Climate Change Facts and Effect on the Economy

What Has Climate Change Cost Us? What's Being Done?

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Climate change is the Earth’s response to increased carbon dioxide in the atmosphere. These greenhouse gases trap infrared heat from the sun. That has raised the earth’s average temperature 2.0 degrees Fahrenheit since the late 19th century. Previous bouts of climate change happened much more slowly. Slight changes in the earth’s orbit created those warming and cooling periods.

The increase in global warming has created other problems.

The oceans are absorbing the carbon dioxide from the atmosphere. In response, they’ve are 30 percent more acid since the beginning of the Industrial Revolution. They’ve also become warmer -- the top 2,300 feet are 0.3 degrees warmer since 1969. causing them to expand. The polar ice sheets are shrinking. As a result, sea levels have risen eight inches in the last 100 years. Glaciers and snow cover are also shrinking. That heats up the atmosphere even more, since snow reflects heat back into space. Higher temperatures have created more damaging and frequent natural disasters.


Natural disasters have also taken a toll on the economy in the last seven years. In 2017, Hurricane Harvey cost $180 billion. In 2015, the drought cost California $2.7 billion. In 2014, the polar vortex walloped the United States in, shrinking the economy by 2.1 percent. In 2013, the most destructive tornado in U.S. history hit Oklahoma City, costing $2 billion in damages.

In 2012, Hurricane Sandy cost $50 billion. in 2011, the Mississippi River flood was a 500-year event that left $2 billion in damages.

A 2017 poll showed that 55 percent of Americans believe that climate change made hurricanes worse. That's up from the 39 percent who said so 10 years ago. As a result, 48 percent reported being afraid of climate change.


Global warming has melted the ice caps in Antarctica at 1.6 meters per year, compared to 3.8 centimeters annually before 1992. The United Nations said that to reverse the impact, the world's average temperature must be limited to 2 degrees Celsius above preindustrial levels. As of February 2016, the average temperature has already surpassed 1.5 degrees above preindustrial levels. 

As the country experiences more extremely hot days, food prices will rise. That's because corn and soybean yields in the United States plummet precipitously when temperatures rise above 84 degrees Fahrenheit. Those crops feed cattle and other meat sources. That will make beef, milk and poultry prices rise.  Worker productivity declines sharply, particularly for outdoor jobs. That will further raise the cost of food.

Timeline of Natural Disasters — Just a Coincidence?

Many people assume that climate change and global warming just means temperatures will gradually get warmer. Maybe one day melting ice caps will raise the sea level enough to flood New York City. 

But climate change also means unpredictable and violent storms, droughts, and floods around the world. That's according to John P. Holdren, Director of Woods Hole Research Center, and other experts.

Here are examples that prove their point.

2017 - Hurricane Harvey hit Houston, costing $180 billion in damage. Hurricane Irma followed, with damage at $100 billion. 

2016 - Scientists reported record-high temperatures for the fifth year in a row. Some areas also experienced record levels of typhoons, flooding and heat waves. Two-thirds of the Great Barrier Reef bleached out due to high water temperatures.

2015 - California's six-year drought emptied groundwater reservoirs, forcing water restrictions on farmers and families. It cost $2.7 billion and 21,000 jobs in 2015.

2014 - The polar vortex hit the Midwest, slowing retail sales and economic growth.

2013 - The Oklahoma City tornado was the most destructive in U.S. history, totaling $2 billion in damages.

2012 - Hurricane Sandy left behind $50 billion in economic destruction.

Droughts across the Midwest resulted in high food prices.

2011 - The Mississippi River flood was a 500-year event. It left at least $2 billion in damages. Hurricane Irene left $20 billion in damage and $45 billion in total impact on the economy. The worst tornado season in U.S. history occurred, with 305 twisters hitting in one week, wreaking $3 billion in damages. Japan's earthquake and tsunami cost between $300 billion. Iceland's volcano cost $1.2 billion in lost air traffic. 

2010 - Haiti earthquake caused at least $8.5 billion in damages.

2009 - Plenty of natural disasters but no mega-disasters.

