Economic Impacts Of Climate Change – Mapping the potential economic impacts of climate change: Bipartisan scientists and economists are predicting which parts of the U.S. could be most affected by climate change. A new study is being conducted on a county-by-county basis to estimate the potential cost of global warming.
Potential economic losses are shown at the county level under a scenario in which greenhouse gas emissions continue at current levels. Green color indicates areas that can receive economic benefits. To view an interactive version of this map, click here. Hsiang, Kopp, Jina, Rising, etc./Science hide caption
Economic Impacts Of Climate Change
Potential economic losses are shown at the county level under a scenario in which greenhouse gas emissions continue at current levels. Green color indicates areas that can receive economic benefits. To view an interactive version of this map, click here.
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Climatologists agree that this century is getting much warmer and that such warming is likely to bring economic pain to the US, but economists are not sure by how much. Now a team of scientists and economists is writing in the next issue of the magazine
, says he can at least determine which parts of the country are likely to be hit the hardest.
The researchers started with history: How did heat and drought affect the economy in the past? They then applied that metric to a range of future warming scenarios — from mild to extreme — and mapped the effects county by county across the US. They found that if warming continues at recent rates, it could reduce by 3 to 6 percentage points. country’s gross domestic product by the end of the century — the warmer it gets, the bigger the blow to the economy.
Lead researcher Solomon Xiang admits the numbers are uncertain by scientific standards, but they’re not really definitive. “I think the most striking message is that the consequences of climate change for the US are not the same everywhere,” says Xiang, an economist at the University of California, Berkeley. “Where you are in the country really matters.”
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In cold places like New England, there could be an economic boost — for example, because of lower heating bills. But places that are already hot, like the South and Midwest, could see huge damage to their local economies through huge energy bills, crop losses or mass migration out of the region.
Perhaps not so surprising, but Xiang goes a step further: climate change will redistribute wealth, displacing workers, businesses and agriculture from these hard-hit regions and moving them mostly to the north and west of the country. Again, Xiang says exactly how much is hard to predict. But he says that’s actually part of the new study’s findings: “When you start changing the climate,” he says, “it starts to affect all these aspects of the economy, and it makes the future world harder to predict.”
Things that are somewhat easier to predict include how many more people die when heat waves become more severe, which has economic costs. But it’s much harder to imagine what new technologies might emerge to help people adapt to climate change, generate cleaner electricity, or remove carbon from the atmosphere.
With so many uncertainties, why do such exercises? Even if this is true, climate change costs of 6 percentage points or more of national GDP would be dwarfed by an economy that would grow many times over by 2100.
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“Within a century, it could make up for all the losses from anthropogenic global warming and then some,” said Ted Nordhaus, an analyst at the energy and environment group The Breakthrough Institute. “There is too much infrastructure and technical capability for citizens of affluent societies to see a drastic decline in living standards.” He says the downside of making predictions far into the future is that they scare people unnecessarily.
But economist Billy Pizer of Duke University says studies like this at least draw attention to a distant threat. “It’s important to understand: are we talking about something the size of a breadbox, or the size of an elephant, or the size of a mouse?” he says. “And I think getting those kinds of quantities right is, I think, very important, and I think that’s what this paper does.”
And it continues a long-standing attempt to determine what is called the “social cost of carbon” (carbon dioxide is the main greenhouse gas). What will a ton of carbon pollution do to the economy, and should polluters pay the cost now?
The administrations of George W. Bush and Barack Obama have sought to determine the social price of carbon by focusing on charging polluters a fee for each ton of carbon emitted.
Economic Consequences Of Climate Change
However, Donald Trump’s administration says it is not interested in the social cost of carbon or phasing out carbon fuels, arguing it would hurt the economy. Climate scientist Chris Field of Stanford University says that yes, decarbonizing the economy will be expensive, but he compares it to the space program of the 1960s. “It’s been expensive,” he says, “but it’s also unleashed a tremendous amount of creativity and innovation and really put the United States on a trajectory of 21st century readiness.”
An earlier version of this story incorrectly identified Stanford’s Chris Field as the economist. He is a climatologist. The distribution of warming impacts from emission sources has been uneven, with high-income, high-emission countries harming low-income, low-emission countries.
The economic effects of climate change vary geographically and are difficult to predict accurately. The researchers warn that current economic projections may seriously underestimate the effects of climate change, and point to the need for new models that give a more accurate picture of the potential damage. However, one 2018 study found that the potential global economic benefits if countries implement mitigation strategies to meet the 2°C target set by the Paris Agreement are about US$17 trillion per year by 2100 compared to a very high level of emissions.
A 2021 study by reinsurance company Swiss Reinsurance Company Ltd (Swiss Re) found that global climate change is likely to reduce global economic output by 11-14%, or $23 trillion annually, by 2050, compared to with global economic production without climate change. According to this study, the economies of rich countries like the United States are likely to shrink by about 7%, while some developing countries will be devastated, losing about 20% and in some cases 40% of their economic output.
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Socio-economic factors have contributed to the observed trend of global losses, such as population growth and increasing wealth.
Part of the increase is also due to regional climate factors, such as changes in rainfall and flooding. It is difficult to quantify the relative impact of socio-economic factors and climate change on the observed trend.
A 2019 modeling study found that climate change contributed to global economic inequality. Wealthy countries in colder regions have either experienced little overall economic impact from climate change, or may have experienced it appropriately, while poor countries in warmer regions have likely experienced less growth than if global warming had not occurred.
Part of this observation stems from the fact that greenhouse gas emissions occur primarily in high-income countries, while low-income countries are adversely affected.
Global Warming Has Increased Global Economic Inequality
Thus, high-income countries produce huge amounts of greenhouse gas emissions, but the consequences of these emissions do not equally threaten low-income countries, which do not have access to adequate resources to be able to recover from such consequences. This further deepens the inequality between the rich and the poor, hampering efforts towards sustainable development. The effects of climate change could push millions of people into poverty.
This study shows how important it is to take immediate action on climate change, because failure to do so will exacerbate economic inequality around the world.
For example, total damages are estimated to be 90% lower if global warming is limited to 1.5°C compared to 3.66°C, the no-mitigation level of warming.
One study found a 3.5% reduction in global GDP by the end of the century if warming were limited to 3°C, excluding potential tipping point effects. Another study found that the global economic impact is underestimated by a factor of two to eight, and tipping points are left out of consideration.
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According to Oxford Economics, a temperature increase of 2 degrees by 2050 will reduce global GDP by 2.5% – 7.5%. By 2100, in this case, the temperature will increase by 4 degrees, which in the worst case can reduce the world GDP by 30%.
Research from 2019 suggests that economic losses from climate change have been underestimated and may be severe, and the likelihood of catastrophic tail events is non-trivial.
Economic impacts of climate change also include any mitigation (eg, limiting the global average temperature below 2°C) or adaptation (eg, building flood defenses) measures taken by countries or groups of countries that may have economic consequences .
This section needs to be updated. The reason is this: most sources date from 2007 or earlier; the field has progressed a lot since then.. Please help update
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