Climate Change Facts and Effect on the Economy

What has climate change cost us? What's being done?

A FEMA representative surveys Hurricane Sandy damage in the Rockaways, January 17, 2013 in the Queens borough of New York
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Robert Nickelsberg / Getty Images

Climate change is the disruption in the long-term seasonal weather patterns caused by global warming. Data released in 2020 shows that the average global surface temperature has risen over 1 degree Celsius—about 2 degrees Fahrenheit—since the pre-industrial 19th century. That’s faster than at any other time in the Earth’s history—roughly eight times faster than the global warming that occurred after the ice ages.

Temperatures aren't rising uniformly. The temperatures in the Arctic and Antarctic are rising faster than those in temperate and tropical areas. As a result, portions of the polar vortex have split off and blocked the jet stream. That’s a river of wind high in the atmosphere that races from west to east at speeds up to 275 miles an hour. It’s made the jet stream wobble.

Climate change should be called climate destabilization. It's created more extreme and frequent blizzards, heat waves, and other forms of extreme weather. This extreme category includes tornados, wildfires, hurricanes, blizzards, floods and landslides, heat waves, and droughts. It also includes violent storms, whether they be dust, hail, rain, snow, or ice.

A 2017 poll showed that 55% of Americans believe that climate change made hurricanes worse. And among adult respondents to a 2019 poll who lived in an area affected by hurricanes, 63% considered climate change to be a major factor. In another 2019 poll, 57.2% of respondents reported being afraid or very afraid of global warming and climate change. 

Climate change is indeed nothing new in Earth's history. But previous changes occurred over millions of years, not decades.

What Causes Climate Change?

Global warming is the planet's response to higher levels of greenhouse gases in the atmosphere. These gases create a kind of blanket that traps the heat from the sun and sends it back to the planet’s surface. Humans have contributed to the current crisis by burning fossil fuels that emit greenhouse gases and add to that heat-trapping "blanket."

As of December 2020, NASA-recorded carbon dioxide levels were 415 parts per million (ppm). The last time levels were this high was more than 2.6 million years ago, during the Pliocene era. Back then, the Arctic was 8 degrees Celsius (14 degrees Fahrenheit) warmer in the summer than it is now. As a result, it was only frozen during the winter. With less ice, sea levels were about 60 feet higher than today. That level of flooding could threaten major cities like New York, London, Miami, San Francisco, and Shanghai.

Why isn’t the Earth as hot as it was then? Greenhouse gases have risen so fast that temperatures haven’t had a chance to catch up. In 1880, they were just 280 ppm.

Also, the oceans absorbed most of the added CO2 from the atmosphere. In response, they’ve become 30% more acidic since the beginning of the Industrial Revolution. This imbalance is causing a mass extinction of sea life. For example, as much as half of the world’s coral reefs have died in the last 30 years.

In addition to absorbing C02, the oceans have also absorbed 90% of the heat. When water heats, it expands. That’s caused rising sea levels and flooding. 

The top 328 feet of the ocean warmed around 0.6 degrees from 1969 to 2019. The last time the ocean was this warm was 100,000 years ago. Sea levels were 20 to 30 feet higher. The ocean has warmed so fast that there hasn’t been enough time for higher temperatures to melt the arctic ice caps. As it does, sea levels will catch up to where they were last time the ocean was this warm, flooding major cities in the process.

Global warming will continue even if no more greenhouse gases were emitted starting tomorrow. The temperature is reacting to the greenhouse gases that have already been emitted. These gases must be absorbed from the atmosphere and put back into the ground to stop the effects of climate change.

In 2017, the Trump administration released a report that blamed climate change on human activity. According to the Environmental Protection Agency, the primary U.S. sources of greenhouse gas emission in 2018 were electricity generation, transportation, industry, commercial and residential, and agriculture.

Source Fuel Percent
Electricity Generation Mostly coal, natural gas 26.9%
Transportation Oil, gasoline 28.2%
Industry Oil, chemicals 22.0%
Commercial and Residential Mostly natural gas, petroleum for heating and cooking 12.3%
Agriculture Gas emissions from livestock 9.9%
Forestry Absorbs CO2 offset 11.6%

On a per-person basis, the U.S. is the fourth-worst offender for greenhouse gas emissions. In 2018, it emitted 16.56 metric tons of CO2 per person. Saudi Arabia, Kazakhstan, and Australia led the world in per capita emissions, with 18.48, 17.60, and 16.92 metric tons, respectively. Despite emitting 28% of the world's greenhouse gases in 2018, China emitted only 7.05 metric tons per person.

