Dramatic Difference in Damage Potential of Climate Change by Region in the U.S.

Damage function is the technical term used by economists in assessing the effects of weather-driven damages to the economic performance of a given region. With advances in the predictive capabilities of models of climate change, it is now possible to estimated economic impacts with increasing precision and refinement by region. A recent study in the U.S. modelled the future potential for weather driven damages to agriculture, crime, health, energy demand, labor and coastal communities and then predicted the overall effect on GDP by county in the U.S.

Near the end of the century, future costs of climate change damage are estimated at 1.2% of GDP for each degree C of average global surface warming above pre-industrial temperatures. A business as usual scenario of unabated emissions will result in about 5°C of surface warming at a cost to the U.S. 6% of GDP annually between 2080 and 2100.
What is perhaps more striking than the overall costs, is the extreme variation in the impacts of climate change between regions. Counties in southern states are at considerably greater risk with projected costs generally in the range of 10-30% of GDP. This contrasts with several northern states that are predicted to experience a net benefit from changing weather patterns based on longer, warmer growing seasons and thus greater production from agriculture and other savings associated with shorter winters. Ironically, political indifference to climate change tends to be concentrated in the most at risk regions of the U.S.

As the predictive models for the impacts of changing weather patterns continues to be refined, there is a tendency to focus attention on local risks and needs for adaptations. In northern, in-land regions of North America, Europe and Asia, effective adaptations could minimize risks and costs associated with changing weather patterns. In some regions, successful adaptations could lead to net economic benefits.

However, a focus on local vulnerabilities ignores the broader global reality. The situation of disproportionate damage potential between southern and norther regions in the U.S. is magnified on the global scale. Africa, small islands, coastal populations and lower latitude regions are the most climate vulnerable, at risk regions on earth. The magnitude of the damage potential in climate vulnerable countries, grossly exceeds any possible benefit that could occur within higher latitude, in-land regions of the globe.

Greenhouse gases are well mixed in the atmosphere. Under a business as usual scenario of an indefinite continuation of current practices, emissions from a coal burning power plant in Saskatchewan will contribute to costly damage and human misery including failures of food and water supply in Nigeria while having much less of a direct impact in the prairie regions of Canada.

The moral and economic justification for progressive decarbonization of economic sectors must come from an assessment of global impacts and cannot be derailed by misplaced tendencies for cost/benefit analysis to be overly focus on local issues.

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