• Forecast
  • News Tip
  • Categories
Temperature Precipitation
Estimated read time
5m 48s

Business leaders say climate change threatens economy

By Aimee Picchi/CBS News 10:28 AM June 24, 2014

While the impact of climate change typically draws environmentalists and political types to the issue, it’s now the focus of a group of high-powered executives who say Americans should view it as a business risk.

In a report called “Risky Business,” business leaders including billionaire Michael Bloomberg and former U.S. Secretary of the Treasury and Goldman Sachs (GS) CEO Henry Paulson compare climate change to an interest-only loan, a risky form of borrowing that helped trigger the housing crisis.

Future generations “will be stuck paying off the cumulative interest on the greenhouse gas emissions we’re putting into the atmosphere now, with no possibility of actually paying down that ‘emissions principal,’” the report says.

Those costs will be significant, according to the study’s calculations. By 2050, as much as $106 billion worth of coastal property will be below sea level, while extreme heat could reduce average crop yields by as much as 70 percent in some states.

“Damages from storms, flooding and heat waves are already costing local economies billions of dollars — we saw that firsthand in New York City with Hurricane Sandy,” Bloomberg, the former mayor of New York City, said in a statement. The study “details the costs of inaction in ways that are easy to understand in dollars and cents — and impossible to ignore.”

Other business leaders who are lending their names to the report include former hedge fund manager Thomas Steyer, Cargill executive chairman Gregory Page and former U.S. Treasury Secretary Robert Rubin.

While the report provides a grim view of the impact on climate change through the year 2100, it also stresses that the damage will be felt near-term. Within the next five to 25 years, the annual average cost of coastal storms and hurricanes could rise to as much as $35 billion per year. Agricultural yields in some Midwestern and Southern counties could slip more than 10 percent within that time frame, while rising temperatures will cause demand for energy to surge, costing residential and commercial ratepayers as much as $12 billion each year.

The business community should step up and “lead the way in helping reduce climate risks,” said the report. It recommends that business adapt new practices, such as new agricultural technologies or building sea walls, while investors should incorporate risk assessments from climate change into their plans.

The public sector should also be involved, although the report didn’t provide direct recommendations, and generally side-stepped political issues.

The report was prepared by economic research firm Rhodium Group, with the research led byRobert Kopp, a climate scientist at Rutgers University, and economist Solomon Hsiang of the University of California, Berkeley.

The federal government’s efforts to reduce greenhouse-gas emissions has been at the center of a fight between the U.S. Chamber of Commerce and the Environmental Protection Agency. In a Monday decision, the Supreme Court mostly supported the EPA’s plan to lower emissions, although it said it had overstepped its power in the case of forcing companies to evaluate how to reduce emissions.

“Our economy is vulnerable to an overwhelming number of risks from climate change,” Paulson said in a statement. “These risks include the potential for significant federal budget liabilities, since many businesses and property owners turn to the federal government as the insurer of last resort.”

Not every U.S. region will feel the same impact, or level of financial pain, from climate change, the report found.

In the Northeast, the biggest impact will come from the rise in sea level, which will affect industries ranging from financial services (with Wall Street located in a low-lying area of New York City) to fisheries in New England. Eighty-eight percent of the Northeast’s population lives in coastal regions, the report notes.

By the end of the century, sea levels in New York City and Boston could rise as much as four feet. The cost of higher sea levels and stronger storms in the Northeast could cost as much as $9 billion by 2100, according to the report. Average temperatures in cities in the region could rise as much as 5.4°F during the day and 22°F in the evening, compared with rural areas.

The Southeast is also likely to be hit hard by the coastal effects of climate change, with about one-third of residents living near the sea. Florida, much of which sits on porous limestone, could see as much as $23 billion worth of property literally under water by 2050, the report says. Heat will also become major issue, with the region experiencing an additional 17 to 52 days a year of temperatures reaching at least 95°F.

In the Midwest, agriculture will be heavily impacted, with states including Missouri and Illinois facing an average yield loss of up to 15 percent in the next five to 25 years. That could reach a 73 percent yield loss by 2100.

“Armed with the right information, Midwest farmers can, and will, mitigate some of these impacts through double- and triple-cropping, seed modification, crop switching and other adaptive practices,” the report notes.

The number of days reaching 95°F or higher in the Midwest could rise by an additional seven to 26 days by 2050. But the bigger impact will come from rising humidity, which could reach dangerous levels in the Midwest by the late part of the century, according to the report.

