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Climate Damage Is Already an Economic Line Item—Just Not One We Recognize
By Ian Brusewitz and Valerie Gardner
Over just the past 12 months, the US has spent nearly $1 trillion on climate-related disaster recovery and infrastructure damage. That’s 3% of GDP — money that could have gone toward innovation, productivity, benefits, or debt reduction. Instead, it's being rerouted into extreme weather damage cleanup, reconstruction, and emergency response. According to Bloomberg Intelligence, this surge in climate-related spending has effectively become a "stealth tariff" on Americans: a hidden cost that shows up not as a line item, but in the form of higher prices, larger insurance premiums, and government spending that collectively erode household budgets and wealth without being labeled for what it is. The conversation around climate change often centers on long-term risk — but the reality is that US citizens are already paying an average of almost $3,000 annually towards covering the costs of our worsening climate, even if these costs are not specifically identified as such.
This economic burden isn’t theoretical — it’s already bleeding into the real economy in visible, destabilizing ways. Climate-related costs are no longer confined to isolated events or specific regions. Climate change is indifferent to boundaries, and its financial impacts are bleeding into housing markets, food systems, labor dynamics, consumer prices, and state and federal budgets. As these disruptions grow more frequent and severe, as last evidenced by the devastating fires in Los Angeles and deadly flash floods in Texas — no sector, geography, demographic, or business is immune. This suggests that as the capital allocations necessary for climate recovery grow, the environmental risks bleed increasingly into financial risks. Not only are our physical assets vulnerable, but so are our financial assets. This then raises the stakes of where and how to invest.
Insurance and Public Safety Nets Are Starting to Fray
As the economic footprint of climate disruption expands, the institutions we’ve historically relied on to manage risk are showing cracks. Insurance is becoming a visible point of failure in that equation. In 2024, Hurricane Helene hit Florida as the strongest storm ever recorded in the state’s Panhandle. Days later, Hurricane Milton followed. Combined, the two storms caused $113 billion in damage. Then came the devastating California wildfires in January 2025, burning through L.A. suburbs, which added another $65 billion to the total. The LA Times has since estimated total fire damage could exceed $250 billion, making it one of the costliest fire seasons in U.S. history. And, most recently, the devastating Texas floods — with damage estimated at upward of $22 billion — don't even account for the tragic loss of life from these events.
Historically, the federal government covered about one-third of climate-related disaster costs. That share has since dropped to around 2%, leaving municipalities and states to issue debt or delay recovery projects, and shifting more of the burden onto insurers and property owners. In 2023, insurers covered approximately 70% of the $114 billion in U.S. climate-related losses, according to the Congressional Budget Office. Because of rising costs, insurance premiums have doubled since 2017, including a 22% spike in 2023 alone. These increases aren’t reflected in the Consumer Price Index, which means that what we’re calling "inflation" may actually be something distinctly different. The question we can ask is whether or not people would make different choices if these embedded costs were more clearly labeled as a "Fossil Fuel Waste Damage Premium" or something similar. This lack of clarity and failure to accurately attribute these rising costs to what we think of as cheap fossil fuels means that we understate the full costs and consequences of our use of these fuels.
The "Tragedy of the Horizons" Issue
In 2015, former Bank of England Governor Mark Carney coined the phrase "Tragedy of the Horizons" to describe the problem that results from the fact that people want what's cheap for them today and are unwilling to pay more for something even if it is better for them or their children in the future. The same problem exists at every level in the investment world: financial actors operate on quarterly cycles, while climate impacts unfold over years or decades. This mismatch between how we invest today versus what we need for tomorrow means markets routinely discount the long-term consequences of inaction, prioritizing short-term returns over long-term stability, even when instability is well predicted. The result of this short-term orientation is a structural disconnect that undercuts our ability to invest in climate action and solutions, so as to limit the long-term damage we will inevitably have to pay for, before it gets really bad.
