The recent headline, “State Farm discontinuing 72,000 home policies in California,” highlights the increasing and unavoidable costs of climate change and is a cautionary tale for property owners everywhere, especially in Hawaii.

Big financial risks come with climate-related disasters, which are happening with increasing frequency and intensity. The risks are especially being felt in the real estate sector. Desirable environments for property ownership, like coastal and wooded areas, are now at high risk for natural disasters that insurance companies won’t cover. Wildfire-prone areas in the Western U.S. and hurricane and flood-prone areas in the Southeast are now experiencing property insurance coverage challenges — rising premiums and cancellations. This has important economic implications for society:

>> Financial strain on households and businesses, which bear the full impact of the damage caused by climate disasters. This especially impacts low- to moderate-income households, who stand to suffer most from high or absent insurance coverage for properties located in climate-vulnerable areas and who are unable to cover the costs of a disaster.

>> Negative impact on the real estate market with downward pressure on property values and the availability of financing.

>> Increased taxpayer burden to address emergency relief, recovery and infrastructure repair.

>> Suppressed economic growth as businesses and households migrate away from high-risk areas, and climate consequences negatively impact industries like tourism.

Clearly, more must be done to address global warming and its underlying cause — carbon emissions — to avoid even more egregious socioeconomic impacts of climate change. Climate-change-fueled hurricanes, storm surges, sunny day flooding, catastrophic fires and long periods of drought will only increase if Congress and state legislatures fail to enact legislation that will reduce emissions effectively.

A key emissions reduction policy is carbon cashback. This carbon pricing strategy involves a predictably increasing price on carbon pollution, a proven way to create economy-wide pressure to reduce the combustion of fossil fuels. By charging more for activities that generate carbon dioxide, carbon pricing increases the cost of polluting. This encourages individuals and businesses to reduce emissions by using less energy, transitioning to renewable energy sources, or developing innovative low-carbon technologies. This also motivates builders and property owners to invest in eco-friendly, energy-efficient buildings, reducing their carbon footprint.

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The cashback component of the policy allows households, particularly those with low-moderate incomes, to adapt to the expected cost of fuel and electricity. (They would benefit even more if they shifted to lower-carbon appliances, transportation, and services.)

By reducing global warming emissions, we can eventually reduce the intensity and frequency of floods, wildfires, and storms that threaten valuable property. Thus, carbon pricing indirectly will help stabilize real estate in disaster-prone areas and keep homes in climate-vulnerable places insurable.

Importantly, carbon pricing will signal the need for investments that will enable resiliency and allow homes and buildings to withstand the impacts of climate change. Investments in infrastructure — flood control, seawalls, wildfire detection and mitigation — and disaster-resistant structures are costly but would allow more properties to be insurable.

Thankfully, our members of Congress — U.S. Sens. Mazie Hirono and Brian Schatz, and U.S. Reps. Ed Case and Jill Tokuda — are climate champions. However, we need their help to work with their colleagues to urgently reduce global warming emissions to avoid even more egregious climate-fueled disasters. We must pass a national carbon pricing policy and lean on our congressional delegation to help enable this. We also ask that our state leaders support local carbon cashback to inspire national policy.

Noel Morin is a climate, sustainability and resilience advocate based in Hilo; Paul Bernstein is an economist with University of Hawaii-Manoa.