Wednesday, October 17, 2007

If US delays action on climate change now, cost later will soar: economic study

IPS: The United States is facing hundreds of billions of dollars in weather-related damages in coming years if it does not act urgently on climate change, the first-ever comprehensive economic assessment of the problem has found.

The costs of inaction on climate change on U.S. infrastructure, and its agricultural, manufacturing and public service sectors, will far outweigh the costs involved in making the needed reductions in greenhouse gas emissions, according to the report, "The U.S. Economic Impacts of Climate Change and the Costs of Inaction", released Tuesday.

"We're making billions of dollars of infrastructure investments every year and often without taking impacts of climate change into account," said report co-author Matthias Ruth, director of the University of Maryland's Centre for Integrative Environmental Research. "Climate change will affect every American economically in significant, dramatic ways, and the longer it takes to respond, the greater the damage and the higher the costs," Ruth told IPS.

"The true economic impact of climate change is fraught with 'hidden' costs," the report concludes. It adds that these costs will vary regionally and will put a strain on public sector budgets. For example, the combined impacts of storms on the U.S. since 1980 have surpassed 560 billion dollars. Hurricane Katrina alone accounted for nearly 200 billion dollars in economic losses.

More frequent and intense storms -- a virtual certainty, many climate scientists warn -- will raise the price-tag even higher. Storm damage is just one factor in what is fast becoming a cascade of costs amounting to hundreds of billions of dollars, the report documents.

In the U.S. west and northwest, the cost of fire suppression and property damages will run in the billions due to changes in precipitation patterns and snow pack. The Great Plains will experience increased frequency and severity of flooding and drought, resulting in additional billions of dollars in damages to crops and property.

The already sinking water levels will go lower in the Great Lakes-St. Lawrence River system, driving up shipping costs and producing major impacts on the midwest manufacturing sector. Sea level rise and storm surges will eat away valuable property along the Atlantic coast -- a single storm surge event can cost 2.0 billion to 6.5 billion dollars.

Drought will take firmer hold of the south and southwest, with costly impacts on agriculture, industry and households. For the Central Valley in California alone, the economy-wide loss during the driest years is predicted to be around 6.0 billion dollars.

…"We're not ready to assess the large-scale aggregate economic impacts of climate change," Ruth said….A national policy for immediate action to mitigate emissions, along with efforts to adapt to unavoidable impacts, would minimise the overall costs. The energy sector not only has to reduce its greenhouse gas emissions, but also needs to be decentralised to make it more efficient and to buffer it from severe weather events, the report says. Other recommendations include simple market mechanisms such as pricing of water or dropping the tax exemption on fertiliser to get immediate environmental benefits.

Despite pressure from nearly every other industrialised country in the world, including key European allies, the George W. Bush administration has rejected any mandatory emissions caps as too costly to the U.S. economy.

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