A decade later, this structural blind spot surrounding investing in climate solutions persists. At a recent Financial Stability Board meeting, a U.S. Treasury official dismissed climate concerns unless they posed an "imminent" financial risk. But that logic depends upon people not recognizing the growing annual Fossil Fuel Waste Damage Premium that they are already paying. In addition to revealing an utter failure to understand the real-world progression of climate impacts and looming tipping points, which are beyond "imminent," they are being expressed with disasters everywhere, even if these costs are economically masked and not clearly identified as climate costs. This disconnect is one of the clearest reasons capital hasn’t shifted meaningfully towards investing in the technologies that can enable the energy transition to the extent that we should. So long as people don't realize how expensive climate inaction actually is, human nature tragically rewards inertia, which means that both the damage done in the interim and the costs of solving climate change will continue to rise.
We’re Still Underestimating the Real Costs
Surveys from Yale’s Climate Change in the American Mind series show rising concern among Americans about climate change. Yet, far fewer people connect climate change directly to the rising costs of food, insurance, consumer products, or energy prices. This perception gap matters. When the public doesn’t see their rising costs as climate-driven, there’s less support for regional climate mitigation efforts, long-term adaptation investments, or even innovative clean energy investments that can help accelerate the energy transition, reduce the impacts of future extreme weather events, a hedge the rising climate risks to their overall portfolio.
While consumer awareness lags, markets have begun to price in climate risks. Bloomberg tracks a basket of 100 companies in insurance, infrastructure, and disaster response that have outperformed the S&P 500 by 7% annually. Capital is adapting faster than federal policy — and faster than public awareness. This divergence captures a core tension. While markets have begun reallocating capital toward climate adaptation — outpacing both federal policy and public awareness — the broader system still treats climate disruption as a distant risk, even though the costs are already embedded in household budgets increasingly squeezed by insurance premiums, rising costs, and disaster recovery bills not covered by insurance or the government. Climate impacts and costs are no longer theoretical or negligible. They are already large, compounding, and for many households, causing significant budgetary pain. And yet, despite the mounting data, policy and public sentiment lag. Yet, there is very little recognition of how these climate costs are escalating or communication to the public about the real price of our government's climate ignorance and inaction.
A Smarter Way Forward
The trillion-dollar annual cost of climate inaction isn’t a projection — it’s already here. It reflects not just extreme weather, but the fallout from underbuilt systems and delayed clean energy investment. We haven’t invested adequately in low-carbon technologies that can reduce and eliminate carbon emissions at scale and possibly even begin to repair the damage that has already been done to the climate. Investments lagged because investors doubted the need for these technologies as well as their commercial viability. Clean energy technologies that were seen as more expensive than fossil fuels were deemed less competitive in today's market and hence, not a good investment. But if we begin to factor in today's Fossil Fuel Waste Damage Premium plus the growing costs of not having those technologies — namely the ever-escalating costs of climate damage — then these clean energy solutions really start to seem attractive.
This is where next-generation nuclear becomes decisively appealing. Not only does it deliver clean, dense, reliable, and dispatchable power — but it generates power (and so earns money) without relying on the weather or being vulnerable to it, which is a growing risk to renewables projects reliant on the weather cooperating. As both a hedge against the systemic economic risks of climate disruption and as a source of long-term returns and near-term risk reduction, nuclear power offers a uniquely strategic return. If the Fossil Fuel Waste Damage Premium is now a recurring cost, the only rational move is to invest in the most scalable solutions that cut exposure to climate risk, preserve economic value, and secure a livable future.
References:
Bloomberg, “US Spending on Climate Damage Nears $1 Trillion Per Year,” by Eric Roston, June 17, 2025.
Bloomberg, “Carney’s Risk Warning Reverberates as Global Regulators Disagree Over Climate,” by Alastair Marsh, June 19, 2025.
Congressional Budget Office, “Federal Insurance and Disaster Spending”, September 2023.
Los Angeles Times, “Estimated Cost of Fire Damage Balloons to More Than $250 Billion”, by Sammy Roth, January 24, 2025.
MSN, “Texas Flood Damage to Homes May Cost Up to $22B”, by Michael Walrath, May 2025.
Nature, “Warming Accelerates Global Drought Severity,” by Solomon H. Gebrechorkos et al., June 4, 2025.
