Infrastructure, Climate Change and the Economy: Part 2 - The Cost of Climate Change

February 11, 2011: With the global climate shifting, national, state and local governments and communities are beginning to feel the effects of catastrophic weather (Australia's flooding and the rise of global food prices). In 2009, the University of Oregon released a study looking at the cost of environmental change to the communities in state of Washington. The report found that "If nothing is done to substantially reduce greenhouse gas emissions, Washington is likely to experience some $3.8 billion in associated annual costs -- including $1.3 billion in health related costs alone."


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Compiled by the University of Oregon's Climate Leadership Initiative's Program on Climate Economics by ECONorthwest and guided by a steering committee of 19 academic and private economists from the Pacific Northwest and other west coast states, the report, based on an earlier 2006 report said that "under a 'business-as-usual' approach to climate change" the cost of environmental, economic and health costs to the region "would jump four-fold to $12.9 billion by 2080."

The report's lead author Ernie Niemi said the impacts of doing nothing to prepare for and to addresses changes in the climate and the rise of greenhouse gas emissions "will be seen as an increase in illness, lost productivity and increases in premature deaths."

Furthermore, to begin to understand some of the changes and effects on infrastructure, the Department of Transportation released a first phase report in 2008 looking at the effects of climate change to the communities in the Gulf Coast region and the impacts of rising water levels and rising air temperatures. In addition to that report, the DoT's Transportation and Climate Change Clearinghouse has a resource page with reports on the effects of climate change to coastal communities.

And in 2008, the University of Maryland's Center for Integrative Environmental Research released a report which found that "In the West and Northwest, climate change is expected to alter precipitation patterns and snow pack, thereby increasing the risk of forest fires. Forest fires cost billions of dollars to suppress ... The Oakland, California fire of 1991 and the fires in San Diego and San Bernadino Counties in 2003 each cost over $2 billion. Every year for the past four years, over 7 million acres of forests in the National Forest System have burned with annual suppression costs of $1.3 billion or more."

Recently in a story in the BBC which reported that a study by the Proceedings of the National Academy of Sciences (PNAS) found rising sea levels would hurt the United Kingdom's economy. And because there are questions about the cost of adapting to climate change and the implications of inaction, the University of Minnesota's Heller-Hurwicz Economics Institute held its premier event "Addressing Climate Change: Economic Perspectives on Pricing Environmental Risk".

Founding HHEI Director and Professor of Economics V.V. Chari said, "Climate change is perhaps the seminal issue that will confront the world in the 21st century. ... Solving this problem effectively and efficiently will require us to harness the power of markets in channeling private incentives towards socially beneficial ends."

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