Researcher calls report on economic impacts of US climate change 'like a flashlight at night'

Jun 25, 2014 by Kathleen Maclay
The graphic above indicates the estimated annual economic damages due to climate change in six key sectors of the United States economy.

UC Berkeley, economist and assistant professor of public policy Solomon Hsiang led the econometrics team that helped assemble a major report released today (Tuesday, June 24) that projects significant economic risks from climate change in the United States.

The first data-driven national study to provide local estimates for economic risks to key economic sectors found that:

  • The hardest-hit areas will include heavily-used and increasingly expensive energy sources.
  • Labor productivity will also be hard hit as workers are sapped by the heat.
  • Infrastructure damage from rising sea levels will surge when combined with hurricane storms.
  • There is a roughly 50 percent chance that by conducting business-as-usual in terms of climate action, the nation's climate-related mortality rates will rise to 1 to 3 times that of the motor vehicle mortality rate.

"Hard-nosed risk analysis"

While some findings sound sensational, the report itself is careful to present a balanced picture, said Hsiang, who called it "a hard-nosed risk analysis, produced as if the U.S. were run like a firm."

"We're not forecasting the collapse of the United States economy or civilization," he said. "Some populations even benefit. But overall, the impacts of climate change are substantial, with clear risks."

The economic value of impacts on crime and agriculture, mainly driven by extreme temperatures, appear to be comparable to one another, according to the study, although the total valuations of these impacts are lower than in other sectors.

Researcher calls report on economic impacts of US climate change ‘like a flashlight at night’
The maps above reflect what researchers forecast to be the relative change in mortality rates in percentages, due to climate change through the end of the century.

Regional differences

The report is the first to evaluate economic impacts in multiple sectors down to the county level, allowing decision-makers to understand how different regions will be affected by climate change.

Overall, the researchers found that states in the South, Midwest and Great Plains bear the largest economic burden from climate change, while a handful of states, like Oregon and Washington, are likely to benefit economically from climate change.

Previous reports tended to blur these different effects across the country, reporting only national average impacts that make the economics of climate seem rosier than they actually are, said Hsiang. For example, he noted that the report estimates that there is a 2-in-3 chance that by the end of the century, Florida will suffer annual losses worth roughly 10-23 percent of the state's entire Gross Domestic Product.

Climate change and income inequality

"If you average over the entire country," Hsiang explained, "you get a picture that is backward, because damages sound smaller. But we know from observing people's normal behavior as well as lab experiments that they dislike inequality," which means they are actually willing to spend resources to avoid exacerbating economic inequalities. The report finds that national patterns of income inequality are reinforced by climate change, because poor states tend to be more impacted than rich states.

The findings of the "American Climate Prospectus: Economics Risks in the United States" are summarized in a policy document issued today by the Risky Business initiative, established to explore the issue and led by former New York City Mayor Michael Bloomberg, former hedge-fund manager Tom Steyer and former U.S. Treasury Secretary Henry Paulsen.

Hsiang previewed some of the report's scientific innovations in April during his keynote lecture at the nation's largest meeting of climate-related insurers and reinsurers in Washington, D.C., but none of the study's findings were made public until today.

"Stern Review" for the U.S.

The report is considered to be comparable to the "Stern Review on the Economics of Climate Change," a game-changing, 700-page analysis that was produced in 2006 for the British government by economist Lord Nicholas Stern, a distinguished professor at the London School of Economics. Stern called for early and strong action to deal with climate change. Stern's report was largely theoretical, in sharp contrast to the data-heavy American Climate Prospectus released today.

The latest study was co-led by Hsiang, Rutgers University professor and climate scientist Robert Kopp and Trevor Houser of the Rhodium Group, a private research firm. Working on the econometrics team with Hsiang were Columbia University doctoral candidates Amir Jina and James Rising. Jina was a visiting researcher at the Richard and Rhoda Goldman School of Public Policy at UC Berkeley while working on the project.

Focusing resources

Hsiang said he hopes the study will help Americans understand the economic consequences of climate change at a local level, spur rational dialogue about the concrete impacts of climate change and help policymakers make more informed decisions about the many facets of policy.

"By seeing where are big or small helps us focus our business and resources efficiently," said Jina.

The study drew from the decades of , then integrated that work with the latest econometric analyses to develop empirical, data-driven results. Rising explained that improvements in computational power and other methodological advances made it possible to deal with the terrabytes of data he used in the analysis, something that would have been impossible just a few years ago.

"Our actions today are shaping our nation's economic future," said Hsiang, "This analysis is like a flashlight at night: it lets us see what's up ahead."

Explore further: Report sees hefty cost of climate change on US economy

More information: The prospectus is available online: rhg.com/reports/climate-prospectus

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howhot2
3.7 / 5 (6) Jun 26, 2014
This is one of those more interesting studies that takes business risk analysis and looks at the global warming and does what deniers refuse to do; it asks WHAT IF.

Deniers can keep denying but be it a carbon tax, higher fuel bills, more hot and humid days they all have consequences on the economy, and on peoples economic condition.

ubavontuba
1.5 / 5 (8) Jun 26, 2014
This report is completely inept, and laughable. This one: "•Labor productivity will also be hard hit as workers are sapped by the heat." ...in particular.

Maybe they think people who work in heat soaked states are unproductive? Maybe they missed the harsh downturn in the economy due to last winter's bitter cold?

What a bunch of buffoons.

cantdrive85
1.9 / 5 (9) Jun 26, 2014
Maybe they think people who work in heat soaked states are unproductive? Maybe they missed the harsh downturn in the economy due to last winter's bitter cold?