Since 1751, the U.S. has contributed 400 billion metric tons of carbon dioxide. That's a fourth of total greenhouse gases and more than any other nation. The good news is that its emissions are leveling off. The bad news is that about 25% of the existing emissions will remain in the atmosphere for tens of thousands of years.

The U.S. is one of the world’s richest countries. A recent study found that the planet's wealthiest 1 billion people emit 60% of greenhouse gases. The poorest 3 billion produce only 5%. That’s why you may hear people say income inequality can cause climate change.

What's the Economic Impact of Climate Change?

Here's how climate change threatens to impact—or is already impacting—some segments of the economy.

Insurance

From 1980 to 2020, extreme weather cost $1.875 trillion. Consistently high costs related to extreme weather threaten to make insurance too expensive for most people. Munich Re, one of the world's largest reinsurance firms, blamed climate change for $24 billion of losses in the 2018 California wildfires alone. Of those losses, $18 billion were insured. If insurance companies continue to experience significant costs related to increasingly common extreme weather events, they may have to raise premiums to remain profitable.

GDP

The negative effects of climate change are expected to be an ongoing drag on the global gross domestic product (GDP). A Stanford study in 2015 attempted to project climate change's impact on GDP, and they concluded that there was a 51% chance that climate change would reduce the world's GDP by more than 20%. That's comparable to the Great Depression, where GDP fell to -26.7%. The only difference is that, in the case of climate change effects, the GDP reduction would be permanent. The same Stanford study found that there was a 71% chance that climate change would have at least some negative impact on GDP.

Employment

The World Employment and Social Outlook 2018 estimated that 1.2 billion jobs are directly dependent upon the healthy and sustainable management of the environment.

Natural disasters caused or compounded by humans cost 23 million working-life years annually from 2000 to 2015. On the other hand, efforts to combat climate change would create 24 million new jobs.

Immigration

Climate change creates mass migration around the world. People are leaving flooded coastlines, drought-stricken farmlands, and areas of extreme natural disasters. From 2008 to 2018, events related to climate or weather have displaced 22.5 million people annually, according to the United Nations High Commissioner for Refugees. Some forecasts predict that, by 2050, climate change could cause as many as 1 billion people to emigrate. 

Immigration at the southern U.S. border can be expected to increase as climate change worsens conditions in Latin America. The World Bank estimates that between 1.4 million and 2.1 million people in Mexico and Central America will migrate due to climate impact by 2050. Drought, shifting rain patterns, and extreme weather destroys crops and leads to food insecurity. The World Food Program found that almost half of Central American migrants left their homes because of food insecurity.

National Security

In 2017, Congress proclaimed that “climate change is a direct threat to the national security of the United States.” A three-foot increase in sea levels would endanger 128 military bases in the U.S. Aside from the security threats, these 128 bases are valued at roughly $100 billion. A 2018 Pentagon survey revealed that U.S. Naval Academy in Annapolis, Maryland has experienced storm surge flooding and hurricane damage. The Cape Lisburne Long Range Radar Station in Alaska has lost a seawall from extreme weather.

Food Prices

As America experiences more extremely hot days, food prices are rising. Corn and soybean yields in the U.S. precipitously plummet when temperatures rise above about 84 degrees Fahrenheit. Those crops feed cattle and other meat sources and create spikes in beef, milk, and poultry prices. A 2019 study found that a warming ocean has pushed global sustainable fish yields down 4.1% from 1930 to 2010. Some regions experienced fish population losses of up to 35%.

Are There Solutions to Climate Change?

The United Nations recommended that the world limit its average temperature to 2 degrees Celsius above pre-industrial levels. It's already surpassed 1 degree Celsius. Here's a timeline of what's been done.

1992

The United Nations Framework Convention on Climate Change was formed.

Dec. 11, 1997

The United Nations adopted the Kyoto Protocol. The first commitment was to 5% below 1990 levels. The second commitment period was from 2013 to 2020, when they agreed to reduce emissions by 18% below 1990 levels.

2008

The International Energy Agency called for countries to spend $45 trillion by 2050 to prevent greenhouse gas emissions from slowing economic growth. The measures included building 32 nuclear power plants each year and reducing greenhouse gases by 50% by 2050. This infrastructure would cost the world $100 billion to $200 billion a year for the next 10 years after 2008, and rise to $1 trillion to $2 trillion after that. 

Dec. 7, 2009

The Environmental Protection Agency found that concentrations of greenhouse gases threatened public health. Based on this study, the EPA finalized emission standards for cars in 2010 and trucks in 2011.

