No area of the world will escape climate change’s impacts; however, its effects will vary significantly among communities. Poorer counties in the U.S. will experience greater damage as a result.
Some individuals can afford measures to combat climate pollution; unfortunately, billions of others cannot.
1. Loss of life and property
Climate change has already caused people to lose homes, crops, and lives – this phenomenon is known as “loss and damage”. Loss and damage may result from immediate disasters like flooding, wildfires or hurricanes – which have been intensifying due to climate change – or more gradual events like rising sea levels or ocean acidification; or it could simply include emotional costs associated with grieving over lost family members, traditions or ways of life.
Every region in the world is vulnerable to climate change losses and damages, yet low-income countries tend to bear more. This is partly because they emit more carbon dioxide and face greater climate impacts such as higher temperatures. Furthermore, low-income communities usually lack money for adaptation plans, leaving them less prepared to deal with disasters when disaster strikes.
Experts estimate that in the United States alone, 1 to 4% of GDP per year could be lost from effects such as mortality, labor and energy under high emissions scenarios by 2040 (see figure 1). Meanwhile, other researches have determined that benefits would outweigh costs in most instances.
Of course, our gains depend on our ability to reduce emissions. Luckily, technology and capital exist that could hasten this transition more quickly than many assume; companies like PG&E and GE have shown this by becoming profitable while doing what’s right – the key being setting in place policies, markets, infrastructure that support this goal; the longer we wait, the higher will be the costs involved.
2. Decreased productivity
Climate change’s greatest cost may be its decreased productivity. Warmer temperatures lead to less work being accomplished, particularly by those employed in labor-intensive fields like agriculture and construction. Furthermore, hotter weather often results in less productive crops which in turn leads to crop failure, further diminishing output.
These effects should be more acutely felt in lower-income regions and further compounded by geographic disadvantage. Low-income communities also tend to be less mobile when looking for employment elsewhere (Hardy et al. 2018), thus compounding losses even further (Hardy et al. 2019). Furthermore, economic damage due to climate change will likely be concentrated more heavily in regions already vulnerable to natural disasters, such as the southern United States (Muro et al. 2019).
The economic cost of climate change varies significantly depending on emissions levels and its effects in various regions, often made more complex by what economists refer to as the ‘discount rate,’ which measures future events at face value. Economists have struggled to incorporate discount rates into models properly which has led to differing estimates of its cost.
As one example, the 2006 “Stern Report” aroused considerable skepticism among many experts, such as Richard Tol. Tol noted that it relied on only negative impact studies without providing an appropriate cost-benefit analysis.
Stern Report was flawed in many respects, yet its core premise that climate change will incur substantial costs has become widely accepted. Furthermore, it may even be beneficial to limit emissions at a level which avoids most harm from climate change as this would be more economically productive than continuing to add greenhouse gases to our atmosphere.
3. Unemployment
Climate change will threaten lives and property while simultaneously decreasing economic activity through damaged infrastructure and decreased agricultural yields. These effects will be felt across every sector of the economy–energy, finance and construction to agriculture, forestry and fisheries; they will especially sting those living in lower income areas where geographic disadvantage and racial discrimination compound the damage further.
Rhodium Group conducted research that concluded Southern counties will experience climate damage equivalent to 2-20% of their county income under high emissions scenarios, making these damages especially challenging to overcome due to limited local resources and exposure. African Americans will likely bear more of these costs as their lives become increasingly susceptible to the effects of climate change.
Recent research conducted by the Swiss Re Institute revealed that nations’ economic risks from climate risks can vary substantially across regions and sectors, due to certain regions being more exposed than others to weather-related impacts such as heat stress or decreased agricultural productivity. For instance, counties located along the Southern coastline will lose significant labor hours annually due to heat exposure; this equates to approximately $160 billion lost wages annually.
Higher-income countries will see less economic repercussions as their economies experience greater GDP growth to make up for any lost activity. These findings point out issues of fairness as lower-income nations have contributed more emissions leading to climate change; as a result, they suffer more of its consequences than do higher-income nations.
4. Displacement
Climate change threatens many aspects of our daily lives, from water and energy supplies to food, wildlife and ecosystem services. Unfortunately, its impacts aren’t distributed equally – lower-income countries tend to experience greater displacement caused by climate-related disasters than higher income countries do, leaving less opportunity to relocate somewhere they can survive and prosper.
Climate-induced displacement brings with it additional economic costs and health risks, such as exposure to urban crowding and trauma, lack of safe drinking water sources, poverty and social unrest, transmission of insect-borne diseases like dengue fever or West Nile virus transmission (International Institute for Environment and Development 2019). All these issues further diminish prospects of those displaced due to climate related problems.
Climate change’s impacts are projected to vary significantly across countries and counties (see figure 1). This variance stems from differences in vulnerability as well as nations’ capabilities to combat warming through technology or policy choices.
Higher-income countries generally boast more resilient economies that can better withstand climate change impacts than lower-income nations, which demonstrates in mortality risk projections: low-income nations will be particularly affected by increasing temperatures while wealthier nations may be better at mitigating them.
These nuances are difficult to capture using economic analysis. Measuring climate change-related damages is especially complex since its impacts are hard to measure against market transactions or GDP figures; non-market damages like biodiversity loss require additional measures of uncertainty in order to be assessed properly.
5. Natural disasters
Climate change costs can be measured in various ways economically. Monetary measures tend to be best-suited for market impacts that directly impact GDP; however, non-market effects and indirect effects should not be neglected either.
United States hurricane damages were estimated to total $415 billion in 2017. Other costly natural disasters include wildfires and heatwaves – often directly caused by climate change as warmer temperatures and higher sea levels increase their likelihood.
Environment disasters have increased worldwide in both frequency and severity due to climate change; however, they’re also pushing ecosystems closer and closer to breaking point.
Storms, floods, landslides, droughts and extreme heatwaves are the most prevalent natural disasters, while slow disasters like increased soil salinity or decreased crop yields take longer to manifest their effects – though all are being made worse by climate change.
Studies conducted by the United Nations Environment Programme and World Meteorological Organization revealed that between 1970 and 2019, weather, climate or water-related hazards caused over two million deaths and $3.64 trillion in economic losses – many worsened by climate change – which makes reducing emissions essential in protecting coastal environments and maintaining safety standards.
Climate damage will disproportionately harm low-income communities in the US, which are already facing disadvantage due to factors like geography and segregation. A high emission scenario forecasts climate damage equal to 7 percent of their GDP in these counties’ bottom fifth by income; this will substantially erode local economies while compounding national inequality.
