The UK recently had its hottest day on record. “Train tracks buckled, roads melted, and thousands were stranded because it was out of the norm,” said Kamiar Mohaddes, an economist at the University of Cambridge. “Such events take an economic toll, and will only become more frequent and severe without policies to address the threats of climate change.”
He is a co-author of a study by researchers from the International Monetary Fund (IMF), the University of Southern California, the University of Cambridge, and National Tsing Hua University. The Washington Post’s Andrew Freedman described it as “the latest in a string of reports from the United Nations and global financial institutions and others showing that climate change constitutes a looming financial risk.”
The researchers said climate effects across the U.S. economy were broad. Each of the 10 economic sectors studied, including agriculture, manufacturing, mining and trade, were affected by at least one climate variable, Politico reported.
“The United States will be one of the countries that will suffer the most (reflecting sharp increases in U.S. average temperatures by 2100),” Mohaddes said. The researchers estimated that climate change would cost the U.S. economy 10.5 percent of GDP per capita and reduce global GDP per capita by 7.2 percent by 2100 if greenhouse gas emissions remain unchecked.
Meeting the Paris climate accord's goals would blunt negative economic effects from climate change, the paper said. The U.S. economy would shed just 1.88 percent of its GDP by 2100 by reaching the Paris deal's target of curbing emissions 26 percent to 28 percent below 2005 levels by 2025, according to the researchers. Opponents of the Paris agreement, including the Trump administration, have argued the non-binding pact would wreck the economy.
Some politicians maintain that the United States can innovate and adapt its way to managing climate change. The researchers don’t see it that way. They said the speed at which countries adjust and adapt to shifting historical norms correlates to the size of income losses: "Overall, while climate change adaptation could reduce these negative long-run growth effects, it is highly unlikely to offset them entirely. ... The evidence appears to suggest that (at least for now) adaptation has had limited impact in dampening the negative effects of climate change in the United States."
And adaptation is not inexpensive. Consider this excerpt from a New York Times story by Christopher Flavelle: “After three years of brutal flooding and hurricanes in the United States, there is growing consensus among policymakers and scientists that coastal areas will require significant spending to ride out future storms and rising sea levels — not in decades, but now and in the very near future. There is also a growing realization that some communities, even sizable ones, will be left behind.”
Flavelle cited a report by the Center for Climate Integrity, an environmental advocacy group, which estimates that, by 2040, simply providing basic storm-surge protection in the form of sea walls for all coastal cities with more than 25,000 residents will require at least $42 billion. Expanding the list to include communities smaller than 25,000 people would increase that cost to more than $400 billion.
The three most expensive cities to protect with sea walls, the group says, would be Jacksonville, New York, and Virginia Beach. The Times’ article has the full top ten.
All of the above is more evidence that it makes economic sense to act more quickly to limit climate change. Most economists are convinced that putting an honest price on carbon pollution is our best option. It’s time for Congress to take that advice.