Economic Impact of Climate Change Could Surpass $200 Billion Annually

article image
According to the Union of Concerned Scientists, intensified natural disasters will be one repercussion of climate change inaction.

The significant challenges needed to convert the world’s energy systems to sources that emit less carbon dioxide are giving pause to leaders throughout the world, but three recent reports highlight the overwhelming cost of inaction. Some have pointed to estimates made by the United Nations Framework Convention on Climate Change (UNFCCC), which pegged the global annual costs of adapting to climate change at $40 to $70 billion, or about the cost of three Olympic Games per year — a cost that some may find acceptable, as long as they’re able to continue business as usual.

However, a new report published by the International Institute for Environment and Development and the Grantham Institute for Climate Change at Imperial College London has found the real costs of adaptation to be two to three times greater than the UNFCCC estimate, because the earlier estimate didn’t include key sectors such as energy, manufacturing, retailing, mining, tourism and ecosystems. That could push the annual cost above $200 billion.

Two other reports take a closer look at the economic impacts in the United States. The Union of Concerned Scientists (UCS) found that unchecked climate change could result in hundreds of billions of dollars in damages to the United States. The report — an overview of more than 60 scientific studies — found costs were mainly driven by rising sea levels, more intense hurricanes, more flooding, declining public health, strained energy and water resources, and impaired transportation infrastructure. UCS notes that the cost of taking preventative action would be dramatically less than the cost of allowing climate change to continue.

Meanwhile, the American Security Project (ASP) has issued a new report highlighting dire security threats to the United States if climate change remains unchecked. ASP warns of competition for dwindling resources — especially water — and how that can result in weakened or poorly functioning governments throughout the world.

Reprinted from EERE Network News, a free newsletter from the U.S. Department of Energy.