NOAA, “Billion-Dollar Weather and Climate Disasters”, 2024 Report.
Yale Program on Climate Change Communication, “Climate Change in the American Mind: Beliefs & Attitudes”, Fall 2024.
Published by Nucleation Capital in Advanced Nuclear, Capital reallocation, Carbon emissions, Climate change, Climate Costs, Climate mayhem, Climate policy, Energy transition, Extreme weather, Fission, Fossil fuels, Future of Energy, Global emissions, Government support, NEWS, Nuclear competitiveness, Nuclear financing, Nuclear innovation, Solving climate, Venture capital support for nuclear
She wants what's best for you . . .
Moms protect their children. For better or worse, she does what she thinks best, given her means. She sees to our needs, supports us when we struggle and helps us develop into self-reliant adults, often at great personal sacrifice.
But we are now at a critical junction in human history, perhaps one of the most crucial moments that will determine our trajectory. Our moms, for all their superpowers, may not fully recognize the new threat we face—because it is entirely invisible.
CO2, the waste emission created by our growing energy usage, is both colorless and odorless. Yet, it is impacting our future. Unlike with most types of toxic emissions that contribute to smog, moms can't see that the emissions from powering things we love—cars, boats, planes, televisions, computers, refridgerators, washing machines, phones, the Internet, websites and especially our homes—has filled our atmosphere with large molecules that serve to turn the heat up on the planet.
Can moms adapt to defending us from the risks posed by climate change?
For eons, moms have been perfectly evolved to meet their primary job qualifications: to provide for her child's physical and psychological safety. For as long as we have had recorded history, moms' love has helped populations thrive. But things have changed dramatically. Humanity, empowered with technologies unimaginable mere decades ago, are causing profound changes to our climate and ecosystems for the worse. Weather patterns are changing. Days are hotter and there are more of them. Trees flower earlier in the season. There is less and less rain, more severe droughts and forest fires. Areas that could once be farmed, can no longer grow crops. Fish populations that fed millions have declined. Bees, bats and insects are disappearing. Hurricanes and tornadoes arrive more frequently and fiercely. How can moms defend their children from a heating planet and all of its related effects? The job of protecting children from these climate threats is not straight-forward and may seem quite impossible, yet there are important things moms can and should do.
Focus on root causes and support an effective energy transition.
Many moms are already concerned about climate and fighting back. She may be planting trees, using less paper, fussing to close lights and turning down the heat. She's also probably recycling, refusing plastic straws and plastic bags and composting. Moms with excess resources are likely donating to stem deforestation, habitat loss and species extinction. She may even opt to invest in ESG and impact-focused funds. While laudable, none of these activities directly target the cause of the problem and so are not a good use of moms' time, talents or resources.
Mom, like the rest of us, must focus on the root cause of climate change. Which is the CO2 emissions from humanity's collective burning of over 100 million gallons of oil per day, 25 million tons of coal and a comparable amount of natural gas each day. It is these daily energy choices that generate over 100 million tonnes of CO2 emissions waste daily and over 40 billion tonnes annually—an enormous amount that goes almost entirely into the atmosphere, which further heats the planet. This is the real problem and the only way to lessen the threat we're facing is to transition away from carbon-emitting fossil fuels to other types of energy that don't emit CO2.
The good news: Over 200 countries agreed that transitioning away from fossil fuels is a global imperative. In late 2023, world leaders met in Abu Dhabi, Dubai at COP 28 and specifically agreed on this. It won't surprise Mom at all that it took all 28 of these week-long annual "Conference of the Parties" gatherings to arrive at this generic agreement. It was every bit as difficult as getting a child to agree to clean up his room. But they got it done at last. Some thirty countries committed to triple the amount of nuclear they use. Others committed to increasing their wind and solar. As hard as it was to arrive at this agreement, there's still much disagreement over how to effect this transition and over what period of time.
