The Economics of Climate Change

Climate change is real, it is happening, and it will be costly.

If we do nothing to mitigate the effects of climate change there will be costs to our economy, security, competitiveness, and public health.

That’s what a new study, Pay Now, Pay Later (PNPL), out today from the American Security Project has found.

Severe weather events, rising sea levels, and increasingly frequent and harsh wildfires – to name a few – will hamper American economic activity. Our water security is already jeopardized by receding lake levels, and less snowfall will further impact our access to drinking and irrigation water. The American shipping industry will suffer as the Great Lake levels fall and increasingly severe storms harm our ports. And warmer temperatures and higher pollution levels threaten to increase morbidity – especially in urban America – and contaminate the fresh waters of our lakes, rivers, and streams.

Inaction on climate change outweighs the cost of transforming our old energy economy into a green one.

For example:

• In western Kansas, higher temperatures and less rainfall could cost over $300 million and hundreds of jobs as a result of crop losses by 2035.
• Lake Mead could dry up as early as 2021, leaving 12-36 million people across the Southwest without a dependable water supply.
• Illinois’ manufacturing industry, which employs 680,000 people, is threatened by falling water levels and necessitated dredging along the Great Lakes- St. Lawrence shipping route.  By 2030, costs are expected to reach $92 – 154 million each year. And in Michigan, a 25% reduction in Great Lakes system connectivity could cost over $4 billion in import and export losses within the next few decades.

Some states could realize benefits – warmer temperatures, more precipitation, and higher atmospheric carbon mean Pennsylvania could see increased productivity in wooded areas. But research shows, many positives are likely to be hindered – or negated completely – by other climate change effects. The Pennsylvanian forestry industry could suffer as a result of higher ozone levels coupled with warmer temperatures.

There are inevitable changes occurring in our environment that will have costly effects on our state and national economies. We can either pay it now to invest in transforming our energy economy (one Congressional Budget Office study priced a climate legislation proposal at $175/household by 2020), or we can pay significantly higher economic and social costs in the future, as we play catch-up and try to adapt to the impacts of climate change.

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