Climate change likely to be costly for Washington residents

Written with Peter Dorman and Hart Hodges for The Olympian, March 12, 2009

Most people would not be very happy if they had to devote a bigger chunk of their household income every year to a problem that could have been mitigated years earlier for a fraction of the cost. Yet, that scenario seems likely if the global society fails to adopt policies to reduce emissions of carbon and other greenhouse gases.

A number of bills have been introduced in the current legislative session intended to reduce the state’s carbon emissions. These bills have, understandably, resulted in heated discussion about whether it is better to act now to mitigate the impacts of climate change or to respond to the changes later.

A new report, prepared by The Program on Climate Economics of the Climate Leadership Initiative at the University of Oregon offers some startling projections of the cost of climate change to Washingtonians.

Staff at the UO climate economics program and ECONorthwest, an economics consulting firm, analyzed what the costs would be for Washington households of not reducing carbon emissions and allowing climate change to proceed uncontrolled. We are members of the Program’s steering committee and have recently reviewed the report.

The report suggests that uncontrolled climate change would impose costs on Washington in a number of ways. For example, rising temperatures will produce more asthma and result in higher health care costs in general. Rising temperatures will also result in more wildfires and could result in more frequent winter floods, which will damage buildings and diminish property values. Moreover, productivity could decline in important sectors such as agriculture.

The authors of the study note that there will be benefits from a warmer climate, such as fewer health problems related to cold weather and longer growing seasons in agriculture. But the research team concluded the net impact in Washington would be negative in these areas. The team also concluded that the net impact on supplies of clean water and various environmental services – vital to our economy and quality of life – would be negative.

Looking at these relatively easy to quantify impacts of climate change, the research team concluded that climate change might cost the State of Washington $3.8 billion annually by 2020, or more than 2 percent of current median household income. These costs rise to more than $6.5 billion in 2040 and to $12.9 billion by 2080.

These numbers are large, but also – purposefully – conservative. The research team assessed only the costs of climate-change related flood and storm damage, changes in food production, increased wildfires, health, and energy related expenditures, and a few other issues. Due to insufficient data, the team did not assess the economic effects of coping with more variable weather, increased pathogens, and about fifteen other likely direct costs of climate change.

The team also did not assess costs imposed on Washington families and businesses from climate impacts occurring outside the state. Reduced agricultural output in hotter, drier regions of the nation, for example, is likely to raise food costs for Washington households. Moreover, the team did not consider in this analysis the risk of far larger, even catastrophic effects—threats that are more serious than many we insure against today to protect our homes and businesses.

Although a few of the costs identified can be somewhat mitigated by state action, the majority cannot be prevented by emissions reductions in Washington alone. The state must be part of a concerted global effort to slash emissions to reduce the impacts of climate change.  Of course, a global effort requires that everyone contribute, including our state.

In the end, the key message from the report is not the exact cost – but rather the fact that the costs appear to be large and will increase significantly over time. We recognize there is uncertainty surrounding the estimates and that acting now to mitigate the impacts of climate change will be costly. But the numbers in the report suggest not acting could be very, very costly. Put another way, the longer we and others wait to adopt strong emission reduction policies, the more costly climate change will be.

Katie Baird is an Associate Professor of Economics at the University of Washington, Tacoma; Peter Dorman is a faculty member of the Political Economy Program at The Evergreen State College; and Hart Hodges is the Director of the Center for Economic and Business Research and Associate Professor of Economics at Western Washington University. They are all members of the University of Oregon Climate Leadership Initiative’s Program on Climate Economics Steering Committee.