Climate Change: How Much Does It Really Cost?
Undoubtedly, it’s a different climate for talking about climate change this year. Extreme weather events have replaced legislative proposals as the big hook for discussing the issue. What hasn’t changed much is that we are still talking about it, and much of the talk still centers on the costs.
When climate legislation was before Congress last year, much of the discussion focused on the costs of reducing greenhouse gas emissions. This year we are seeing a new set of headlines. Story after story describes communities across our country being hit by extreme weather events – the floods in the Mississippi, Missouri and Souris rivers, the drought in Texas, and the wildfires in Florida and Arizona. We see vivid photos of temporary levees being built around nuclear power plants and wildfires threatening stored plutonium in New Mexico. The increasing number of extreme weather events is a wake-up call of the costs we will incur if we fail to address climate change.
We teamed up with Scientific American to explain this link between climate change and extreme weather. In a new three-part series featured on Scientific American.com, award-winning science journalist John Carey dissects the science, impacts, and actions to take regarding the record-breaking floods, heat waves, droughts, storms, and wildfires experienced across the United States and the world in the past year. The third installment appears today.
Extreme weather imposes massive costs on communities across the United States almost every year. For example, the recent flooding in Minot, North Dakota, displaced 25 percent of the town’s population, and it could be weeks before residents can return to their homes. People who were affected by the historic Mississippi flooding this year are still trying to pick up the pieces and return their lives to normal. Preliminary estimates of total economic damages were in the range of $6 billion to $9 billion, and costs to repair the levees alone are estimated to be around $1 billion. Elsewhere, farmers and business owners in Texas confronting a record-breaking drought are facing up to a season of lost revenues that is expected to total $3 billion in agricultural losses alone.
Weather impacts cut deeply into our economy touching many important sectors. Work by Jeffrey Lazo at the National Center for Atmospheric Research has shown that the economic value attributable to weather variability could be as high as 3.4 percent of GDP or $485 billion annually. These costs not only include energy and rebuilding costs after extreme weather but also the costs of weather related production and consumption decisions.
Some of these costs get passed on to the American taxpayer. Most people don’t realize that flooding is the single biggest economic impact from weather. Nor do most people know that the National Flood Insurance Program (NFIP) is the government’s second largest fiscal liability after Social Security. The program is already $16 billion in debt and premiums currently do not reflect the risk of extreme weather. This massive liability is growing by the day and will increase further over time due to the increase in extreme weather risk from increasing greenhouse gas concentrations.
Of course extreme weather happens regardless of climate change. But the science is very clear that climate change is causing the risk of extreme weather to rise, and that leads directly to more expected damages. Climatologists have documented increases in extreme rainfall and hurricane intensity in the past 30 to 50 years and a lengthening of the wildfire season in the west, so the effect isn’t something that’s off in the future. The increase in risk from climate change represents a large, hidden economic cost for individuals, communities, and taxpayers across the nation. By continuing to add greenhouse gases to the atmosphere, we are taking a bigger and bigger gamble with the weather, and increasing the risks that communities will lose that bet. Minot, Vicksburg, Miss., and Texas serve as the most recent examples.
When you know you’re playing with loaded dice, your best bet is to get out of the game. Actions to reduce greenhouse gases will certainly impose costs, but make no mistake, inaction carries a price tag too. Recovering from the impacts of extreme weather events is likely to be far costlier and more disruptive. Doesn’t it make more sense to put in place a balanced program that will both reduce greenhouse gas emissions and make the necessary investments to make our communities more resilient to extreme weather events?
Dan Huber is Science & Policy Fellow