Climate change to damage U.S. economy, increase inequality

The Office of Communications ・ High Meadows Environmental Institute

Unmitigated climate change could make the United States poorer and more unequal, according to a study in the journal Science that includes PEI researchers. The poorest third of counties could sustain economic damage costing as much as 20 percent of their income by the end of the century if warming proceeds unabated. States in the South and lower Midwest, which tend to be poor and hot already, will lose the most, with economic opportunity traveling northward and westward. Colder and richer counties along the northern border and in the Rockies could benefit the most as health, agriculture and energy costs are projected to improve.

Unmitigated climate change could make the United States poorer and more unequal, according to a study published June 29 in the journal Science. The poorest third of counties could sustain economic damage costing as much as 20 percent of their income by the end of the century if warming proceeds unabated.

States in the South and lower Midwest, which tend to be poor and hot already, will lose the most, with economic opportunity traveling northward and westward. Colder and richer counties along the northern border and in the Rockies could benefit the most as health, agriculture and energy costs are projected to improve.

This map shows county-level annual damages in a median scenario for climate during 2080-2099 under business-as-usual emissions trajectory. Negative damages indicate economic benefits.

Overall, the study — whose authors include Michael Oppenheimer, Princeton University’s Albert G. Milbank Professor of Geosciences and International Affairs and the Princeton Environmental Institute, and Ph.D. student DJ Rasmussen — projects losses, economic restructuring and widening inequality. The study was led by Solomon Hsiang of the University of California-Berkeley, Robert Kopp of Rutgers University-New Brunswick, Amir Jina of the University of Chicago, and James Rising, also of UC-Berkeley. Hsiang and Kopp once worked with Oppenheimer as postdoctoral fellows in the Woodrow Wilson School of Public and International AffairsProgram in Science, Technology and Environmental Policy, where Rasmussen is studying.

“Unmitigated climate change will be very expensive for huge regions of the United States,” said Hsiang, the Chancellor’s Associate Professor of Public Policy at UC-Berkeley. “If we continue on the current path, our analysis indicates it may result in the largest transfer of wealth from the poor to the rich in the country’s history.”

The pioneering study may settle the debate over whether climate change will help or hurt the U.S. economy, being the first to use state-of-the-art statistical methods and 116 climate projections developed by scientists around the world to price the impacts of climate change the way the insurance industry or an investor would, comparing risks and rewards.

“These new empirical approaches have revolutionized the estimation of climate impacts in less than a decade, and this study is the culmination of the first comprehensive application of these methods to the U.S. economy,” Oppenheimer said.