As for the Great Plains region, which the report defines as reaching from Texas to Montana, demand for air conditioning will rise significantly because of hotter days, raising costs. Agriculture will also feel the heat, with lower yields in the region’s southern states.

In the Northwest, coastal regions are likely to see higher sea levels. Pests and wildfire risks will likely increase as the climate changes, putting its forestry industry at risk, the report predicts. For the already hot and dry Southwest, residents may see one to two additional months of days hitting 95°F or higher by 2100. That would boost the risk of wildfires and potentially create a threat to water supplies.

“Extreme heat may also lead to higher evaporation of existing reservoirs” in the Southwest, the report notes. “This translates into less available groundwater for critical industries such as agriculture, as well as for simple drinking and bathing.”

Alaska, meanwhile, is “ground zero” for climate change, thanks to its heavily coastal population and the importance of fisheries and tourism to its economy. Sea levels here could actually fall, the report notes. Meanwhile, the island state of Hawaii will likely see a greater sea level rise than the global average, as well as average temperatures that could rise by as much as 10°F by the end of the century.

© 2014 CBS Interactive Inc. All Rights Reserved.

Latest Stories

  • Crime

    Woman who knew victim found in crash says she ‘knew something was wrong’

    by Daniella Rivera on Jun 29, 9:29

    The last time Geraldine Turner saw 30-year-old Jacqueline Goodwin was Sunday when Goodwin spent the night in her home, which used to be an assisted living center. “She would go and come and go and come and go,” Turner said. She said for 14 years, she was like a mother to Goodwin, who didn’t have a […]

  • DayBreak

    Eagle River shop sees sweet start to ‘Row by Row’ quilting project

    by Sierra Starks on Jun 29, 8:14

    The phrase “Home Sweet Home” is posted in numerous places inside the Twisted Sisters’ Quilty Pleasures shop — hanging from the knob of a display cabinet, visible on the bathroom wall and printed on a laminated sign in the part of the shop dedicated to the Row by Row Experience. Row by Row, a shop-hop […]

  • News

    Air, ground search continues for hiker missing near Nome

    by Associated Press on Jun 29, 8:05

    Emergency responders in Nome are intensifying the search for a missing hiker. Alaska State Troopers were notified Monday after 36-year-old Joseph Balderas failed to show up for work as a law clerk in the Nome court. Balderas’ vehicle was found along the Nome-Council Highway. He may have been running or hiking in the area. Aircraft […]

  • News

    Juneau grocery sales-tax exemption option shot down

    by Associated Press on Jun 29, 7:26

    Juneau assembly members have rejected a proposal that would have allowed voters to decide whether to remove a 5 percent sales tax on groceries. The Juneau Empire reports the Juneau Assembly on Monday rejected an ordinance that would have put the matter on the ballot this fall. If the ordinance had passed, voters would have decided […]

  • News

    Bear numbers in Kodiak improve after decline

    by Associated Press on Jun 29, 7:18

    A recently completed study shows that southwest Kodiak’s bear population is on the rise after seeing a significant drop in 2010. KMXT-FM reports the bears were studied through a partnership between the Kodiak National Wildlife Refuge and the University of Montana. Will Deacy and his colleagues studied several streams in southwest Kodiak over a four-year period […]

  • Sports

    Legendary coach Pat Summitt remembered for lasting impact on women’s basketball

    by Dave Goldman on Jun 29, 6:49

    Pat Summitt was a women’s college basketball coach. Her nearly 40-year career at the University of Tennessee was about more than wins, though she had plenty of them — 1,098 and eight national titles. She was a pioneer. A trailblazer. She helped put women’s basketball on the map and subsequently helped raise the profile of […]

  • News

    Summer school students get their diplomas in special graduation ceremony

    by KTVA CBS 11 News on Jun 28, 22:52

    Eighteen Anchorage students received their high school diplomas Tuesday at a ceremony at East High School. The group of teens from eight local high schools was part of the summer school program, which allowed them to complete their graduation requirements. One of the graduates, Bartlett High School’s Isaiah Alston, said it was a relief to […]

  • News

    M/V Susitna ready for sale to the Philippine Red Cross

    by KTVA CBS 11 News on Jun 28, 21:23

    The Matanuska-Susitna Borough got good news Tuesday about its ferry, which never transported any passengers and is in the process of being sold. Crews in Seattle have been working to repair the M/V Susitna‘s four water damaged engines. On June 23, the boat passed sea trials with representatives from the Philippine Red Cross and Mat-Su […]