, the area burned jumped to five times the average annual rate of 1984– 2000. Hundreds have been killed, thousands displaced, and more than ten million acres burned.

The fires have also caused $18.7 billion in property damage. This huge increase in risk has led insurers like State Farm, Farmers, and Allstate to tighten underwriting standards and to restrict new policies. State Farm announced in March of this year that they would not be renewing 72,000 policies in California.

But this is not a problem unique to California. Alera Group, one of the largest insurance brokers in the country, reports:

Escalating impacts of climate change, higher overall costs across markets and other issues have even led major carriers to exit some states. The growing frequency and severity of wildfires, earthquakes, tornadoes, and other natural disasters caused massive losses in recent years.

The growing frequency of extreme weather events is no blip on the radar, it is the direct result of man-made climate change. A 2021 study by the National Oceanic and Atmospheric Association (NOAA) concluded that more than two-thirds of the increase in wildfires was attributable to “human-caused global warming.”

Projections from NOAA show that an average annual temperature increase of 1º Celsius could increase the burned area per year by as much as 600%. / Image: USDA Forest Service, Wikimedia Commons

And the problem shows no sign of stopping. Projections from NOAA show that an average annual temperature increase of 1º Celsius could increase the burned area per year by as much as 600%. In the two decades since 2003, there has been a 154% increase in the number of billion-dollar disasters in the US, and a 257% increase in the cost of said disasters.

Major insurers are also pulling out of states like Arkansas, Minnesota, Colorado, and Oklahoma. Homeowners across the country face rate increases of 10-15%, while people in catastrophe-prone areas can expect to pay as much as 25% more. Homeowners in states like Florida, Louisiana, and Texas are forced to look to non-admitted insurers with rates that could be as much as double their previous costs.

Insurance companies play a specific role in the capitalist financial system. They help insulate the economy from natural disasters and provide a partial safety net for companies and ordinary workers—as long as they pay. So it is only natural that as the climate worsens and the threat of extreme weather grows, insurers are moving to protect their profits. As a result, millions of workers must funnel even more money into the pockets of massive insurance companies, while others must forego coverage altogether.

Analysis by InfluenceMap, an independent think tank focused on the climate crisis, revealed that between 2016 and 2022, 80% of global carbon emissions were produced by just 57 companies. The multinational energy companies care only about profits, not sustainable production, and their representatives in government serve to protect their interests. The working class is forced to foot the bill for the disasters caused by the short-sighted greed of the ruling class.

Under capitalism, it is not possible to make the sweeping reforms necessary to deal with the climate catastrophe. The economy is not run democratically, and it is not planned rationally. A workers’ government would oversee a massive infrastructure overhaul to lessen the impact of climate catastrophes. It would nationalize the oil and gas conglomerates and run them democratically in the public interest.

Any worker facing job loss during the transition away from fossil fuels would be offered paid retraining and an equivalent job elsewhere in the economy. Anyone facing the loss of their home or livelihood would be relocated and helped back on their feet. Through our collective efforts, humanity can overcome the climate crisis—but not on the basis of capitalism.