Daily Management Review

Climate change will cost US $ 500 billion a year


Consequences of global warming in the absence of a consistent adaptation policy by the end of the century will cost the US economy $ 500 billion a year, according to a report released by the US administration last Friday. In contrast to the policies of the current President Donald Trump, who announced withdrawal from the Paris Climate Agreement and curtailed a series of environmental initiatives of his predecessor, the document states that climate changes that have already become a reality will affect almost all sectors of the economy.

NPS Climate Change Response
NPS Climate Change Response
The report, prepared by 13 government agencies, including NASA, the Environmental Protection Agency and the Ministry of Defense, is the fourth in a row (first released in 2000) and the first since the current White House administration took power. Unlike the previous volumes, which dealt primarily with natural changes, the latest 1600-page document contains specific forecasts of economic losses from global warming for different sectors of the US economy, taking into account different scenarios.

With continued growth in emissions at current rates, it is expected that losses in some sectors of the economy will reach hundreds of millions of dollars by the end of the century, and “this is more than the current GDP of many US states,” the researchers note. Without significant global efforts to mitigate the effects of climate change and regional adaptation policies, rising temperatures, rising sea levels and natural disasters are expected to damage critical infrastructure — including energy and transportation systems designed for other operating conditions. Flooding threatens the market for expensive coastal real estate, which is estimated at trillions of dollars. People will suffer the most: climate change will have a negative impact on labor productivity and citizens' health, from the spread of Zika virus to the increase in allergic background, and the poor and socially unprotected groups will suffer the most, scientists warn. All regions and industries dependent on natural resources and climatic conditions will be affected: agriculture, tourism, fisheries, rising temperatures will simultaneously reduce the efficiency of power generation and increase demand, leading to higher prices, moreover, even the foreign trade sector will have a negative impact export and import prices and supply chains.

Thus, under the unfavorable scenario (inaction and continuation of current trends) annual labor losses will reach $ 155 billion by 2090, while the implementation of the goals of the Paris Agreement and additional efforts to decarbonize the economy can reduce this amount by 48%. A reasonable climate policy can bring even greater effect to reduce mortality from extreme temperatures (analysts expect that the increase in mortality from heat will significantly override the decline in mortality from cold): in an unfavorable scenario, losses are estimated at $ 141 billion, it is possible to reduce them by 58%. Coastal real estate damage is estimated at $ 118 billion a year, a possible reduction of 22%, deterioration of air quality will cost $ 26 billion (risk reduction 31%), damage to roads will amount to $ 20 billion (59%), power generation - $ 9 billion (63%) , flooding of land will entail losses of $ 8 billion (47%). The losses from forest fires are expected to decrease only slightly (by $ 106 million). Thus, the total amount of losses will be about $ 500 billion annually.

Also, the document referring to previous studies states that climate change, already recorded in the United States since the early 1900s, is 90% man-made and is caused by the burning of fossil fuels. At the same time, the publication of the report after the statement by the President of the United States Donald Trump about the record cold Thanksgiving Day (“What happened to global warming?” he asked on Twitter) raised questions during the presentation of the document, but the authors called them “relevant”, insisted that the content of the study is more important than a similar controversy.

source: cnbc.com