The bad news: While there's been considerable progress building out wind and solar, these technologies haven't lived up to the hype that they can solve the problem. Everyone hoped they would and, yes, we love getting free energy from the sun and the wind. Sadly, the actual technologies required to capture and convert that natural energy into power are neither free nor efficient. In the "you get what you pay for" department, renewables are cheap but so unreliable that even where they've been fully built out, we still need to burn fossil fuels to meet the 24/7 level of energy demanded by customers. It turns out that our near constant energy demand doesn't pair well with highly intermittent sources like wind and solar. Adding them to the grid has increased costs to end users largely because of the need for significant further expenditures on peaker gas plants and large batteries to try to firm up their very low generation capacity.
What other clean energy options are there?
There aren't many, which is why we need better options. And we need them urgently. Among the options we have are hydro power, geothermal power and nuclear power. Hydro and geothermal power are currently limited to specific geographies, most of which areas are already fully exploited. Traditional grid-scale nuclear is pretty darn good (despite its reputation) but has historically come in a "one-size-fits-all" configuration that can cost billions and take a decade or more to build. Against this backdrop, there's more good news.
Entrepreneurs are working to innovate to make nuclear power smaller, modular and safer. And, best of all, these new advanced designs are on the verge of being commercialized, so adding exciting new energy options that can directly replace smaller coal and gas plants. Meanwhile, they are rapidly becoming the most compelling medium-term solution to our energy problems. Just recently, Google, Amazon, Dow Chemical, Nucor and other large companies have begun to place orders for power from advanced nuclear because they see it as helping them meet both their energy growth and decarbonization goals.
Tech companies have but will Moms go Nuclear to protect their children?
For most of our lives, our moms opposed nuclear power. They feared nuclear bombs and believed that nuclear power plants posed similar risks. The idea that a melt-down accident at a nuclear power plant could explode and contaminate huge swaths of land seemed like an existential threat that had moms everywhere up in arms. Accidents like Three Mile Island, Chernobyl and Fukushima seemed only to prove them right. Protesting moms did their thing and eventually succeeded in preventing new nuclear power plants from being built for most of the last 40 years. At the time, with their then limited understanding of the risks, this seemed like the right thing to do, so it is easy to understand the rationale. But was it?
Now, more than 40 years later, we actually have a much better understanding. And it turns out it was a huge mistake. Had the original plans developed by Presidents Eisenhower and, later, John F. Kennedy to build out a fleet of nuclear power plants to meet all US energy needs succeeded, we would not have a climate catastrophe on our hands. But, because of public opposition, nuclear grew only to be 20% of our electricity needs and then its growth was halted.
In its place, the fossil fuel industry was allowed to grow unchecked, vastly accelerating CO2 emissions and turning global warming into a full blown catastrophe. We've already seen 1.5 degrees C (2.7 degrees F) of confirmed warming and there much more to come, as more emissions are added to the existing molecular blanket trapping solar radiation and heating the planet. It is as bad for the health of our planet as it would be if your child had a fever of 102.7 that just continued rising.
While the worst impacts of our use of fossil fuels may still be a ways off, even the current level poses an existential risk to humanity. We are failing to meet our initial goal of reducing emissions by 50% by 2030, which is five years away and emissions have not declined at all. Not solving this problem by greatly reducing our level of emissions is causing tremendous psychological stress in younger generations. This is why moms everywhere need to act and fast. They need to show their children that they are doing what it takes, which requires thinking outside the box and being willing to do things we may not be comfortable with.
Next-generation nuclear is the disruptive, scalable solution we need.
Things seem bad right now. The Trump Administration is in denial about climate change and the very topic of climate change has become terribly polarized. Progressives want to end fossil fuel use but demand that we replace it with renewables, which clearly aren't up to the job. Conservatives are rightly worried about rising energy prices and energy reliability and love nuclear but they've shown little concern about addressing climate. While thsese differences cause political dysfunction, there is considerable bipartisan agreement about the need to accelerate advanced nuclear. Somehow, between climate doom and climate denial, both sides for vastly different reasons, agree on the importance of accelerating next-generation nuclear.
