Estimating economic damage from climate change in the United States
Costing out the effects of climate change
Episodes of severe weather in the United States, such as the present abundance ofrainfall in California, are brandished as tangible evidence of the future costs ofcurrent climate trends. Hsiang et al. collected national datadocumenting the responses in six economic sectors to short-term weather fluctuations.These data were integrated with probabilistic distributions from a set of global climatemodels and used to estimate future costs during the remainder of this century across arange of scenarios (see the Perspective by Pizer). In terms of overall effects on grossdomestic product, the authors predict negative impacts in the southern United States andpositive impacts in some parts of the Pacific Northwest and New England.
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).
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Supplementary Material
Summary
Materials and Methods
Figs. S1 to S18
Tables S1 to S19
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Science
Volume 356 | Issue 6345
30 June 2017
30 June 2017
Copyright
Copyright © 2017 The Authors, some rights reserved; exclusive licensee American Association for the Advancement of Science. No claim to original U.S. Government Works.
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Received: 21 November 2016
Accepted: 2 June 2017
Published in print: 30 June 2017
Acknowledgments
This research was funded by grants from the National Science Foundation, the U.S. Department of Energy, Skoll Global Threats Fund, and by a nonpartisan grant awarded jointly by Bloomberg Philanthropies, the Office of Hank Paulson, and Next Generation. The methodology and results presented represent the views of the authors and are fully independent of the granting organizations. We thank M. Auffhammer, M. Meinshausen, K. Emanuel, J. Graff Zivin, O. Deschênes, J. McGrath, L. Lefgren, M. Neidell, M. Ranson, M. Roberts, A. Norris, K. Chadha, A. Dobbin, A. Guerrero, L. Schick, and W. Schlenker for providing data and additional analysis; M. Burke, W. Fisk, N. Stern, W. Nordhaus, T. Broccoli, M. Huber, T. Rutherford, J. Buzan, K. Fisher-Vanden, M. Light, D. Lobell, M. Greenstone, K. Hayhoe, G. Heal, D. Holtz-Eakin, J. Samet, A. Schreiber, W. Schlenker, J. Shapiro, M. Spence, L. Linden, L. Mearns, S. Ringstead, G. Yohe, and seminar participants at Duke, MIT, Stanford, the University of Chicago, and the National Bureau of Economic Research (NBER) for important discussions and advice; and J. Delgado and S. Shevtchenko for invaluable technical assistance. Rhodium Group is a private economic research company that conducts independent research for clients in the public, private, and philanthropic sectors. Risk Management Solutions is a catastrophe risk modeling company that provides hazard modeling services to financial institutions and public agencies. The analysis contained in this research article was conducted independently of any commercial work and was not influenced by clients of either organization. Data and code used in this analysis can be obtained at https://zenodo.org/communities/economic-damage-from-climate-change-usa/. S.H. and R.K. conceived of the study. All authors designed the analysis. R.K. and D.J.R. developed climate projections. A.J. and S.H. gathered and reanalyzed econometric results. J.R. developed the meta-analysis system. S.H., R.K., A.J., J.R., M.D., and T.H. designed the economic projection systems, and J.R. developed it with support from M.D. and A.J. T.H., M.D., and S.M. developed the energy modeling system, with econometric support from A.J. R.M.-W., P.W., S.H., R.K., and T.H. designed the approach for analyzing cyclone losses; P.W. and R.M.-W. conducted modeling; and M.D. and A.J. analyzed results. M.D., S.M., and T.H. implemented general equilibrium modeling; R.K., S.H., A.J., and J.R. contributed to its design; and M.D., A.J., and S.H. analyzed the output. J.R. developed and implemented the approach for analyzing uncertainty. A.J. conducted analysis and construction of aggregate damage functions. R.K., S.H., and A.J. developed and implemented the approach for valuing risk and inequality of damages. S.H., R.K., A.J., J.R., M.D., D.J.R., K.L., and T.H. designed the figures; D.J.R. and A.J. constructed Fig. 1; M.D. and T.H. constructed Fig. 4; and A.J. constructed Figs. 2, 3, and 5. All authors wrote the manuscript.
Authors
Funding Information
National Science Foundation: award313443, SES 1463644
U.S. Department of Energy: award314050, DE-BP0004706
Bloomberg Philanthropies: award308002
Office of Hank Paulson: award308003
Skoll Global Threats Fund: award308005
Next Generation: award308004
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