Groundbreaking study ties climate to state economies

Sandia News Releases: A climate-change study at Sandia National Laboratories that models the near-term effects of declining rainfall in each of the 48 U.S. continental states makes clear the economic toll that could occur unless an appropriate amount of initial investment — a kind of upfront insurance payment — is made to forestall much larger economic problems down the road.

Why tie climate change to economics? “Absent any idea of costs, the need to address climate change seems remote and has a diluted sense of urgency,” study lead George Backus said.

The Sandia study uses probability techniques familiar to insurance companies. Tables place dollar estimates on the effects of climate change in the absence of mitigation or other policy initiatives over the 2010-2050 time period.

…“On the one hand, there’s a lot of uncertainty in quantifying climate change,” said Backus. “Everyone sees that. It’s this uncertainty that presents the greatest difficulty for policy makers. If society knew how change would exactly unfold, we could undertake adaptation and mitigation responses.” Yet, Backus and his team wrote in the introduction to their paper, in other areas of interest to society, “despite uncertainty about the future, cost-benefit analyses are conducted on a daily basis as aids for policymakers on issues of critical importance to the nation such as health care, social security and defense.”

…California, the Pacific Northwest and Colorado, for example, are the only states in the study that seem to benefit overall from the variation in precipitation that climate change might engender. That is because population would leave those states whose economy is hit hardest by reduced water availability, moving into and stimulating the economies of the less-affected states.

While the uncertainty in climate change predictions are often given as a reason by those skeptical of climate change to ignore the problem because of the wide range of model results, the study’s authors take a point of view more common to insurance companies. In insurance, Backus said, greater uncertainty means greater risk. In such cases, insurance companies merely reflect the higher risk in a higher insurance premium….

Columbia River in Hanford Reach National Monument, Washington, shot by the Fish and Wildlife Service