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article imageReport warns how climate change threatens U.S. economy

By Robert Myles     Jun 27, 2014 in Politics
Washington - The U.S. economy could face major, systemic disruption due to climate change unless legislators and businesses alike take urgent action to reduce climate risk, says a new report released this week.
The human induced threats range from the obvious, such as rising seas and increased damage from storm surges, to more covert ones like the consequential effects on human activity of more frequent bouts of extreme heat.
The report, “Risky Business: The Economic Risks of Climate Change in the United States,” summarizes assessments of how climate change is likely to affect communities at county, state and regional level. Many industries and properties across the nation face profound risks if steps aren't taken to mitigate climate change. On a brighter note, the report says risks at the most severe end of the spectrum could still be prevented through prompt investment being made to make communities more resilient and to reduce the pollution that causes global warming.
The Risky Business Project aimed to produce the best available projections for changes in local climate conditions across the United States and the fiscal impact of such change on key sectors of the U.S. economy. Fundamental to the project’s mission was providing a better understanding of the possible costs of unmitigated climate change, not just to businesses, but also to investors, households and policymakers.
The report demonstrates how two major effects of climate change — sea level rise and extreme heat — will disproportionately affect different US regions, posing highly variable risks depending on location.
Most at risk from sea level rise and/or storm surge, for example, are the U.S. Gulf Coast, Northeast, and Southeast. Rising sea levels coupled with more potent storm surges will likely lead to an additional $2 to $3.5 billion in property losses each year by 2030, says the report. But that’s just the start. The level of such losses would escalate in ensuing decades in the absence of preventative measures.
The threats are different in the interior states of the Midwest and Southwest. In those areas, extreme heat will not only threaten human health but will reduce labor productivity and place an increasing load on electricity grids.
The report concedes that there will be some benefits arising from climate change but these will be highly localised when compared to the widespread detrimental effects. At higher latitudes, winter temperatures will probably rise in states such as North Dakota and Montana. The result would be a reduction in frost events, reduced deaths related to hypothermia and a longer growing season for some crops.
On sea level rise and storm surges
Doing nothing will simply exacerbate costs and damage caused by these factors says the report, predicting:
1. Large scale losses of coastal property and infrastructure. Analysis is provided on a region-by-region basis.
2. By 2050 between $66 and $106 billion worth of existing coastal real estate will likely be below sea level nationwide. A do-nothing approach would see that tally rise to somewhere between $238 and $507 billion by 2100.
3. There’s an outside chance — Risky Business puts the odds at one in twenty — that by the year 2100 more than $701 billion worth of existing coastal property will be below sea level, and that 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 to sea-level rise alone. Potential changes in hurricane activity could raise this amount to $108 billion.
4. The Southeast and Atlantic coasts, where sea level rise is expected to be higher, would bear the brunt of these property losses.
On agriculture
1. Climate change will engender shifting agricultural patterns and crop yields. Likely gains for Northern farmers would be offset by losses in the Midwest and South.
2. In the absence of agriculture adapting to changed circumstances, national commodity crop production (corn, soy, wheat and cotton) could decline by 14 percent by mid-century and up to 42 percent by late 21st century as extreme heat spreads across the middle of the country.
3. In mitigation of such reductions in agricultural output, warmer temperatures and carbon fertilization may improve agricultural productivity and crop yields in the upper Great Plains and other northern states.
4. While accepting that food systems are resilient at a national and global level and recognising that agricultural producers have been adept at facing up to different climatic circumstances in the past, major projected shifts in climate will still hold risks for the individual farming communities most vulnerable to such changes.
On extreme heat
More frequent heat-waves, especially in the Southwest, Southeast, and Upper Midwest, will present a multi-pronged threat to labor productivity, human health, and energy systems.
1. By mid-century, the average American will likely experience 27 to 50 days each year with temperatures exceeding 95°F (35°C). That’s more than three times the average number of >95°F days seen over the past 30 years. By 2100, Americans could be sweltering as they baste for between 45 to 100 additional days each year on average where temperatures are greater than 95°F.
