The Economic Effects of Climate Change

The Logo of the IPCC (figure i)

IPCC's Temperature Projections (figure ii)

IPCC Special Report

The United Nations' Intergovernmental Panel on Climate Change (IPCC) released a report in October of 2018 detailing the importance of keeping global average temperatures below 1.5°C above pre-industrial temperatures.[1] This report is a direct response to the Paris Climate Accords which dictated that all signatory nations would work to keep global average temperatures below 2.0°C above pre-industrial temperatures.

The difference between a rise of 1.5°C compared to a 2.0°C one, according to the IPCC, is immense. In either world, countries would still be threatened by "more deadly heat waves, more heavy rainstorms, and more intense and frequent droughts."[2] However, a 1.5°C temperature change would see only half the number of species go extinct compared to that of a 2.0°C temperature change, as well as 80% of coral reefs disappearing instead of 99%, and the Arctic being completely melted only once a century instead of once a decade.[3] The Arctic is especially important, for a 2.0°C temperature change will almost certainly ensure feets of sea-level rise by the end of the century, threatening billions of people who rely on the economic production of or live within coastal cities.[4]

However, as seen in figure ii (see right), the world is poised not to meet a 1.5°C or 2.0°C temperature change but go well past it with current trajectories showing a likely temperature rise of 3.5°C above pre-industrial levels.[5]

U.S. Fourth National Climate Assessment

The United States' Fourth National Climate Assessment, a report drawing from several different government agencies, is noting that many communities across the United States are already feeling the effects of climate change. "More frequent and intense extreme weather and climate-related events, as well as changes in average climate conditions, are expected to continue to damage infrastructure, ecosystems, and social systems that provide essential benefits to communities."[6] While there is still no solid evidence that climate change is the cause of natural disasters such as Hurricane Harvey (see figure iii, right), Maria, Irma, the wildfires out west (see figure iv, right), or the flooding seen in the midwest (see figure v, right) it is extremely likely that the effects of these weather events have been exacerbated by climate change.[7]

These impacts are also most likely to impact marginalized, underprivileged, and lower-income communities the most, for they "have lower capacity to prepare for and cope with extreme weather and climate-related events."[8]

In terms of specific economic sectors, climate change will target "regional economies and industries that depend on natural resources and favorable climate conditions, such as agriculture, tourism, and fisheries," particularly impacting rural communities.[9] However, due to the pervasiveness and interconnectedness of the economy, the impacts to these sectors will not be limited by geography. Indeed, because climate change is a global threat, global trade involving both imports and exports is likely to be crippled as countries around the world confront the effects of global warming domestically.[10] As such, with our current trajectory and lack of substantive carbon-emission-reduction efforts, "annual losses in some economic sectors are projected to reach hundreds of billions of dollars by the end of the century—more than the current gross domestic product (GDP) of many U.S. states."[11]

Flooding Following Hurricane Harvey (figure iii)

Firefighters Battle Wildfires in California (figure iv)

Uneven Effect: Low-Income Nations Impacted the Most

IMF: The effects of a 1°C increase in temperature on real per capita output across the world varies significantly (figure v)

Climate-Related Costs by 2080-2099

Brookings Institute: The costs of climate change within the United States will be most heavily concentrated in the south, midwest, and along the coasts (figure vi)

The evidence is clear: Climate change is going to cost the world "hundreds of billions of dollars [in economic damages]—annually" and trillions upon trillions over the course of a decade.[12] If we continue to do nothing, the "cost [to] the world [would be] at least 5% of GDP each year—if more dramatic predictions come to pass, the cost could be more than 20% of GDP."[13] And the effects of climate change are not relegated to the future but unfolding right now: the cost of extreme weather since 2015 has eclipsed $400 billion in the United States.[14] This is not a problem to ignore or deny but confront head on, and it can only be done with significant and immediate action.

Sources:

Robinson Meyer, "How to Understand the UN's Dire New Climate Report," The Atlantic, October 9, 2018, accessed December 9, 2018, https://www.theatlantic.com/science/archive/2018/10/how-to-understand-the-uns-dire-new-climate-report/572356/.
Meyer, "How to Understand."
Ibid.
Ibid.
Reuters, "Global temperatures on track for 3-5 degree rise by 2100: U.N.," Reuters, last modified November 29, 2018, accessed May 22, 2019, https://www.reuters.com/article/us-climate-change-un/global-temperatures-on-track-for-3-5-degree-rise-by-2100-u-n-idUSKCN1NY186.
U.S. Global Change Research Program, FOURTH NATIONAL CLIMATE ASSESSMENT Volume II: Impacts, Risks, and Adaptation in the United States, Rep. (Nov. 23, 2018). Accessed December 6, 2018. https://nca2018.globalchange.gov/.
U.S. Global Change Research Program, FOURTH NATIONAL CLIMATE ASSESSMENT.
Ibid.
Ibid.
Ibid.
Ibid.
Eric Roston, "Americans Will Pay Billions More For Climate Change, and That's the Best Case," Bloomberg, November 23, 2018, accessed December 9, 2018, https://www.bloomberg.com/news/articles/2018-11-23/americans-will-pay-billions-more-for-climate-change-and-that-s-the-best-case.
Hilary Osborne, "Stern Report: The Key Points," The Guardian, October 30, 2006, accessed December 9, 2018, https://www.theguardian.com/politics/2006/oct/30/economy.uk.
Seth Borenstein, "Climate Change Consequences 'Already Being Felt' in Communities Across U.S., New Federal Report Says," PBS Newshour, November 23, 2018, accessed December 9, 2018, https://www.pbs.org/newshour/nation/climage-change-consequences-already-being-felt-in-communities-across-u-s-new-federal-report-says.

Figure:

IPCC, Logo of the IPCC, photograph, Planeta, October 8, 2018, accessed May 22, 2019, https://planeta.com/ipcc/.
Gavin, Cumulative Emissions of CO2 and Future Non-CO2 Radiative Forcing Determine the Probability of Limiting Warming to 1.5°, photograph, Real Climate, October 7, 2018, accessed May 22, 2019, http://www.realclimate.org/index.php/archives/2018/10/ipcc-special-report-on-1-5oc/.
U.S. National Guard, Support during Hurricane Harvey, photograph, Wikimedia Commons, August 31, 2017, accessed May 19, 2019, https://commons.wikimedia.org/wiki/File:Support_during_Hurricane_Harvey_(TX)_(50).jpg.
Firefighters fight California wildfire, photograph, New Hampshire Charitable Foundation, November 19, 2018, accessed May 19, 2019, https://www.google.com/url?sa=i&source=images&cd=&ved=2ahUKEwjt9MjluajiAhXPneAKHRBhCsYQjRx6BAgBEAU&url=https%3A%2F%2Fwww.nhcf.org%2Fwhat-were-up-to%2Fways-to-help-people-affected-by-california-wildfires%2F&psig=AOvVaw17PGED-
IMF, Uneven Effect, photograph, IMF Blog, May 3, 2019, accessed May 22, 2019, https://blogs.imf.org/2019/05/03/getting-real-on-meeting-paris-climate-change-commitments/#post/0.
Hsiang and others, Climate-related costs by 2080-2099, photograph, Brookings Institute, 2017, accessed May 22, 2019, https://www.brookings.edu/research/how-the-geography-of-climate-damage-could-make-the-politics-less-polarizing/.

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