26 June 2014 — The US economy will face widespread disruption from climate change unless immediate action is taken, according to a new report, with up to $106 billion in property likely to be underwater by 2050 if mitigation and adaptation measures aren’t taken.
The report, Risky Business: The Economic Risks of Climate Change in the United States, has come out of the Risky Business Project, a joint initiative of former New York City Mayor Michael Bloomberg, former Treasury Secretary Henry Paulson and former senior managing member of Farallon Capital Management Thomas Steyer.
Extreme heat and sea level rise were the two major economic threats from climate change the report found, and they would disproportionately affect certain regions of the US.
The Gulf Coast, Northeast and Southeast of the US could see sea level rise and increased damage from storm surges cause tens of billions of dollars in property losses each year by 2030, with the costs continuing to rise in future decades. The report found that by 2050 between $66 billion and $106 billion worth of existing coastal property would likely be below sea level nationwide, growing to between $238 billion and $507 billion by 2100. There was also a one-in-20 chance that by 2100 more than $701 billion worth of existing coastal property would be below sea level.
In inner states in the Midwest and Southwest, extreme heat could threaten human health, reduce labour productivity and strain electricity grids.
However, the news wasn’t all bad. In colder northern area like North Dakota and Montana, winter temperatures would likely rise, reducing frost events and cold-related deaths, and lengthening the growing season for some crops.
“The Risky Business report shows us that our economy is vulnerable to an overwhelming number of risks from climate change,” Mr Paulson said. “These risks include the potential for significant federal budget liabilities, since many businesses and property owners turn to the federal government as the insurer of last resort.”
Immediate action could avoid most of the worst impacts of climate change, he said, “but the investments we’re making today will determine our economic future.”
Mr Bloomberg said the US was already experiencing tremendous costs from intense storms and heat waves, and it was just the beginning.
“During the next 20 years, we’ll spend tens of billions of dollars preparing for the worst; we should also be doing our utmost to avoid it,” he said. “The real lesson from Risky Business is that an ounce of prevention is worth many pounds of cure.”
Examples of likely impacts of climate change mentioned in the report include:
- Large-scale losses of coastal property and infrastructure
- A 1-in-20 chance that by the end of this century more than $701 billion worth of existing coastal property will be below sea level
- average annual losses from hurricanes and other coastal storms along the Eastern Seaboard and Gulf of Mexico will grow by more than $42 billion due just to sea-level rise alone, while potential changes in hurricane activity could raise this amount to $108 billion
- Property losses from sea-level rise will disproportionately affect the Southeast and Atlantic coasts, where rise is expected to be higher and the losses far greater than other coastal areas
- Extreme heat across the nation, especially in the Southwest, Southeast, and Upper Midwest, threatening labour productivity, human health, and energy systems
- Demand for electricity for airconditioning will surge in those parts of the country facing the most extreme temperature increases, straining regional generation and transmission capacity and driving up costs for consumers
- As extreme heat spreads across the middle of the country, some states in the Southeast, lower Great Plains, and Midwest risk up to a 50 to 70 per cent likely loss in average annual crop yields (corn, soy, cotton, wheat) by the end of the century, absent agricultural adaptation