Risky Business: The Economic Risks of Climate Change to the United States, Final report

‘Risky Business’ estimates the impact of projected changes in temperature, precipitation, sea levels, and storm activity on the U.S. economy.  The report presents a new approach to understanding climate risks for key U.S. business sectors, and provides business leaders with a framework for measuring and mitigating their own exposure to climate risk. The Risky Business research focused on damage to coastal property and infrastructure from rising sea levels and increased storm surge, climate-driven changes in agricultural production and energy demand, and the impact of higher temperatures on labor productivity and public health.

The report is a product of the Risky Business Project, a joint, non-partisan initiative of former Treasury Secretary Henry M. Paulson, Jr., Mayor of New York City from 2002-2013 Michael R. Bloomberg, and Thomas P. Steyer, former Senior Managing Member of Farallon Capital Management. They were joined by members of a high-level “Risk Committee” who helped scope the research and reviewed the research findings.

This resource was featured in the July 18, 2014, ASAP Newsletter.

"Money money money, it’s all about the money (O.K… it isn’t actually all about the money, but it generally should be part of the resilience discussion). The recent Risky Business Report projects:

-$66 Billion - $106 Billion of coastal property underwater by 2050
-3% reduction in labor productivity for outdoor workers due to increased heat
-Increase demand (and cost) for air conditioning
-Some states may see 50%+ loss in agricultural yields

In some ways this is the Stern Review of 2014 but with a focus on the US, and less on GDP and more on money. By the way, Nicholas Stern said last year about his review of the economic impacts of climate change: 'I think I would have been a bit more blunt. I would have been much more strong about the risks…'"

The Risky Business Project represents a first-of-its-kind effort to combine the best available projections for changes in local climate conditions across the U.S. with empirically-derived estimates of the fiscal impact of those changes on key sectors of the U.S. economy. The report highlights climate risks to specific business sectors and regions of the economy, and provides actionable data at a geographically granular level for decision-makers. Quantified climate impacts are assessed on various geographical scales, in some cases providing county-level results, as well as by state and region. Interactive maps are provided throughout the report. 

The findings show that, by continuing on the current path, many regions of the U.S. face the prospect of serious economic effects from climate change. However, if a different path is chosen - acting aggressively to both adapt to the changing climate and to mitigate future impacts by reducing carbon emissions - exposure to the worst economic risks from climate change can be significantly reduced.

The key findings demonstrate that climate risks will multiply and accumulate with the current emissions scenario. These risks include:

  • Large-scale losses of coastal property and infrastructure
  • Extreme heat across the nation - especially in the Southwest, Southeast, and Upper Midwest - threatening labor productivity, human health, and energy systems
  • Shifting agricultural patterns and crop yields, with likely gains for Northern farmers offset by losses in the Midwest and South

For example, according to the report, between $66 billion and $106 billion worth of existing coastal property will likely be below sea level by 2050 if climate change continues unabated. Sea level rise and greater coastal storm damage already threaten the financial value and viability of many properties and infrastructure along the Eastern Seaboard and Gulf Coast. Some homes and commercial properties with 30-year mortgages in places in Virginia, North Carolina, New Jersey, Alabama, Florida, and Louisiana and elsewhere could quite literally be underwater before the note is paid off. Also, the national commodity crop production, such as corn, soy, wheat and cotton, could decline 14 percent by mid-century and up to 42 percent by late century.

 

Publication Date: June 24, 2014

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