This bipartisan support is not new It started with the Obama Administration, which set the stage to support nuclear innovation. Thereafter, the first Trump Administration signed several pieces of legislation passed by the Congress aimed at accelerating the commercialization of next-generation nuclear. Then, in the lead-up to the IRA, President Biden signed the Infrastructure Investment & Jobs Act, which set up the Civil Nuclear Credit Program, with funding to help prevent the premature closure of nuclear power plants. Governor Newsom used these funds to help save Diablo Canyon. The IRA provided further support for nuclear by levelling the playing field and allowing nuclear power to qualify for the same clean energy tax benefits that wind and solar could. Biden also signed the ADVANCE Act, which accelerates the commercialization of nuclear with a series of reforms of the Nuclear Regulatory Commission, its mission and its process.
In each instance, Congress supported efforts to accelerate the commercialization of next-generation with huge bipartisan majorities, and often just a few nay votes. This shows just how much attitudes have changed around nuclear energy, which has one of the lowest carbon intensities—so is a top solution to climate change—while at the same time, providing energy security, job creation and national security. At the moment, although the Trump Administration has shown no interest in supporting climate goals, the DOE recently re-issued a $900 million funding solicitation left over from the Biden era for advanced nuclear. Nuclear energy is the middle ground we need to solve climate.
Mom will likely be thrilled to support a true climate solution
Supporting the growth of advanced nuclear energy is the ideal pathway for those seeking to solve climate change. Next-gen nuclear is already in demand by tech hyperscalers and others seeking clean and reliable sources of energy. The innovations underway are working to make these new designs safer, cheaper and easier to deploy. The whole nuclear industry is hard at work increasing capacity factors, improving materials, fabricating safer fuels, making operations more efficient and training workers. This makes it the perfect time to invest into these ventures, so that new designs can finally get to market and energy buyers can begin to displace fossil fuels.
A pregnant Maddy Hilly standing next to a dry cask storage tank holding nuclear waste.
So, for Mother's Day, help your mother get caught up with nuclear's incomparable safety record. Explain the many amazing benefits of nuclear. Show her that nuclear helps reduce ecologic impacts and cleans the air. Clarify why concerns about nuclear waste are a political red herring, since nuclear's waste is already safely stored on site—as shown by Maddy Hilly at the INL—hurting no one and definitely not causing climate change, in stark contrast to fossil fuel waste, which pollutes the air, contributes to millions of premature deaths annually and causes our slow-moving global climate disaster.
Help your Mom go Nuclear on Mother's Day
Help mom become one of the growing numbers of women supporting nuclear. Introduce her to groups like Mothers for Nuclear, and show her how working mothers have launched pronuclear non-profits and permeated the nuclear industry because of their concerns about climate change. It doesn't take a mom to recognize that fossil fuels are well past their "Sell by" dates and need to go! But before that transition can happen, there has to be a much better way to generate reliable energy. That's next-generation nuclear power and why it is so important to get these technologies to market as fast as possible.
Mom will appreciate learning about next-gen nuclear and the many ways that she can help, whether by joining or supporting an organization like Mothers for Nuclear, investing into this sector and funding the companies developing innovative solutions or just by talking to her friends about nuclear power—it will all help. Almost nothing else she can do will be as effective at the global scale. But helping next-generation nuclear succeed can have a direct future impact on reducing carbon emissions.
She already loves you forever. You can now help her do her job to protect your future.
Happy Mother's Day from the Nucleation team!
Thank you for reading this. Love of our children and deep appreciation of what nuclear offers humanity is why we have worked to build the first venture fund that invest in advanced nuclear and deep decarbonization innovations. Nucleation's Fund I is in its fourth year and still accepting new accredited investors every quarter. We have made it easy and affordable. If you or your mom subscribe between Mother's Day and May 30th, 2025 and reference this Mother's Day post, we will send you your choice of a Nucleation Capital T-shirt, vest or baseball cap. Learn more and subscribe here.
Published by Valerie Gardner in Advanced Nuclear, Air pollution, Carbon emissions, Climate change, Energy abundance, Energy transition, Extreme weather, Fission, Fossil fuel mortality, Fossil fuels, NEWS, Nuclear innovation, Nucleation communications, Pro-nuclear campaign, Solving climate, US technological leadership
Nucleation Capital Completes its Third Year!