Dec. 18, 2009

The UN Climate Summit produced the Copenhagen Accord. Countries pledged to limit global temperature increases to 2 degrees Celsius over the pre-industrial level. The developed countries agreed to pay $100 billion a year by 2020 to assist poor countries affected the most by climate change.

2010

China promised it would reach four climate goals by 2020:

  1. Reduce CO2 emissions per unit of GDP by 40% below 2005 levels
  2. Increase renewable energy consumption to 15%
  3. Increase forest stock by 1.3 billion cubic meters
  4. Increase forest coverage by 40 million hectares relative to 2005

Aug. 3, 2015

President Obama released the Clean Power Plan. It established state targets to reduce carbon emissions from power plants by 32% below 2005 levels. The goal is to do so by 2030. The Trump administration repealed this policy in 2019.

Dec. 12, 2015

In 2015, 196 parties signed The Paris Agreement. It provided a framework for keeping climate change levels below 2 degrees Celsius, and preferably below 1.5 degrees Celsius. The U.S. helped negotiate the deal under the Obama administration, but the Trump administration withdrew from the agreement in 2017.

Nov. 4, 2016

The Paris Agreement went into force as 55 members ratified the agreement. They make up 55% of global emissions.

Nov. 8, 2017

The European Union agreed to cut carbon-dioxide emissions from new vehicles by 30% (compared to 2021 levels) by 2030.

Dec. 12, 2017

French President Emmanuel Macron convened world leaders to the One Planet Summit. The summit focused on how to finance the global transition away from fossil fuels.

Jan. 20, 2021

Newly inaugurated President Joe Biden signs an executive order making it a federal priority to combat the efforts of climate change. The order tasks agencies with reviewing any Trump administration policies that may hinder government efforts to fight climate change.

7 Steps You Can Take to Help Stop Climate Change

Average citizens and entrepreneurs are hard at work on innovative ways to address climate change.

One strategy is to plant trees and other vegetation to halt deforestation. You can also donate to charities that plant trees.

A second strategy is to become carbon neutral. The average American emitted roughly 16.5 metric tons of CO2 in 2018. The United Nations program Climate Neutral Now also allows you to offset your emissions by purchasing credits. These credits fund green initiatives such as wind energy or solar power heaters in developing countries. 

Third, enjoy a plant-based diet with less meat. Gases from livestock, such as methane from cows, make up nearly 10% of the total annual U.S. greenhouse gas emissions. By eating less meat, you reduce the need for livestock that creates these gases. Similarly, avoid products like palm oil (and products that contain palm oil) that contribute to deforestation.

Fourth, pressure corporations to disclose and act on their climate-related risks. Since 1988, 100 companies are responsible for more than 70% of greenhouse gas emissions. The worst are ExxonMobil, Shell, BP, and Chevron.

Fifth, reduce food waste. The Drawdown Coalition estimated that as much as 18.8 gigatons of CO2 emissions would be avoided if food waste was reduced by 50% by 2050.

Sixth, cut fossil-fuel use. Where available, use more mass transit, biking, and electric vehicles. If you continue to drive a gas-powered vehicle, you can improve its fuel efficiency by keeping the tires inflated, changing the air filter, and driving under 60 miles per hour. 

Seventh, hold the government accountable. The International Energy Administration said that governments control more than 70% of global energy investment. Citizens can pressure their government to spend those energy investments on cleaner power sources. 

Similarly, people can vote for candidates who promise a solution to climate change. The Sunrise Movement is pressuring candidates to adopt a Green New Deal. Other candidates and elected officials are promising to reduce their campaign funding from the fossil fuel industry.

What's the Outlook on Climate Change?

Scientists predict that sometime between 2042 and 2052 rising temperatures will have created the first ice-free Arctic summer year (FIASY), meaning there will be virtually no Arctic ice in the summer. The dark ocean that replaces it will absorb even more heat. It will create a chain reaction that will further heat the Earth’s temperature even if we stop emitting additional greenhouse gases.

Greenhouse gas emissions increased by 41% from 1990 to 2020. Levels dropped in 2016, but have risen since. Power plants began switching from coal to natural gas, and a warmer winter reduced demand for heating oil.

There are no safe places in a climate-change future. Climate destabilization means that the world will be pummeled by extreme weather. Also, mass extinction threatens agriculture. A United Nations report estimates that 17% of bats and birds that pollinate are at risk, and 75% of the world’s food crops rely on pollinators to some extent. Everyone will be affected in ways that are difficult to imagine now.