2. Those national average figures disguise regional extremes. In some parts of the US, particularly the Southwest, Southeast, and upper Midwest, residents will experience several months of successive 95°F days each year.
3. More heat means less production. Labor productivity of outdoor workers, such as those engaged in the construction, utility maintenance, landscaping, and agricultural sectors, could fall by as much as 3 percent, particularly in the Southeast.
4. But things will only get worse and workers, instead of being burned out could, literally, be burned up. As the number of extreme heat days increases, the greater the risk of temperatures exceeding the threshold beyond the human body is incapable of maintaining a normal core temperature without air conditioning. During such heat-waves, anyone whose job requires them to work outdoors, as well as anyone lacking access to air conditioning, won’t just face severe health risks, they run the risk of death resulting.
5. Demand for electricity for air conditioning will surge in those US regions facing the most extreme temperature increases. The increased demand will strain regional generating and transmission capacity and drive up costs for consumers. Here we get into the “compound interest” effect of inaction on climate change touched on by Thomas P. Steyer, former Senior Managing Member of Farallon Capital Management, one of the co-producers of the Risky Business report.
By the end of the century  Oregon  Washington  and Idaho could well have more days above 95°F each ...
By the end of the century, Oregon, Washington, and Idaho could well have more days above 95°F each year than there are currently in Texas; babies being born right now in the Southwest could see nearly four additional months of days over 95°F within their lifetimes.
Risky Business - Rhodium Group
Commenting on publication of the report, Steyer stated, “Climate change is nature’s way of charging us compound interest for doing the wrong thing,” adding, “The Risky Business report confirms what many of us have long suspected: The longer we wait to address the growing risks of climate change, the more it will cost us all. From a business perspective, given the many benefits of early action, it would be silly to allow these risks to accumulate to the point where we can no longer manage them.”
Taking the specific threat from extreme heat, Steyer’s analogy with compound interest is spot-on. The report estimates that in the field of energy production, greenhouse gas-driven changes in temperature would likely necessitate the construction of up to 95 gigawatts of new power generation capacity over the next five to 25 years.
That equates, roughly, to a staggering additional 200 average-sized coal or natural gas-fired power plants. Quite apart from the additional costs to residential and commercial ratepayers, which the report puts at up to $12 billion per annum, such a colossal number of extra power plants — needed just to maintain a bearable temperature indoors — would themselves contribute to higher greenhouse gas emissions.
Just as compound interest can trap the unwary in a spiral of debt, so such compounding of carbon emissions cannot be a solution.
As co-producer of the report and former New York City mayor, Michael R. Bloomberg, said at publication, “Damages from storms, flooding, and heat waves are already costing local economies billions of dollars — we saw that firsthand in New York City with Hurricane Sandy. With the oceans rising and the climate changing, the Risky Business report details the costs of inaction in ways that are easy to understand in dollars and cents — and impossible to ignore.”
The Risky Business reports Global emissions scenarios illustrates the compounding effects of inactio...
The Risky Business reports Global emissions scenarios illustrates the compounding effects of inaction on climate change. Research examined the risks of the U.S. continuing on its current path, or "business as usual." Alternate pathways that include investments in adaptation or policy efforts to mitigate climate change through lowering carbon emissions could significantly reduce these risks.
Risky Business - Rhodium Group
Thankfully, it’s not all gloom and doom.
There might not be much that can be done to prevent the deleterious effects of climate change likely to occur between now and 2030, these being due largely to past emissions and being less avoidable. But further out, the Risky Business Project found that early action to reduce greenhouse gas pollution can substantially reduce future risks.
Our future, or at least our children’s future, depends on our taking a zero tolerance approach on carbon emissions now.
Risky Business: The Economic Risks of Climate Change in the United States,” was produced by The Risky Business Project, a joint, non-partisan initiative of former Treasury Secretary Henry M. Paulson, Jr., New York City’s former mayor, Michael R. Bloomberg, and Thomas P. Steyer, former Senior Managing Member of Farallon Capital Management, joined by members of a high-level “Risk Committee” who helped gather and review the research findings.
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