Issues a report on the growing demand, the status of Nucleation Fund I, plans for Fund II and portfolio updates
Nucleation issued its Three Year Report to all Limited Partners (LPs) of the fund in mid-October, following the completion of three full years of investing at the end of Q2-2024.
The report covered the state of the current market, with the recent slate of high-profile power purchase announcements, a review of recent major nuclear purchase announcements by major technology companies, as well as a run-down of key events of the prior three years heralding the current inflection point in the market. Additionally, Nucleation provided its assessment of what is coming down the pipeline for investors in both energy and carbon management demand.
The report further shared more details about Nucleation's plans and strategies for its three year-old evergreen Fund I and for its upcoming, traditional Fund II. Lastly, Nucleation provided detailed and confidential updates on the progress made and current status of each of its twelve Fund I portfolio ventures.
REQUEST A COPY
If you are interested in learning more about either Fund I, our low-cost evergreen fund, now in its fourth year, or our upcoming traditional Fund II, click here to request a copy of our Three Year Report Overview.
Published by Valerie Gardner in Advanced Nuclear, Advanced Nuclear Customers, Carbon emissions, Carbon markets, Climate change, Climate innovation fund, Corporate decarbonization, Energy abundance, Energy transition, Fission, Future of Energy, Investor activity, NEWS, Nuclear competitiveness, Nuclear innovation, Nucleation communications, Solving climate, Venture capital support for nuclear, Zero emission energy
Nucleation Capital is growing!
Seeking help increasing our syndicate deal flow
The level of activity and new venture formation in the areas of advanced nuclear and deep decarbonization innovation is growing rapidly. Nucleation Capital is seeking to expand our reach and connect with as many of these new ventures as we can. We are thus pleased to invite you to work with us to help us expand our syndicate deal flow and earn a share of our upside syndicate compensation. Here's how it works.
You find and connect with a young, growing venture that fits our thesis. If this venture is actively looking to raise capital and has a fundraising pitch deck, you introduce them to us and we will review their deck. If we agree that it is a promising prospect, you can offer to help them raise capital through our pronuclear investor network and syndicate. If they like that idea and agree to give us an allocation of equity, you will then produce a deal memo and we will float a syndicate to help them raise capital.
When investors agree to participate in the syndicate, they pay no management fee but they agree to pay carried interest to the deal sponsor, which is Nucleation Capital. Depending upon your contribution to creating the deal memo and promoting the SPV, we will provide a fair split of the carried interest fee earned from the successful exit of this venture.
There are two ways that you can work with us to bring us potential deals and earn participation on the success of the ventures you bring:
1. Venture Associate: If you are a young professional keen to learn how to help ventures raise capital with some spare time to devote to meeting new teams and making introductions, we will bring you on as a Venture Associate. You'll get training, guidance on how to find and connect with new ventures, and invitations to participate in due diligence sessions as well as other opportunities to enage with our syndicate team. We'll help you build your skills in this area and show you how to evaluate new ventures.
2. Ventury Ally: Perhaps you are a bit too busy to take on the task of writing deal memos but you are well connected, want to help worthy ventures raise capital and would like to make introductions. We invite you to join our team as a Venture Ally and we will delegate syndicate prep tasks to another member of our team. We would welcome your help connecting us to new teams working in our sectors through simple introductions.
This is an incredible opportunity for those keen to learn the ins and outs of the venture capital industry and for those who are deeply connected into the start-up world to help to help build stronger ventures.
Learn more here about this opportunity to join Nucleation's syndication team.
Published by Valerie Gardner in Advanced Nuclear, Capital reallocation, Carbon emissions, Climate change, Energy abundance, Energy transition, Environmental support for nuclear, Fission, Future of Energy, Investor activity, NEWS, Nuclear competitiveness, Nuclear innovation, Nucleation communications, Solving climate, US competitiveness, US technological leadership, Venture capital support for nuclear, Zero emission energy
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