That's because of global warming too, everything negative is due to global warming. Tired workers, cars overheating, potholes, higher taxes, extreme weather, polar bears, economic slowdowns, death, inequality, famine, drought, 700 page analyses, to name just a few.
ubavontuba
1.5 / 5 (8) Jun 26, 2014
Maybe they think people who work in heat soaked states are unproductive? Maybe they missed the harsh downturn in the economy due to last winter's bitter cold?

That's because of global warming too, everything negative is due to global warming. Tired workers, cars overheating, potholes, higher taxes, extreme weather, polar bears, economic slowdowns, death, inequality, famine, drought, 700 page analyses, to name just a few.
Thanks cantdrive85, I needed a good laugh.

cantdrive85
1.6 / 5 (7) Jun 26, 2014
Maybe they think people who work in heat soaked states are unproductive? Maybe they missed the harsh downturn in the economy due to last winter's bitter cold?

That's because of global warming too, everything negative is due to global warming. Tired workers, cars overheating, potholes, higher taxes, extreme weather, polar bears, economic slowdowns, death, inequality, famine, drought, 700 page analyses, to name just a few.
Thanks cantdrive85, I needed a good laugh.


Polar Bears!
howhot2
4 / 5 (8) Jun 26, 2014
Deniers are such wieners. @Ubatuba and @Cantdrive you just can't figure out what global warming is and how it is going to impact your life. Certainly you recognize that this past May was the hottest May ever recorded globally. Certainly you see an additional 100 million tons of CO2 forced into the lower atmosphere daily! Certainly you see the droughts that have stricken states and created tinder box's of scrub land. Etc, Etc, Etc. Certainly your not as stupid as your posts are.

Oh, wait, this is Ubatuba and cantdrive; never mind.
cantdrive85
2 / 5 (8) Jun 26, 2014
Deniers are such wieners. @Ubatuba and @Cantdrive you just can't figure out what global warming is and how it is going to impact your life. Certainly you recognize that this past May was the hottest May ever recorded globally. Certainly you see an additional 100 million tons of CO2 forced into the lower atmosphere daily! Certainly you see the droughts that have stricken states and created tinder box's of scrub land. Etc, Etc, Etc. Certainly your not as stupid as your posts are.

Oh, wait, this is Ubatuba and cantdrive; never mind.

Great, thanks. Some more we can add to the list...Smokey Bear, check... Lower atmosphere, check...
aksdad
2.1 / 5 (7) Jun 26, 2014
Their projections are based on inaccurate global climate models. When you start your computations with erroneous assumptions, your conclusions are also erroneous.

Virtually all of the global climate models overstate climate sensitivity to carbon dioxide. They were tuned to match global temperatures over a certain time frame up to a couple decades ago, with atmospheric carbon dioxide postulated as the primary driver of warming, but as more time passes, their estimates diverge significantly from actual measurements. Have a look at what IPCC AR5, supposedly the most recent and complete report on global warming, shows concerning the accuracy of the global climate models:

http://www.climat...g1-4.jpg

The global climate models have no skill at predicting likely ranges of temperatures in the future yet they continue to be used as the basis of studies like these.
ubavontuba
1.6 / 5 (7) Jun 26, 2014
@Ubatuba... you just can't figure out what global warming is
I have the definition right here:

"global warming
n.
An increase in the average temperature of the earth's atmosphere, especially a sustained increase sufficient to cause climatic change."

Funny thing, the global temperatures are decreasing:

http://www.woodfo....4/trend

and how it is going to impact your life.
Global warming doesn't concern me. What does concern me is the call to mass hysteria from the likes of you.

Certainly you recognize that this past May was the hottest May ever recorded globally.
Actually, no. Lately, the NOAA has repeatedly claimed such and such month the hottest ever, when every other temperature monitoring organization finds otherwise.

Certainly you see an additional 100 million tons of CO2 forced into the lower atmosphere daily!
Yummy fertilizer for my yummy strawberries!

Certainly you see the droughts that have stricken states and created tinder box's of scrub land. Etc, Etc, Etc.
So you think droughts aren't normal occurrences?

aksdad
1 / 5 (6) Jun 26, 2014
...this past May was the hottest May ever recorded globally.

Which means exactly nothing. Single month records are no more meaningful than a single, anomalous powerful hurricane or tornado. It doesn't indicate a trend. Trends are what show that the globe is warming or cooling. If you look more carefully at the NOAA graph, change the timescale to "annual" and the start year to, say, 1970 so you can see the detail more clearly you will notice the maddening fact (to reality deniers) that there has been no statistically significant warming since 1998. That's 16 years of no warming.

http://www.ncdc.n...880-2014

...droughts that have stricken states and created tinder box's of scrub land.

If you only count the southwestern US and ignore the rest of the country which had one of the coldest winters on record. Regional droughts are not global and they're not indicators of global warming. They're routine events.
runrig
4.2 / 5 (5) Jun 28, 2014
Which means exactly nothing. Single month records are no more meaningful than a single, anomalous powerful hurricane or tornado. It doesn't indicate a trend.

Comprehension deficit ...
This last May was part of a rising trend that has been going for ~130 years.
If you only count the southwestern US and ignore the rest of the country which had one of the coldest winters on record. Regional droughts are not global and they're not indicators of global warming. They're routine events.

No my friend ... the US is only 2% of the globe. There is (hard though it seems to be for many on here) a whole planet out there that IS NOT the US.
And NO the contiguous US had a winter barely above average .... and the cold bits only like many routine ones in the '70's for instance.
rhugh1066
2.3 / 5 (3) Jun 29, 2014
I recently heard someone predict that the next big sales pitch for AGW would be economic, since their science has been so publicly shown to be anything but settled. Looks like that someone was correct. Caveat Emptor.
antigoracle
1 / 5 (2) Jul 08, 2014
like a flashlight at night

Followed by a bunch of blind people.

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