| The business-disruption risks of extreme heat and sea-level rise over the 21st century are measured in a new report, “Risky Business: The Economic Risks of Climate Change in the United States.” The authors say its findings show that the worst risks can still be avoided by early investment and immediate action to reduce pollution that causes global warning. But not everyone is convinced – postings widely across the Internet have resulted in vicious attacks on the authors and challenges to the veracity of some of the facts.
Not that the authors don’t have track records, for good or ill. Hank Paulson, former Treasury Secretary under George W. Bush, Michael Bloomberg, former mayor of New York, and Thomas Steyer, former senior managing member of Farallon Capital Management, form the author troika that leads the charge. The rest of the committee is made up of recognizable names from both political parties. One notable participant, who to date hasn’t had similar marquee status, is Gregory Page, executive chair of agribusiness giant Cargill Inc., and its former CEO.
The 56-page report is replete with color-coded maps, broken down to the county level, showing the likelihood of the increase in days of 95-degree-plus heat for the U.S., including Alaska and Hawaii. Click on the 2020-2039 button and you’ll see mostly green, indicating a number range of hot days. Click on 2040-2059, and in most cases, yellow and orange start creeping in from the south. The third button, 2080-2099, brings the tide of yellow and orange further north, with red and dark red advancing at the southernmost end of the maps.
The report illustrates empirically-derived estimates of the fiscal impact of the advancing hot weather on key economic sectors, with the intent of helping business, investors, households and policymakers understand the potential of climate changes that disrupt business. It breaks down events into those most likely to occur, as well as low-probability, high-impact events, such as Hurricane Sandy in 2012, or Tropical Storm Irene in 2011.
Ironically, New Englanders and much of the northern U.S. got a taste of climate extremes on the other end of the temperature scale last winter, when a cold snap lasted for weeks. Regional and super-regional economies were stalled as transportation almost literally froze, and the impact of the cold snap lasted in New England lingered long after the weather warmed up, in the form of delayed market activity in housing sales. And we’ve also already gotten a preview of rising sea levels in the form of more powerful storm surges.
Too Hot To Function
The Risky Business report notes the business-interruption impact of heat waves in which the heat-humidity index (HHSI) becomes too high for people to work outdoors. Most affected would be the Plains States, which have both agriculture and energy production, which, if nothing is done, would see seven to 26 days above 95 degrees by 2050 and 20 to 75 additional days of extreme heat. The disclaimer that constantly runs through the report is: “if we continue on our current path …”
The authors state that between $66 billion and $106 billion of existing coastal property will be below sea level by 2050, growing to between $238 billion and $507 billion by 2100. They estimate a one in 20 chance that by 2100, it could be worse, with more than $701 billion of existing coastal property below sea level by century’s end. Property losses are expected to be higher on the Southeast and Atlantic coasts. Also, by midcentury, the country is likely to experience 27 to 50 days each year with temperatures above 95 degrees Fahrenheit, more than three times what we’ve had over the last 30 years.
The report, while proclaimed by its creators as the first of its kind, is hardly the first recent call to action on the global-warming topic. The report doesn’t advocate any one approach to climate change modification; instead, it calls for industrial and regional ideas, saying that these will be a better long-term solution to the environmental challenges we face than having government come in and rebuild storm-risk-prone areas again and again – or to repeatedly claim heat-struck regions and industries as disaster areas.
Email: coneill@thewarrengroup.com