2008 - The world was buffeted by floods, hurricanes and cyclones:

  • Guangdong province in southern China experienced the highest rainfall in history. Resultant flooding killed 57 people, displaced 1.5 million and ruined crops on 860,000 hectares of cropland.
  • Heavy rainfall in the Midwest caused flooding, resulting in the destruction of 12 percent of crops. This contributed to higher prices for corn and soybean. 
  • Hurricane Gustav cost $25 billion in damage to Louisiana, Mississippi and lost oil production.
  • Hurricane Ike cost $25 billion in damage alone and boosted gas prices to $5 a gallon.
  • A typhoon in the Philippines capsized a ship carrying 845 passengers and displaced 360,000 inland.
  • Cyclone Nargis in Burma displaced 2.4 million people. Over 134,000 were dead or missing. Large parts of the delta were completely destroyed. (Sources: "Floods Kill at Least 57 in China," VOA, June 16, 2008. "Six Weeks After Cyclone, Burma Devastation Remains Uncertain," VOA, June 11, 2008. "Along the Mississippi, Wary Eyes on Rising Water," IHT, June 18, 2008. "More than 800 Missing after Philippine Ferry Capsized amid Deadly Typhoon," New York Times, June 22, 2008.)

2007 - More droughts and floods pummeled the world.

  • Georgia, Florida and Alabama had their worst dry spell in recorded history. At one point, Atlanta was down to a three-month supply of water.
  • Massive floods hit Mexico and affected one million people, creating " of the worst natural disasters in the history of the country, " according to then-President Felipe Calderon.
  • An aggressive monsoon season hit India, Nepal, Bhutan and Bangladesh. They created the worst floods in living memory, according to UNICEF.  Damage was $120 million. Thirty million people were displaced and 2,000 killed. 

2006 - A relatively normal disaster season.

2005 - Hurricane Katrina left behind $125 billion in damages. Gross domestic product fell to 1.3 percent in Q4 2005. 

Scientists Agree that Man Caused It

Scientific and government organizations agree that a manmade increase in greenhouse gases cause global warming. These include carbon dioxide, hydrofluorocarbons, and perfluorocarbons. These gases sit in the earth's atmosphere and prevent the sun's radiation from going back into space. The heat builds up like it does in a greenhouse.

Current levels are at 370 parts per million volume, up from 280 ppmv 100 years ago. Many modern processes release the gases. They include deforestation, factory farming, industrial procedures like aluminum smelting, and the burning of oil in all its forms. 

On November 3, 2017, the Trump administration released a report that blamed climate change on human activity. It predicted that the ocean could rise another eight feet by 2100. 

What's Being Done

The global community is trying to reduce greenhouse gas emissions. They are introducing measures to increase the use of clean energy, including electric vehicles. 

On November 8, 2017, the European Union agreed to cut carbon-dioxide emissions by new vehicle by 30 percent between 2021 and 2030.

On December 18, 2015, 195 countries signed the Paris Climate Accord. They pledged to cut greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. They also committed $3 billion in aid for poorer countries by 2020. These are most likely to suffer damage from rising sea levels and other consequences of climate change.

The accord's goal is to keep global warming from worsening another 2 degrees Celsius above preindustrial levels. Many experts consider that the tipping point. Beyond that, and the consequences of climate change become unstoppable.

The United States is responsible for 20 percent of the world's carbon emissions. It would be difficult for the other signatories to reach the accord's goal without U.S. participation. But they are trying. Carbon is taxed in 60 jurisdictions around the world. China, Germany, Sweden and Denmark are considering a tax on beef. Greenhouse gas emissions from livestock contribute 14.5 percent of the world's total.

On June 1, 2017, President Trump announced the United States would withdraw from the accord. Trump said he wanted to negotiate a better deal, but leaders from Germany, France and Italy said the accord is non-negotiable. China and India joined the other leaders in stating they remain committed to the accord. Some have argued that America's withdrawal from a leadership position creates a vacuum that China will readily fill. The United States cannot legally exit until November 1, 2020. That means it will become an issue in the next presidential election. 

