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The Economic Impacts of Climate Change in the U.S.
• A recent study conducted by the Center for Integrative
Environmental Research finds that economic costs will
be far-reaching and affect all geographic areas of the
nation if nothing is done.
• The CIER research finds that the impact of climate
change events will affect both the natural environment
and existing infrastructure
• Their report reviews several economic studies…
• And relates these to several predicted climate change
impacts.
Source: Matthias Ruth, Dana Coelho, and Daria Karetnikov. A Review and Assessment by the Center for Integrative
Environmental Research (CIER) at the University of Maryland, October 2007. Center for Integrative Environmental
Research, University of Maryland.
Impacts in the U.S.
• Effects experienced across all regions, but the
severity will be “unevenly distributed across regions
and within the economy and society.1”
• It is estimated that for sectors of the economy that
provide essential goods and services, the negative
effects will be significantly greater than the positive.
• The impact of climate change will severely strain
government budgets – local, state and federal.
1Matthias
Ruth, Dana Coelho, and Daria Karetnikov. A Review and Assessment by the Center for Integrative
Environmental Research (CIER) at the University of Maryland, October 2007. Center for Integrative Environmental
Research, University of Maryland
2 Ibid.
• Secondary effects include:
higher prices
reduced income and job losses2
1Matthias
Ruth, Dana Coelho, and Daria Karetnikov. A Review and Assessment by the Center for Integrative
Environmental Research (CIER) at the University of Maryland, October 2007. Center for Integrative Environmental
Research, University of Maryland
What economic Sectors/Industries are expected to
be most directly affected?
1. Agriculture
• In some parts of the nation, growing conditions will
improve as temperatures continue to rise (colder
regions become warmer)
• Other parts of the nation are projected to see
worsening conditions as water resources dwindle,
rainfall becomes more frequent (or infrequent), and
land becomes unsuitable for farming.
• Changes in climate are also associated with an
increase in the spread of pests and plant diseases that
previously would not have had an impact (CIER)
Natural Resources Defense Council. Climate Change Threatens Health,
http://www.nrdc.org/health/climate/drought.asp
Union of Concerned Scientists, 2008, “Rapidly Rising Seas: What the Science Tells Us,”
http://www.ucsusa.org/sites/default/files/legacy/assets/documents/global_warming/Causes-of-Sea-LevelRise.pdf
• A more recent estimate points out that “From 1993 to
2008, the global rate has risen to 0.11 to 0.13 inch per
year,”(Union of Concerned Scientists).
• At this rate – an increase of an average .12 inch per year
– would mean that this 20 inch threshold would not be
reached in 2100; however, if accelerated rates of rising
seas are factored in, it could.
• Many of the CIER study’s cost estimates of climate
change related damage – made ten years ago – are
interestingly quite accurate.
• For instance, the study predicted the cost of and type of
protections that would be needed to protect vulnerable
coastal areas.
Union of Concerned Scientists, 2008, “Rapidly Rising Seas: What the Science Tells Us,”
http://www.ucsusa.org/sites/default/files/legacy/assets/documents/global_warming/Causes-of-Sea-Level-Rise.pdf
Western U.S.: A recent New York Times report1 notes that
the glaciers of Glacier National Park in Montana are rapidly
disappearing, threatening the ecosystem of the Western
U.S. The report notes:
“A century ago, this sweep of mountains on the Canadian
border boasted some 150 ice sheets, many of them scores of
feet thick, plastered across summits and tucked into rocky
fissures high above parabolic valleys. Today, perhaps 25
survive. In 30 years, there may be none”.
• Following the winter thaw, melting ice has provided a
vital source of water for residents and farmers
downstream.
• But as a result of a warming climate, the glaciers are
disappearing.
1Source:
MICHAEL WINES “Climate Change Threatens to Strip the Identity of Glacier National Park.” New York Times,
November 22, 2014.
• …and the peak flow of water from the melting glaciers is
starting much earlier in Spring and ending much too soon
– before crops are ready to be harvested – resulting in
water shortages when demand is at its peak...resulting in
an imbalance in the demand and supply for water.
Agriculture severely impacted. What other affects from this?
• Other sectors of the economy affected?
2. Recreation – ski resorts: “Mountain snow packs are
shrinking. In recent decades, rising winter temperatures
have increasingly changed snows to rain.” Tourism $$ shrink
3. Population: Many densely populated cities & towns south
of glaciers; including a very large number of businesses.
4. Wildlife/ecosystems: as habitats disappear, species die out
or are threatened.
Northeastern U.S.
2. Infrastructure/buildings/transportation systems
especially in coastal areas are highly vulnerable.
• Value of residential and commercial property in
northeast was estimated by CIER to be $4 trillion in
2004; a decade later, this value is clearly more.
• Interestingly, the Center’s analysis in 2004 predicted
the damages from a category 4 hurricane hitting a
major metropolitan area as costing between $50 and
$60 billion in insurance losses.
• The estimated losses to property and businesses from
Hurricane Sandy in 2012 reached an estimated $65
billion.
• The estimated losses to property, businesses and
infrastructure from Hurricane Sandy in 2012:
• Total $65 billion1
• New Jersey: $38.6 billion2
• New York: $32 billion- statewide; $19 billion in New
York City3
• MTA: $4.75 billion in infrastructure losses; $246 million
in lost revenue2.
Predicted losses from sea level rise: The study predicted
(in 2004) a sea level rise in the northeast-mid Atlantic
region of 20 inches by year 2100.
1 USA Today, “Hurricane Sandy, drought cost U.S. $100 billion.” Jan. 25, 2013
2 CNN,
“Hurricane Sandy Fast Facts,” Nov. 5, 2014
3 New York Times, “Hurricane Sandy’s Rising Costs”, November 27, 2012
2. Income loss
• Losses to tourism industries from snow melt; flood;
drought.
• This translates to $millions in lost income to businesses
and workers as jobs once in demand dwindle with weak
business conditions.
• Losses to agricultural industries from lower output.
• Losses to fisheries from depleted species.
• Rising government indebtedness resulting from needs
to invest in rebuilding and repairing damaged
infrastructure.
• Vulnerability of a significant percentage of nation’s
population living in coastal areas to lost jobs and
business resulting from a severe weather event or
disaster
One estimate of how to measure the Economic Costs of climate
change has been developed by public policy researcher
Quantifying the Economic Cost of Climate Change
https://www.youtube.com/watch?v=yNYZJD_llno
https://www.youtube.com/watch?v=-dG2BfpTkxs
(first 10 minutes)
https://www.youtube.com/watch?v=-dG2BfpTkxs
Robin Hahnel on the Political Economy of Climate Change
1. Impact of warming on global economic output
http://news.stanford.edu/news/2015/october/videos/1593.html
2. PBS video on evidence globally: PBS Global Warming The Signs and the Science
https://www.youtube.com/watch?v=xVQnPytgwQ0