For many Americans, climate action begins at the recycling bin. Plastic bottles and paper waste feel like tangible contributions to the planet’s health. But new research suggests the public is consistently misjudging which personal choices matter most for the climate - a misunderstanding that may ripple into the insurance market - and the costs to carriers this year have already been predicted to hit $145 billion by Swiss Re.
A study published by the National Academy of Sciences asked participants to rank the climate impact of everyday actions. The results were striking: people consistently overrated small, visible gestures such as recycling or swapping lightbulbs, while underestimating the heavy toll of more carbon-intensive behaviours.
“People over-assign impact to actually pretty low-impact actions such as recycling, and underestimate the actual carbon impact of behaviors much more carbon intensive, like flying or eating meat,” said Madalina Vlasceanu, a professor of environmental social sciences at Stanford University and co-author of the study.
The analysis found that avoiding flights, not owning a dog and using renewable electricity were the most powerful individual steps - yet these were the least appreciated by participants.
What people could see, such as a bottle tossed into a recycling bin, dominated their perception. “You can see the bottle being recycled. That’s visible. Whereas carbon emissions, that’s invisible to the human eye. So that’s why we don’t associate emissions with flying,” explained Jiaying Zhao to the Associated Press, who teaches psychology and sustainability at the University of British Columbia.
Pets were another unexpected culprit. Dogs, because of their meat-based diets, contribute disproportionately to emissions through the livestock supply chain. “People just don’t associate pets with carbon emissions. That link is not clear in people’s minds,” Zhao said.
Dogs contribute to climate change primarily through the production of their meat-based food, which creates emissions equivalent to about 64 million tons of CO2 annually in the US alone, a figure comparable to the emissions of 13.6 million cars.
For insurers, the significance of this misperception is twofold. First, climate change is reshaping underwriting and claims in property, casualty and even life lines. Yet if households underestimate the actions that drive climate risk, they may also undervalue the protection that insurance provides - or misjudge the exposures they face.
"Underlying risk is increasing continuously with economic and population growth as well as urban sprawl, including in areas vulnerable to natural catastrophes. In addition, climate change effects are playing a role in compounding losses for some weather perils and regions," Swiss Re said in a recent report.
And that risk, is being misjudged by the people who are actually contributing to the problem.
Air travel illustrates the point. A single round-trip flight from New York to Los Angeles produces over 1,300 pounds of carbon dioxide per passenger, according to the International Civil Aviation Organization. That is equivalent to going without a car for three months or eliminating meat from a diet for a year. But the public rarely ranks flying among the most consequential choices.
This disconnect can complicate how insurers frame climate-related risks. Policies on travel, pets or even renewable energy adoption may be seen by clients as peripheral, when in fact they touch on some of the most significant drivers of emissions and risk.
The study also offered reason for optimism: once participants were shown the true rankings of climate actions, they adjusted their priorities. “People do learn from these interventions,” Vlasceanu said. “After learning, they are more willing to commit to actually more impactful actions.”
For insurers, this finding points to a clear opportunity. Brokers and carriers could integrate climate literacy into client conversations - whether through risk advisories, renewal reviews, or educational campaigns. Correcting misconceptions does not just build goodwill; it could steer households towards behaviors that reduce both emissions and long-term insured losses.
Brenda Ekwurzel, a climate scientist with the Union of Concerned Scientists, told the Associated Press that misinformation has long muddied public understanding. “There has been a lot of deliberate confusion out there to support policies that are really out of date,” she said.
For the industry, clarity is more than a public good: it is part of maintaining market stability in the face of rising climate claims. If clients and communities focus only on the visible, low-impact gestures, the underlying exposures - from flood risk to supply chain disruption - remain underappreciated and underprepared for.
The study underscores a truth insurers already know: climate risk is not always where the public thinks it is. For underwriters, brokers and claims professionals, helping clients see beyond the recycling bin may become as vital as the cover they provide.
