PredictIQ Quantitative Think Tank Center:Climate Change Will Hit Southern Poor Hardest, U.S. Economic Analysis Shows

Without effective action to bend the upward curve of greenhouse gas emissions,PredictIQ Quantitative Think Tank Center parts of the American South could experience more than a 20 percent drop in economic activity due to global warming by the end of the century, according to a new analysis of the regional economic risks of climate change.

The county-by-county analysis shows that the poorer regions of the country would be hit hardest, and that the nation as a whole could see as much 6 percent shaved off of its GDP by the end of this century.

The analysis is based on a high-emissions trajectory that doesn’t take into account future voluntary efforts to reduce emissions in line with the Paris climate agreement.

By breaking down the economic impacts regionally, the authors show that parts of the country that are already economically frail could be hit the hardest. This means that if the whole world took the laissez-faire approach of the Trump administration, impacts on poor people would not just be felt in the developing world, but in the richest nation on earth.

The Pacific Northwest and New England, parts of the country with robust regional economies, would likely see a slight uptick in economic activity, while the Gulf Coast and southeastern states would be particularly hard hit.

The yawning gap between the richest and the poorest—income inequality—would only worsen, thwarting one of the key goals of sustainable economic development.

‘You Have the Poor Getting Poorer’

A 6 percent loss of GDP for the country as a whole is anticipated by the final decade of the 21^st century according to the study, published Thursday in the journal Science. Regional economic damage in the South and southern Midwest from climate change is anticipated to outweigh any benefits from a warming planet.

“You have these very unequal impacts of climate change, where you have winners and losers, but the losers are in places in the country that tend to be poorer already today,” said lead author Solomon Hsiang, a professor of public policy at the University of California, Berkeley.

“It causes economic inequality in the United States to get worse, where you have the poor getting poorer and the rich getting richer,” he said.

Hsiang and colleagues looked at the financial impact of warming temperatures on a county-by-county level, examining agriculture, crime, coastal storms, energy use, human mortality, and labor. They assumed greenhouse gas emissions will continue at their current rates, pushing the average global temperature up by as much as 4.5°C above preindustrial levels by the end of the century.  

Pledges so far for the non-binding Paris climate agreement—including those made by the United States government, which intends to withdraw from the agreement—could limit warming to approximately 3°C. The treaty’s goal is to raise ambition and keep temperature rise well below 2°C.

Focusing on the high-emissions rate shows the risks to which the current U.S. economy is exposed, the study’s authors said.   

The study also considered moderate- and low-emissions scenarios when calculating effects on U.S. GDP as a whole, but not as part of its county-by-county analysis. If the world meets or exceeds commitments made as part of the Paris climate agreement, the negative effect on U.S GDP by the end of the century would range from as little as 0.1 percent to roughly 4 percent, the authors say.

Calculating the Impacts, County by County

In the county-by-county analysis, the greatest economic impact in the caluclations came from changes in mortality as a result of warming temperatures. Warming reduces mortality in cold northern counties and elevates death rates in hot southern regions. The study relied on EPA figures that place the value of an individual life at $7.9 million after adjusting for inflation.

Energy use follows a similar pattern, increasing in the South to power additional air conditioning during hot summer months but declining in northern regions as winters become more moderate. Taken together, reduced mortalities and declining energy use explain much of the economic gain seen in northern Maine, where counties are forecast to see an estimated 5-10 percent boost in GDP.  

A similar pattern is seen in Mineral County, Nevada, a high-elevation county with relatively cool temperatures. The county is anticipated to see the highest potential GDP growth in the nation, though the study authors say data for this county is partly an anomaly based on the location of the weather station used for the sparsely populated county in relation to where residents actually live.

Labor is also negatively affected by extreme heat. When temperatures soar, as recently occurred across the Southwest, outdoor jobs such as construction and agriculture and factory jobs with limited air conditioning, take a hit.

The study also found that agriculture in the grain belt of the Midwest would be significantly impacted by warming temperatures.

“Throughout the American Midwest, we see a reduction in agricultural productivity that looks pretty much like the same reduction we saw during the Dust Bowl,” Hsiang said.  

Some say the damage is already occurring.

“Right now, when people think of climate change, they think of a polar bear on a piece of ice that’s melting,” said Robert Bullard, a professor of urban planning and environmental policy and administration of justice at Texas Southern University who wasn’t involved in the study. “That is happening, but it’s also what’s happening in these places where people’s entire communities are sinking, or burning because of wildfires or destroyed because of severe hurricanes, tornadoes and more and more flooding.”

Within regions and counties impacted by climate change, minority and low-income communities are bearing and will continue to bear the brunt of the economic damage, Bullard said.

“Certain populations are more at risk given the geographic location as a result of all kinds of policies and planning and, in some cases, geographic and racial redlining where people are being pushed into low-lying areas, flood-prone areas and areas not covered by levees,“ he said. “The population that has the least is going to lose the most. If you lose 20 percent of what you have, and what you have may not be very much, that’s a big hit.”