24 June 2014
By Alexandra Branscombe
WASHINGTON, DC – Up to $106 billion worth of coastal homes and businesses in the U.S. are likely to be underwater by the year 2050 due to rising sea levels, and up to $507 billion in coastal property will likely be below sea level by 2100, according to a new report released today. The report is based in part on a new study on sea level rise in Earth’s Future, a journal of the American Geophysical Union.
The analysis by the Risky Business Project of the economic risks of climate change aims to help business owners, investors and infrastructure planners assess the risk climate change poses to their enterprises, and help them reduce their exposure to the worst economic risks.
The report, “Risky Business: The Economic Risk of Climate Change to the United States,” is the first to look at the economic risks of climate change for specific industries and locations across the United States, said the report’s authors. It focuses specifically on businesses and private homes in coastal areas, and the agriculture and energy sectors.
While previous studies have calculated global numbers for the economic toll of climate change on the world, the new report zooms in on different areas of the U.S. The report looks at local factors, like infrastructure and regional economies, to provide a view of the economic consequences of climate change down to the county or city level.
“The basic truth about climate change is that it is inherently local,” said Kate Gordon, the Executive Director of The Risky Business Project, an independent initiative created to calculate the economic risk associated with climate change.
In terms of economic impact, “aggregating up to the national level with a country this big and this diverse masks nearly all the impacts of climate change,” she said during a panel presentation at the American Geophysical Union’s Science Policy Conference on June 17.
The science behind coastal risk
The report’s findings about the economic impact of climate change on coastal communities draws from a new study on local sea level rise projections for U.S. cities that has been accepted for publication in Earth’s Future.
The paper introduces a new method for predicting sea level rise and presents projections of that rise in specific cities around the country, said Robert Kopp, a climate scientist at Rutgers University in New Jersey and lead author of the study.
A combination of changes to the land, ocean and ice contribute to local sea level rise, said Kopp, who is also the lead scientist for the technical report underlying the Risky Business Project report. The new method takes into account both local factors, like the type of bedrock or tectonic movement under a city, and much larger scale factors, such as the ocean expanding from absorbing more heat and melting ice sheets. From this information, the study’s authors calculated new global sea level projections and how much sea level rise will impact a particular coastline, he said.
For example, sea levels in New York City will likely rise 2.3 to 4.2 feet over the next century. This is higher than sea levels are expected to rise globally, primarily because the land under New York City is still sinking in response to the loss of North American ice sheets millennia ago. Sea levels around New York City might also rise from changes in the Gulf Stream and the melting of the West Antarctic ice sheet, according to the study. In other cities, like Key West, Florida, the projected sea level rise will be closer to the global average of .6 to 3.6 feet.
The study also calculates how sea level rise will affect the expected number of flood events for different cities. In Key West, for example, large floods that until recently would occur only once per decade will take place during 81 of the 100 years between 2000 and 2100, the study projects. During the same period, New York City is expected to see “10-year floods” about 50 times.
The economic cost
For the Risky Business Project report, Kopp and his colleagues used the new sea level rise projections, and the number of times cities around the country will flood in the coming decades, along with an insurance industry model, to come up with the amount of economic damage the increased water will cause coastal properties.
In New York City, the tally averages $6 billion to $9 billion a year over the remainder of the 21st century. That is on top of damage caused by major coastal storms, such as the $19 billion Hurricane Sandy cost New York City.
Even a moderate increase in sea level in Florida would likely result in $23 billion of existing property being underwater by 2050. There is a 1 percent chance that more than $681 billion in property in the state will be submerged by the end of the century – higher than the Obama administration’s proposed budget for the Department of Defense in 2015.
A joint partnership of Bloomberg Philanthropies, the Paulson Institute, and TomKat Charitable Trust created The Risky Business Project last fall to perform an independent risk assessment of climate change in the U.S. Former New York City Mayor Michael Bloomberg, former U.S. Secretary of the Treasury Hank Paulson, and climate activist Tom Steyer jointly chair the group.
In addition to the economic risk climate change will have on the coasts, the report calculates the risk global warming poses to the agriculture and energy sectors down to a local level, Kopp said. The report also looks at how climate change will contribute to heat-related deaths, crime, and decreasing labor productivity.
“We chose three sectors where there are large capital expenditures, where those decisions being made today will be affected by climate impacts in the next couple decades and beyond,” Gordon said. “People in those sectors are making place-based investment and infrastructure decisions right now.
For example, the report looked at how local energy demand from increased air conditioning usage in the South will overwhelm electrical generating capacity and lead to the construction of more power plants in that region. It also projected how climate change will cause shifting agricultural patterns across the U.S. The Midwest will likely see up to a 50 percent loss of crop yields by the end of the century, while the upper Great Plains region could see increases in crop productivity during the same period.
“No one lives at the global mean for climate change,” said Kopp. “If you live in New York, you want to know how it applies to your city, and if you grow crops in Illinois, you will care more about your crop yields than the global mean.”
– Alexandra Branscombe is a science writing intern in AGU’s Public Information department