Consequences of Climate Change Damages for Economic Growth

Source here



This analysis considers many, but not all, costs of climate change. The following are included: This analysis considers many, but not all, costs of climate change. The following are included:

agricultural changes

land lost to sea level rise

tourism losses

ecosystem damage

changes in energy usage

losses due to health issues

fishery changes

The following are not included (this list does not include everything):

extreme weather damages

losses associated with forced migration

losses associated with reduced labor output due to extreme heat

losses associated with flooding

losses associated with lack of water





Thus, this estimate is likely significantly lower than the actual impacts. All that being noted, they project annual GDP losses of 0.7% to 2.5% by 2060 and 1.5% to 5% by 2100 and included these plots:







Climate Vulnerability Monitor Source here

This analysis from DARA is interesting in that it includes an estimate for how much climate change currently costs us. They include a massive number of factors, and I'll just note that they're on page 23 in the source instead of listing them all here. They arrive at ~1% of GDP lost per year in 2010 due to climate change.

Going forward, they estimate ~2% GDP lost per year by 2030 due to climate change.

They also have an interesting set of estimates for the total cost of climate change if you compare it against the cost of mitigating. They find the following for the 21st century (page 20): no mitigation means 4% net loss in GDP per year

extreme mitigation means 1.5% loss in GDP per year

in-between mitigations means 2% loss in GDP per year It's important to note that this projection does not assume extreme mitigation between now and 2060 and assumes a temperature increase of 1.5 degrees (C) between 2010 and 2060.

Stern Review





This is a very comprehensive analysis of the costs and impacts of climate change and includes a lot of potential causes. It's also extremely long, so I'm just going to note that their general conclusion (p 143 in the source) is:

no mitigation: GDP losses of 5 - 20%

heavy mitigation; GDP losses of 0 - 5%

Climate Change in the United States If you are interested in this report but don't want to read hundreds of pages, the wikipedia page has a decent summary. It's also important to note that this is an older report, and the author has indicated more recently that he underestimated the costs since the climate has changed rapidly since then.







losses associated with health issues

losses associated with reduced labor output due to increases in extreme heat

losses associated with infrastructure

changes in energy usage

losses associated with damage due to sea-level rise

losses associated with droughts

agricultural changes

ecosystem changes

losses associated with wildfires

tourism changes Some of the categories not included are (this list does not include everything): This is an analysis of how climate change will affect the United States that was performed by the EPA. For costs, it considered a large number of factors:

losses associated with forced migration

losses associated with extreme weather The costs they arrive at are roughly $300 billion per year in 2050 and $1800 billion per year in 2100. It is important to note that these costs assume some mitigation, so the costs with no mitigation would be higher.

The Cost of Climate Change Source here

This analysis of climate change in the United States from the NRDC cites a cost of 3.6% of annual GDP by the end of the 21st century, and focuses on four factors that will make up half of that: hurricane damages

changes in energy usage

real estate losses due to sea level rise

losses associated with changes in water availability They provide a nice summary table that I have included below:





It is important to note that these projections are for us continuing what we do today.

American Climate Prospectus







losses associated with coastal damage (both storms and sea-level rise)

losses associated with health issues

labor changes

changes in energy usage

agricultural changes

changes in crime Some of the categories not included are (this list does not include everything): This is an analysis of how climate change will affect the United States that was performed by the Climate Impact Lab . This is similar to the EPA one in a lot of ways, and includes the following factors:

changes in water availability

inland flooding

wildfires

specialty crops

health impacts from air pollution changes

Estimating economic damage from climate change in the United States





This is another analysis from the climate impact lab mentioned earlier. Unfortunately, this one is behind a paywall. However, there is a nice resource page here that contains the relevant information.





The results of this analysis are an estimate of GDP loss as a function of temperature increase, and an image is contained below:













There's not much more to pull from this one since you can just read the estimates off the graph. It's worth noting that they published a pretty popular article in the New York Times with this that you might have seen recently.

IPCC





The IPCC aggregated some of the available estimates for some of the costs of climate change. The sources in general model a small selection of the costs, and they mostly vary from 0% to 3% of GDP lost for 2.5 degrees (C) of warming. It is important to note that 2.5 degrees of warming will require significant mitigation, so this cost represents the cost with significant mitigation.

Global Non-Linear Effect of Temperature on Economic Production Source here

This model is basically to derive a formula relating a country's GDP and its temperature profile, then project where each country will be as their temperature profile changes due to global warming. I don't like this model as it feels overly simplistic, but it was in the news a lot recently so I am including it.









An interesting take on this model is They estimate total losses of ~23% of global GDP by 2100. They have several figures, but I am including this one that is a projection for each country. Note that this analysis shows Europe doing extremely well while many do not.An interesting take on this model is The Price Tag of Being Young which applied the results of the model to median earners to estimate the total loss in wealth over their lives. They arrived at the following estimates of wealth loss due to climate change: 21 year old that goes to college: $187,000

21 year old that does not go to college: $142,000

2 year old that goes to college: $764,000

2 year old that does not go to college: $581,000 Summary As you can see from these projections, there is a lot of variability in what's available. It is very difficult to do an apples to apples comparison between them since they all use different methodologies, assume different emissions scenarios, and leave out different factors.





One really nice summary that I did not include because it basically references other ones here is an





It is very important to note that none of these analyses include all possible factors and the majority of them note that they are underestimates. Thus, it seems unlikely that the cost will be on the low end of these projections. A huge one that I couldn't find anywhere that's probably impossible to estimate well is the cost of wars associated with global warming. With agricultural output changing, countries flooding, and massive numbers of refugees/migrants, wars due to climate change seem inevitable.One really nice summary that I did not include because it basically references other ones here is an analysis by Citigroup . However...it is worth calling it out because it's very comprehensive and they include an analysis of the cost of mitigating vs the cost of not. They find that we save tens of trillions of dollars if we mitigate.

I've looked around and have not seen a great summary of how much global warming will cost. Given that, I decided to aggregate the estimates that I could find and have summarized them here.All of the estimates use different assumptions, so it's impossible to do exact comparisons. I will thus include notes about each estimate to hopefully frame them correctly.Before you read through, my completely unscientific tldr based on reading these is that with heavy mitigation, it will cost 2-3% of our GDP annually, and without mitigation, it will cost 4-10% of our GDP annually. For perspective on those numbers, 1% of the world's annual GDP right now is $750 billion, and the US military costs ~$650 billion per year. Thus, you can think of 1% as the total cost of the US military.Summarizing all of the impacts (taken from info in pages 115-119), I arrive at projected costs of ~1% of the GDP by 2050 and ~3% by 2100 with no mitigation.