Global warming is coming for your home

Think about the places vulnerable to climate change, and you might picture rice paddies in Bangladesh or low-lying islands in the Pacific. But another, more surprising answer ought to be your own house. About a tenth of the world’s residential property by value is under threat from global warming—including many houses that are nowhere near the coast. From tornadoes battering midwestern American suburbs to tennis-ball-size hailstones smashing the roofs of Italian villas, the severe weather brought about by greenhouse-gas emissions is shaking the foundations of the world’s most important asset class.

The potential costs stem from policies designed to reduce the emissions of houses as well as from climate-related damage. They are enormous. By one estimate, climate change and the fight against it could wipe out 9% of the value of the world’s housing by 2050—which amounts to $25trn, not much less than America’s annual gDP. It is a huge bill hanging over people’s lives and the global financial system. And it looks destined to trigger an almighty fight over who should pay up.