Enhanced Regional Inequalities
A new study from the Climate Impact Lab, a consortium of 25 economists and policy experts from across the country, shows that the American South will be more affected by climate change than any other region in the United States. The analysis also shows that the effects of climate change will transfer wealth from poor counties in the Midwest and Southeast to wealthier counties on the coasts and in the Northeast. This will aggravate the trend of economic inequality in the U.S. that already exists.
States that are already warm or hot such as Florida, Arizona, Texas, and the states of the Deep South will therefore lose income potential when jobs and other benefits migrate to cooler areas. Counties in states that border the Gulf of Mexico in particular are likely to experience the equivalent of a 20 percent, county-level income tax solely attributable to climate change. This “tax” will come in the form of skyrocketing summer energy costs, struggling harvests, rising seas that engulf real estate, and heatwaves that trigger public health crises and inflate mortality rates.
The U.S. GDP will decrease by around 1.2 percent for every additional degree Celsius of warming. Although the Paris Agreement terms would allow a rise of four degrees Celsius by the end of this century, but even if we didn't surpass that limit, the GDP of our country will still contract by 1.6 to 5.6 percent. If the Paris terms are not met, the damage will be more severe. (To put this into perspective, the biggest drop in GDP during the Great Recession was 6.3 percent in the fourth quarter of 2008. It took years to recover from the drop, and the ramifications were felt all over the world.)
The study is an exhaustive, detailed effort, which models every single day of weather in each county in the U.S. during the 21st century in order to simulate the economic costs of climate change. It is by far the most in-depth economic assessment of human-caused climate change to date. It is also highly significant because it takes a bottom-up approach, building on multiple microeconomic studies with regional economic data to provide a more detailed picture of the future of the U.S.
Actual Risks May Be Worse
As detailed as the study is, the team omitted many serious risks of climate change because they lacked sufficiently detailed data to include them. For example, although the researchers could agree that biodiversity and other “non-market goods” are important, without a concrete way to assess the costs of those losses they didn't feel they could include them in the study. They also omitted increased chance of “tail risks," which are unlikely yet catastrophic events like mass migration, violent civil or military conflicts, massive droughts, or major polar ice collapses.
The study’s economic projections also end in 2099. While certain regions in the Northern regions of the U.S. might initially benefit from the pain the Southern states are feeling thanks to climate change, that won't last. The authors of the study point out that the North will also experience more severe economic damages should climate change continue unchecked into the next century.