NEWS

U.S. inaction on warming could cost $3.8T a year—report

05/23/2008

Daniel Cusick, Greenwire reporter

Environmental damage and other hardships caused by unmitigated climate change could cost the U.S. economy $3.8 trillion a year by the end of the century, according to a report released today by the Natural Resources Defense Council.

The report prepared by Tufts University economists employs models that assume a "business-as-usual" approach to reducing domestic carbon dioxide and other greenhouse gases and present a bleak picture of what the U.S. citizens and business owners will face in a world of unchecked climate change.

"If you think it’s expensive to do something about climate change, this tells you how expensive it will be to do nothing about climate change," said Frank Ackerman, research and policy program director for Tufts’ Global Development and the Environment Institute.

The study estimates the economic impacts of unmitigated climate change in two ways. First, researchers examined four critical outcomes associated with global warming—hurricane damage in coastal zones, real estate losses due to sea-level rise, higher energy costs caused by rising temperatures and water scarcity due to persistent drought.

The researchers found, using the most pessimistic of forecasts, that those four effects alone would cost $1.9 trillion, roughly 1.8 percent, of gross domestic product, annually.

The second analysis applied a British forecasting model to paint more comprehensive, but less precise, picture of the economic effects of climate change.

Under that scenario, researchers found that the cumulative impacts of warming—including economic losses, noneconomic damages and increased risk of catastrophic events—would be twice as great as the more conservative estimate, or 3.6 percent of GDP.

Dan Lashof, director of NRDC’s Climate Center, said the study shows the government can no longer afford a do-nothing or go-slow approach to warming.

"The window of opportunity is closing very rapidly," Lashof said, "and to avoid the most dangerous impacts of global warming, the United States needs to put its emissions on a downward trajectory over the next 20 years. To do that, we need to act now and we need to act decisively."

The NRDC study comes as the Senate prepares to debate an climate bill sponsored by Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.). Concerns about the costs of implementing the legislation have grown in recent weeks, with industry groups claiming the high costs of implementation will drive jobs and investment overseas.

Jack Gerard, president of the the American Chemistry Council, this week called for a coupling of any climate change legislation with policy protecting U.S. industry.

"If you start pushing groups like ours out of the country, it’s going to impact employment, it’s going to impact state tax revenues, your costs at your hospitals, your local schools, and the list goes on and on," Gerard said on E&ETV’s OnPoint. "So people have to take a deep breath, think seriously, and handle this one well."