Estimating economic damage from climate change in the United States

Abstract

Estimates of climate change damage are central to the design of climate policies. Here, we develop a flexible architecture for computing damages that integrates climate science, econometric analyses, and process models. We use this approach to construct spatially explicit, probabilistic, and empirically derived estimates of economic damage in the United States from climate change. The combined value of market and nonmarket damage across analyzed sectors—agriculture, crime, coastal storms, energy, human mortality, and labor—increases quadratically in global mean temperature, costing roughly 1.2% of gross domestic product per +1°C on average. Importantly, risk is distributed unequally across locations, generating a large transfer of value northward and westward that increases economic inequality. By the late 21st century, the poorest third of counties are projected to experience damages between 2 and 20% of county income (90% chance) under business-as-usual emissions (Representative Concentration Pathway 8.5).

Poverty and climate change: introduction

“…The distribution of impacts across countries is heterogeneous, and using global GDP as a metric to measure the cost of climate change may hide disproportionally large impacts on poor countries or regions (Mendelsohn et al, 2000;Tol, 2002Tol, , 2009Hope, 2006;Mendelsohn et al, 2006;Stern, 2006;Nordhaus, 2014;Hsiang et al, 2017). Threefourths of global income goes to North America, Europe, and East Asia; other regions are economically much smaller, in particular sub-Saharan Africa, which only generates 3 per cent of global GDP.…”

An introduction to the special issue on the Benefits of Reduced Anthropogenic Climate changE (BRACE)

“…We take as representative points of comparison two studies of US impacts, the Climate Change Impacts and Risk Analysis project (CIRA; EPA 2015) and the American Climate Prospectus (ACP; Houser et al 2015 and see also Hsiang et al 2017), and two global studies, the Inter-sectoral Impact Model Intercomparison Project (ISIMIP; Warszawski et al 2014) and the closely related Agricultural Model Intercomparison and Improvement Project (AgMIP; Nelson et al 2014;Rosenzweig et al 2014). Although most have results for RCPs 8.5 and 4.5 (and in some cases, additional climate scenarios), these studies are not perfectly comparable to BRACE.…”

Is Economic Inequality Really a Problem? A Review of the Arguments

“…Those at the bottom of the income distribution may find that they have little choice but to move into environmentally fragile areas where their activities can lead to environmental damage. Hsiang et al (2017) show that the effects of climate change are worse in parts of the United States where incomes are lowest. The environmental justice movement has drawn particular attention to the fact that ethnic and racial minorities in the United States often live and work in locations afflicted by pollution and toxic waste (Skelton and Miller 2016).…”