Coastal communities in New Jersey will likely see a more than 200 percent increase in annual storm damage — between $1.4 billion and $3.7 billion — due to sea level rise by the end of the century.
That’s just one of the many economic tolls climate change will exact upon the state and national economy, according to the authors of a report released Tuesday. Other factors include declining crop yields and labor productivity, increasing energy costs and higher human mortality.
The research was funded by the Risky Business Project, which describes itself as nonpartisan and is chaired by a number of prominent business leaders, including former New York City Mayor Michael R. Bloomberg and former Treasury Secretary Henry M. Paulson Jr.
“If you’re a responsible investor or policymaker considering investing in America, you need to take climate change into account,” said Robert Kopp, associate director of the Rutgers Energy Institute. “These are large, broad impacts. It’s not an environment issue, it’s not an economic issue — it’s a human issue.”
Kopp, who’s studied climate change for more than a decade, is one of the authors of the American Climate Prospectus, which was financed by and incorporated into the report by Risky Business. It applies the language and techniques of risk management to climate change, using available data to create projections for the long-range costs associated with global warming, he said.
One of the largest economic impacts, Kopp said, is death: Nationwide, more people will die of illnesses related to climate change.
“The number of people dying in late century is more than the death rate from automobiles today,” he said. “I thought that was a striking result.”
That particular risk factor is more serious in areas closer to the equator, however, because they will experience higher temperatures and more sustained heat waves. In New Jersey, the most significant risks revolve around energy, labor and the impact of sea level rise and increased storm activity along the coast.
By century’s end, the prospectus places the increased per capita cost of increased energy expenditures statewide at between $90 and $260; between $420 and $680 due to sea level rise and storms; and between $100 and $400 for lost labor productivity.
Nearly 30 percent of the state’s labor force works in high-risk sectors, according to the report. That means they are at particular risk of heat stress due to internal body heat produced during physical labor in industries like agriculture, construction, manufacturing and utilities.
Hurricane Sandy, which alone caused more than an estimated $30 billion in damage statewide, already gave New Jersey a glimpse into what the future might hold.
It’s a near certainty that the New Jersey shoreline will look quite different than it does today,” Kopp said. “That’s not just from this report, but from others.”
And that will have ripple effects across the economy. Beyond the obvious population and business displacement, Kopp said, it would mean all sorts of financing would become more expensive.
“Only so much money is flowing around the economy,” he said. “If more has to be invested in rebuilding, at any given time there’s a little less to be invested elsewhere, which raises the price of taking out loans.”
Among the national predictions in the Tuesday’s report: Between $66 billion and $106 billion in coastal property will likely be below sea level by 2050, labor productivity of outdoor workers could be reduced by 3 percent because extremely hot days will be far more frequent, and demand for electricity to power air conditioners will require the construction of more power plants that will cost electricity customers up to $12 billion per year.
Leaders of the Risky Business Project said they hope their report and its associated research will be used to make better-informed decisions about climate change policy.
“If we act immediately, we can still avoid most of the worst impacts of climate change and significantly reduce the odds of catastrophic outcomes,” Paulson said Tuesday.
Kopp said placing these impacts in an economic context makes them more accessible and immediate for some people.
“Economics is an important way of looking at and evaluating decisions that carries a lot of weight in this country,” he said.
Stewart Farrell, director of Richard Stockton College's Coastal Research Center, said it’s useful to think about climate change in economic terms, but those who doubt its veracity will likely still be unconvinced. And then there’s the difficulty people have in thinking out 100 years, he said.
“People are used to thinking in two-year time increments,” he said. “That’s about as far as they get. Fifty or one hundred years in the future — most of us won’t be here, so (the thinking is) why worry about it.”
At some point over the next century, Farrell said, parts of the barrier islands will be under water, at least at high tide. But few people are prepared to think on that scale. Ultimately, Farrell said it will cost a lot of money over the next generations to adapt to these changing conditions.
Despite comprising more than a hundred pages, the report is not comprehensive. It does not include other anticipated impacts, such as droughts and wildfires or collapsing ecosystems.
“There's a whole litany of things not calculated in the assessment,” said Gary Yohe, an economics and environmental studies professor at Wesleyan University and vice chair of the National Climate Assessment, a U.S. government project set up to study the effects of climate change. Yohe was not part of the Risky Business Project report, but he was asked to review it.
Still, he said, “The general conclusions are right on the money.”
The Associated Press contributed to this report.
Contact Wallace McKelvey:
@wjmckelvey on Twitter