Economic costs of climate change 'will affect every American'

Independent economists and environmentalists are warning of dire consequences for the US economy if policy makers fail to take urgent action on climate change. "Climate change will effect every American economically in a significant and dramatic way," said Matthias Ruth, director of the University of Maryland's Center for Integrative Environmental Research. In a new study released this week, Ruth observed that further delays in tackling climate change would not only cause greater damage to the US economy, but would also raise the future cost of dealing with natural disasters. The authors of the study, entitled "The US Economic Impacts of Climate Change and the Costs of Inaction," say their efforts to analyze the economic research done in the past and pull in other relevant data make the study the first of its kind. The costs of climate change inaction is likely to be much higher than the required spending on cuts in carbon emissions, the report's authors said, adding that the United States can expect to lose hundreds of billions of dollars in damage to its infrastructure, agriculture, and manufacturing sector if more isn't done soon to slow climate change. "We're making billions of dollars of infrastructure investments every year and often without taking impacts of climate change into account," said Ruth, stressing there was a "strong need for action across all sectors." The report concludes that the real economic impact of climate change is "fraught with hidden costs," which will vary regionally and will put a strain on public sector budgets. For example, the combined impacts of storms on the United States since 1980 have surpassed $560 billion. Hurricane Katrina alone accounted for nearly $200 billion in economic losses. According to Ruth and other researchers, more frequent and intense storms -- as many climate scientists have predicted -- will raise the price tag even higher. But storm damage is just one factor in what is fast becoming a cascade of costs, the report said. Estimates suggest that in the US West and Northwest, the cost of fire suppression and property damages will run in the billions due to changes in precipitation patterns and snow pack. The Great Plains can expect to experience increased frequency and severity of flooding and drought, resulting in additional billions of dollars in damages to crops and property. The already sinking water levels will go lower in the Great Lakes-St. Lawrence River system, driving up shipping costs and severely impacting the Midwest manufacturing sector. Sea level rise and storm surges will eat away valuable property along the Atlantic coast -- a single storm surge event can cost $2 billion to $6.5 billion. And drought will take firmer hold of the South and Southwest, with costly impacts on agriculture, industry, and households. For the Central Valley in California alone, the economy-wide loss during the driest years is predicted to be around $6 billion. Ruth's report does not offer any total costs to the US economy because the methodology for calculating that does not yet exist. Climate science is well-established, but the economics of climate change impacts is still in its infancy. There is a great deal of work still to be done to build robust economic models, Ruth said, urging policy makers not to wait to formulate a national policy for action to mitigate emissions and adapt to already unavoidable impacts of climate change, in an effort to minimize the overall costs. The energy sector not only has to reduce its greenhouse gas emissions, but also needs to be decentralized to become efficient and buffer it from severe weather events, the report said. Other recommendations included simple market mechanisms such as pricing of water or dropping the tax exemption on fertilizer to get immediate environmental benefits. While many industrialized countries seem willing to adopt a global approach in dealing with the threat of climate change, the Bush administration has given no indication of joining the rest of the international community. It remains outside the fold of the Kyoto treaty and has flatly rejected calls -- even from its allies -- to agree to mandatory caps on carbon emissions. In a parallel move to a UN-sponsored summit on climate change, the Bush administration recently organized a separate meeting of those representing the most industrialized nations. But as many had expected, the meeting in Washington offered no meaningful results, according to climate activists in the United States and abroad.