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Study Reveals Climate Change’s Large, Geographically Disparate Economic Damages

Last week, Republican lawmakers revived a bill aimed at stopping use of the social cost of carbon (or the social cost of any greenhouse gas) in federal rulemaking (subscription). The bill would bar the U.S. Department of Energy and U.S. Environmental Protection Agency from applying the metric in any action, going further than President Trump’s executive order, signed in March, to revoke existing guidance and disband the interagency working group that sets guidance for the metric’s use. The bill’s reintroduction comes on the heels of a new study in the journal Science that makes a major advance in calculation of the cumulative economic impacts of climate change.

The study estimates that the United States could incur damages worth 1.2 percent of gross domestic product (GDP) for every 1 degree Fahrenheit rise in global temperature. Those damages include worsening economic inequality, heat-related deaths, agricultural declines, and even increased crime. The hard-hit counties—mainly in the South—could see losses higher than 20 percent of GDP. In the worst-hit county, Florida’s Union County, losses could near 28 percent, the kind of disparity that could contribute to political instability and drive mass migration.

According to lead researcher Solomon Hsiang, an economist at the University of California, Berkeley, the most striking “takeaway message” is that “the effects of climate change on the U.S. are not the same everywhere. Where you are in the country really matters.” By which he means that climate change will move wealth away from the south and toward the north and west of the country, although he acknowledges that exact costs and their redistribution are hard to nail down because a changing climate makes the future world hard to predict.

Nonetheless, “Unmitigated climate change will be very expensive for huge regions of the United States,” said Hsiang. “If we continue on the current path, our analysis indicates it may result in the largest transfer of wealth from the poor to the rich in the country’s history.”

The main takeaway of the study for Nicholas Institute for Environmental Policy Solutions faculty fellow Billy Pizer, who wrote a perspective accompanying the study, is that it has produced “the first comprehensive estimate of climate change damages driven by state-of-the-art empirical studies of climate change impacts.”

The study team—a group of economists and climate scientists—used state-of-the-art statistical methods and 116 climate projections to price those impacts the way insurers or investors would. Specifically, they computed the real-world costs and benefits of increased temperatures, changing rainfall, rising seas and intensifying storms on agriculture, crime, health, energy demand, labor and coastal communities. In total, they computed the possible effects of 15 types of impacts for each U.S. county in 29,000 simulations.

The study appears to represent a significant improvement over earlier financial forecasts of climate change, which approximated damages for the entire country at once. The new study built its model from microeconomic studies of how variation in climate affects well-measured, and well-valued, county-level outcomes like crop yields, mortality, and energy consumption. But because the model’s algorithms emerge from observed relationships in real-world data, estimates omit many serious climate change risks, such as biodiversity loss, for which economic cost data were considered insufficient.

According to the researchers, their model is designed to continually integrate new findings and new climate model predictions, producing actionable science (subscription).

Red Team, Blue Team: Pruitt Calls for Debate of Climate Science

On Monday, a federal appeals court ruled that the U.S. Environmental Protection Agency (EPA) cannot freeze implementation of a rule requiring oil and gas companies to fix leaks of methane, a greenhouse gas, while it reconsiders that rule. The court ruling could hint at trouble for the Trump administration’s efforts to unilaterally delay regulations such as those aimed at curbing greenhouse gases. But EPA Administrator Scott Pruitt may have found a new context in which to question the need for such regulations.

Pruitt is leading a formal initiative to assess climate science using a “back-and-forth critique” by government-recruited experts. The idea is to stage “red team, blue team” exercises used by the military to identify vulnerabilities in field operations to conduct an “at-length evaluation of US climate science,” an official told ClimateWire. Other Trump administration officials are said to be discussing whether the initiative would stretch across many federal agencies that rely on such science.

“Climate science like other fields of science is constantly changing,” said EPA spokeswoman Liz Bowman. “A new, fresh, and transparent evaluation is something everyone should support doing.”

But scientists and former EPA officials worry that the debate will give a disproportionately large voice to the limited number of skeptical voices within the scientific community. And, as was pointed out by PBS, science does not operate not by debate but by peer-reviewed studies.

Energy industry executives said the approach to scientific review that Pruitt is instituting could allow a challenge to the 2009 scientifically based environmental endangerment finding that established the EPA’s legal foundation for restricting greenhouse gas emissions from mobile and stationary sources. But lawyers say successfully making that challenge could be extremely difficult.

President Outlines Energy Dominance Proposals

President Trump last week outlined a multipronged plan to increase production of and export fossil fuels, including what he described as “clean, beautiful coal.” Speaking at the Department of Energy’s Washington headquarters, he called the need for regulations “a myth” and said his new policies would reap “millions and millions of jobs and trillions of dollars in wealth.” Although he did not reference renewable energy, climate change or reducing emissions, he touted his decision to exit the Paris climate agreement and to approve the Dakota Access and Keystone XL oil pipelines.

To usher in what he dubbed “the golden era of American energy,” Trump outlined six initiatives:

  • Expanding nuclear energy
  • Lowering barriers to financing of overseas coal energy plants
  • Constructing a petroleum pipeline to Mexico
  • Increasing sales of natural gas to South Korea
  • Exporting additional natural gas from the Lake Charles liquid natural gas terminal in Louisiana
  • Opening a new offshore oil and gas leasing program.

The last initiative calls for an Interior Department rewrite of a five-year Obama-era drilling plan that had closed areas of the Arctic and Atlantic oceans to drilling. The Washington Post pointed out that the surge of onshore oil and natural gas production due to horizontal drilling has helped to lower the price of petroleum, diminishing interest in offshore drilling.

In a New York Times op-ed, former U.S. Environmental Protection Agency head (and Nicholas Institute for Environmental Policy Solutions Advisory Board chairman) William Reilly noted that drilling in those areas could come at an economic cost. “A spill in any of those waters could threaten multibillion-dollar regional economies that depend on clean oceans and coastlines,” said Reilly, who pointed out that Trump has called for reconsideration of the well control rule, which tightened controls on blowout preventers, which are designed to stop undersea oil and gas well explosions. That rule was based in part on findings of the bipartisan National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, which Reilly co-chaired.

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The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions and cross-posted on the Huffington Post and National Geographic NewsWatch. Like us on Facebook, follow us on Twitter, or subscribe to our YouTube channel for more updates.

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