Climate Impact Lab: Quantifying Future Costs of Climate Change
Unmitigated climate change will make the United States poorer and more unequal, with states in the South and lower Midwest suffering the most as economic opportunity travels northward and westward. Those were the initial findings of a detailed assessment conducted by the Climate Impact Lab, a consortium of climate scientists, economists and data engineers at Rhodium Group, University of California Berkeley, University of Chicago and Rutgers University.
Our team’s first published peer-reviewed research, “Estimating Economic Damage from Climate Change in the United States,” aimed to raise awareness of how the phenomenon will exacerbate income inequality. The paper, published in the journal Science in June 2017, ranked No. 55 on a list of the most most discussed and shared academic papers of 2017.
The research showed the poorest third of U.S. counties are projected to sustain economic damages costing as much as 20 percent of their income if warming proceeds unabated.
Beyond those findings, the paper represented a breakthrough for the field of climate economics. As The Atlantic reported:
Previously, the best financial forecasts of climate change approximated damages for the entire country at once. This new study worked from the bottom up, building its model from dozens of microeconomic studies into how climate change is already affecting regional economies across the United States. Every algorithm in the model emerges from a previously observed relationship in real-world data. … All in all, the study’s assessments should be interpreted as the most rigorous attempt ever to describe what global warming will cost the United States in a ‘normal’ world.
Harnessing advances in big data and computing, the Climate Impact Lab assessed how a wide range of economic activity — agriculture, crime, health, energy demand, labor and coastal communities — will be affected by higher temperatures, changing rainfall, rising seas and intensifying hurricanes. It is the first study to provide a rigorous, evidence-based, probabilistic estimate of the cost of climate change to the U.S. economy.
The most important insight from the research, made possible by our team’s ability to project damages at the local level, is that costs will not be evenly spread. Nationwide estimates average out important location-specific or industry-specific information. States in the South and lower Midwest, which tend to be poor and hot already, have the most to lose, while some parts of New England and the Northwest could see net gains. Increased heat-related mortality, declining crop yields, and reduced labor productivity across the South could devastate local economies. Colder and richer counties along the northern border and in the Rockies may actually benefit, as health, agriculture yields and energy costs improve due to a reduction in the number of extremely cold days.Explore how climate will impact where you live using our interactive Climate Impact Map
In the months ahead, the research team is working to expand its work to encompass all regions of the world. The Climate Impact Lab is also working to incorporate a much longer historical period into its findings, which will help identify changes over an expanded time span, including climate change that is already evident by the end of the 20th century.