If left unchecked, climate change will repeatedly flood coastal homes and businesses, severely disrupt the agricultural sector, and cost Americans millions of dollars in lost productivity and health costs, according to a report out Tuesday.
Titled “Risky Business,” the report ties together scientific data and economic projections to form the first comprehensive assessment of the economic risks the United States faces from climate change.
According the report’s authors, climate change is likely to take a toll on the US economy as a whole as sea-level rise eats up coastal properties and rising temperatures disrupt farming and labor.
Some regions will have it worse than others—with the Southeast, the Midwest and the East Coast taking the hardest hits from global warming.
Projections included in the report say that states in the southeast, lower Great Plains, and upper Midwest may face up to a 50% to 70% loss in average annual crop yields.
Along the coasts, between $66 billion and $106 billion worth of property will be below sea level by 2050 if emissions continue unabated. By 2100, between $238 billion and $507 billion worth of property could be underwater.
Meanwhile, many places, including the already-scorched Southwest, will get even hotter—severely curtailing the labor productivity of outdoor workers like those employed in construction, agriculture, and landscaping.
Rising temperatures are also projected to drive up demand for air conditioning, which could strain power generation and transmission capacity and drive up electricity prices for consumers.
The report was commissioned by the nonpartisan Risky Business Project, which is led by a number of financial heavyweights including former US Treasury Secretary Henry Paulson, former New York City mayor and financial media tycoon Michael Bloomberg, and the billionaire philanthropist Tom Steyer, who made his fortune at the Farrallon Capital Management, a hedge fund.
In an op-ed published in the New York Times, Paulson compared the climate crisis to the 2008 collapse of the housing bubble, writing:
We are building up excesses (debt in 2008, greenhouse gas emissions that are trapping heat now). Our government policies are flawed (incentivizing us to borrow too much to finance homes then, and encouraging the overuse of carbon-based fuels now). Our experts (financial experts then, climate scientists now) try to understand what they see and to model possible futures. And the outsize risks have the potential to be tremendously damaging (to a globalized economy then, and the global climate now).
As outlined by the study, the potential impacts of a climate bubble are nothing short of catastrophic. But the report does offer some possible options related to mitigating and adapting to the changing climate.
Gregory Page, a member of the Risk Committee and former CEO and current Chair of the Board of Cargill, Inc. said:
The real value of the Risky Business conversation, even in the presence of all kinds of uncertainty, is that it encourages us to think long-term about what actions we can take today that put us in the best position to be prepared for the future. We need to invest in innovative technologies and practices today so that we’re in the best position to be prepared for the future.
The three pillars of action outlined in the report are business adaptation, investor adaptation, and public sector response. Businesses are encouraged to change their practices in the face of climate variability and sea-level rise, and incorporating risk assessment into corporate balance sheets would lead to more accurate valuation of assets, the report’s authors claim.
At the same time, national and international action to limit emissions is perhaps the most critical step to prevent runaway climate change. According to the Intergovernmental Panel on Climate Change (IPCC), the world may have as little as 15 years to keep planetary warming below the redline of 2 degrees Celsius.