On December 12, 2017, French President Emmanuel Macron convened 50 world leaders to the One Planet Summit. Trump was not invited, but would be if he agreed to rejoin the accord. The summit focuses on how to finance the global transition away from fossil fuels.

Business leaders from Tesla, General Electric and Goldman Sachs said this will give foreign competitors an edge in clean energy industries. That's because U.S. companies will lose government support and subsidies in these industries.

China is already taking the lead in electric vehicles. Almost half of the world's plug-in electric vehicles are sold in China. Its regulations and subsidies drive consumers away from gasoline-powered cars. China wants to reduce pollution. It also wants to reduce reliance on foreign oil. But more importantly, it wants to improve the country's auto makers. China's car market is so large, it's forcing foreign car makers to improve their electric vehicle production.

On December 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. President Obama badgered China's President Hu Jintao to sign the agreement. The European Union, other developed nations, and many developing nations also agreed to the limit. 

In addition, the developed countries agreed to pay $100 billion a year by 2020 to assist poor countries affected the most by climate change. That includes relocating communities hit by floods and droughts and protecting water supplies. The countries agree to provide $30 billion over the next three years.

Obama had hoped developed countries would agree to reduce their emissions to 80 percent lower than 1990 levels by 2050. All other countries, including China, would reduce emissions by 50 percent. China blocked that agreement. 

Some countries refused to sign the agreement because the United States refused to cut more than 4 percent of its emissions by 2020. That foot-dragging signaled to many that Obama was not any more committed than the Bush administration

In 2008, the International Energy Administration called for expenditures of over $45 trillion in the next 50 years to prevent global warming from slowing economic growth. To put this into perspective, the economic output of the entire world is only $65 billion a year. 

The measures included building 32 nuclear power plants each year and reducing greenhouse gases by 50 percent by 2050. This 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. (Source: "Nations Urged to Spend $45 Trillion to Battle Emissions," The New York Times, June 6, 2008.)

In 2007, China announced it would reduce energy consumption by 20 percent by 2010, thereby reducing CO2 emissions. In 1997, the United Nations adopted the Kyoto Agreement. The United States never ratified it. 

Even if all countries follow the Accord, temperatures will continue to rise. That's because the measures need to be stricter to reverse global warming. As a result, the Climate Impact Lab predict major cities will see many days above 95-degree Fahrenheit. By 2100, Washington DC will experience 29 extremely hot days each year. That's quadruple the average of seven it experienced from 1986 to 2005.  

The United States and China Are 44 Percent of the Problem

In reality, a global agreement doesn't have to occur. Only 10 countries account for almost 70 percent of the world's carbon emissions. China and the United States are the worst, at 27 percent and 17 percent, respectively. Russia and India contribute a little more than 5 percent each, then comes Japan (3.6 percent), Germany (2.3 percent), Iran (1.9 percent), South Korea (1.9 percent), Canada (1.7 percent) and Saudi Arabia (1.7 percent).  

If these 10 countries could agree to limit pollution and expand renewable technology, the other countries wouldn't really need be involved. (Source: "A Plan B for Climate Agreements," MIT Technology Review, June 12, 2014.)

But many of these countries are bitterly opposed to each other and often at war over boundaries, religion, and (of all things) oil. So it's easy to understand why little progress has been made since 1988, when the United Nations first tried to broker a solution.

But until there is stronger government leadership, we must create our own progress. Many everyday citizens and entrepreneurs are hard at work on innovative ways to address climate change.  Republican Newt Gingrich, former Speaker of the House, argued for the importance of supporting entrepreneurial environmental solutions in his 2007 book A Contract with the Earth. Pressure on the market forces that got the atmosphere into trouble is the best solution to clean it up.

Corporations Are Cutting Back

The world's 1,000 biggest corporations contribute 12 percent of greenhouse-gas emissions. In 2017, 89 percent have plans to cut those emissions. But it's not enough to reach the U.N.'s target of 2 degrees Celsius. So far, 14 percent of the companies have goals that align with the target. Another 30 percent pledge do so in the next two years. Investment firms, such as HSBC Holdings and Goldmans Sachs, have begun targeting more low-carbon businesses.