The Risky Business Project Climate Report: Dire Economic Consequences Of Global Warming


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Rising sea level up close. Courtesy of NOAA

Rising sea level up close. Photo courtesy of NOAA

Henry Paulsen’s opinion piece in last Sunday’s New York Times was a prelude to Tuesday’s release of a climate report by the Risky Business Project. Paulsen, former Republican Treasury Secretary, formed the group with former mayor of New York, Michael Bloomberg, and hedge fund billionaire Tom Steyer.

The Risky Business Project has deep economic expertise and bi-partisan political credentials. The Risk Committee Members include:

  • Henry Cisneros: former Democratic Secretary of Housing and Urban Development (HUD)
  • Gregory Page: former CEO of Cargill, Inc.
  • Robert Rubin: former democratic Treasury Secretary
  • Olympia Snowe: former republican Senator from Maine
  • Donna Shalala: former democratic Secretary of Health and Human Services (HHS)
  • George Schultz: former Republican Treasury Secretary
  • Al Sommer: Dean Emeritus of the Bloomberg School of Public Health at Johns Hopkins University

Who Prepared The Report?

To minimize complaints of left-wing bias by those with a vested interest in doing nothing about climate change, The Risky Business Project had the report prepared by the Rhodium Group, an economic research firm, in collaboration with Risk Management Solutions, the world’s largest catastrophe-modeling company for insurance and investment management companies.

Climate Change: The Data Say

Enough evidence of climate change has now been presented that impartial assessments such as the The Risky Business Project climate report do not have to dwell on them. They simply mention them as settled science.

  • Temperatures worldwide are more than a degree higher than their 20th century average.
  • Sea level has risen a foot in the last century and the rate of increase is accelerating.
  • The atmospheric concentration of carbon dioxide recently exceeded 400 parts per million for the first time in two million years.
  • Carbon dioxide and other greenhouse gases are transparent to sunlight, but absorb the earth’s microwave radiation and trap heat in the earth-atmosphere-ocean system.

Carbon dioxide in our atmosphere is steadily increasing. Image courtesy of NOAA.

The conclusion is now inescapable that carbon dioxide and other greenhouse gas emissions are changing the oceans and the atmosphere. This report accepts that conclusion and concentrates on its economic implications.

What The Report Says

The Risky Business Project’s primary goal is to identify and quantify economic risks. The report focuses on the cost of ignoring climate change, though it cannot help mentioning the other hardships that people might endure.

Since much of the dialogue from climate-change deniers consists of warnings of the great economic costs of curtailing greenhouse gas emissions, this report endeavors to show that the cost of doing nothing is much higher than the cost of dealing with the problem.

What Are The Economic Impacts Of Global Warming?

The Risky Business Project’s report describes the major economic impacts of climate change:

  • Rising sea levels will inundate hundreds of billions of dollars worth of coastal property.
  • Increasing numbers and intensities of storms will cause hundreds of billions of dollars in insurance losses.
  • Changing temperature and precipitation patterns will lead to hundreds of billions of dollars in crop losses.
  • Increasing temperatures will cause heat-related injury or incapacity. The economic impact on business is uncertain, but will not be positive.

To paraphrase Everett Dirksen, former Senator from Illinois: A few hundred billion dollars here, a few hundred billion dollars there — pretty soon you’re talking real money.

The Risky Business Project exhorts politicians and business leaders to respond to climate change as they did to depletion of the ozone layer by chlorofluorocarbons (CFCs). International cooperation led to the Montreal Protocol, which called for the phasing out of CFCs; then businesses found innovative ways of replacing them.

Which Path Will Our Politicians And Businessmen Take On Climate Change?

As the water rises, the tide is turning against those who deny that the climate is changing and that homo sapiens is mainly responsible. Decoded Science applauds the efforts of The Risky Business Project to approach the problem of climate change in a bi-partisan way from all parts of the political and economic spectra.

The problem of climate change is more complicated than depletion of the ozone layer. Our political and economic systems have great inertia. Powerful tendencies oblige short-term thinking: corporations are focused on maximizing this quarter’s profits; individuals are concerned with the years of their life spans; politicians concentrate on getting re-elected.

Will This Generation Rise To The Challenge?

The high and still increasing amounts of greenhouse gases being pumped into the atmosphere are changing our weather; we can deal with the problem now or let another generation deal with it later, when it will undoubtedly be much worse.

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