ESTIMATES OF ECONOMIC IMPACTS OF CLIMATE

CHANGE IN WCI STATES

Bob Doppelt, Director

Climate Leadership Initiative

Institute for a Sustainable Environment

University of Oregon

Website: http:climlead.uoregon.edu

bdoppelt@uoregon.edu

541-346-0786

University of Oregon Climate Leadership Initiative (CLI)

CLI seeks to increase public understanding of the risks and opportunities posed by global climate change and to

enhance climate mitigation, preparation, education and business development policy and program analysis.

Research and technical assistance programs:

– Climate literacy, communication and Climate Masters

– Mitigation and preparation economics, policy, and program analysis

– Renewable energy and sustainable development

• Website: http://climlead.uoregon.edu

KEY POINTS

1. Economic effects of climate change in west are already visible and will grow in magnitude the warmer it gets.

3. The global economy is now ‘carbon constrained”--opens door to low-carbon business & job opportunities

2. The costs of not acting are large and could be catastrophic compared to the costs of solving the problem.

From An Economic Perspective Climate Change is a Unique “Externality”

• The emission of greenhouse gases imposes costs on others that are not borne by the emitter.

• The costs will be felt over a long time period and over the entire world.

• But, the exact nature of costs is difficult to pinpoint: they will be shaped by policies, market mechanisms, & other events.

• Those most affected—future generations– cannot speak up for their interests.

Small Changes Can Produce Huge Costs

• A 1O F change in temperature can mean millions of dollars in damage if the variance is from 32O F

• The impact of the 1O F variance from 32O F gets even larger if it is accompanied by precipitation

• Beware tipping points: e.g. When ocean waters rise above 82.4O F, evaporation dramatically, creating big reservoir of energy for storms

IMPACTS ON THE GLOBAL SCALE: STERN REVIEW OF THE

ECONOMICS OF CLIMATE CHANGE (October 2005, UK)

Bad News:

• Failure to curb the greenhouse gasses will,within this century, reduce global GDP between 5-20% of GDP, the same scale of the Great Depression and WWI

• The impacts will increase the warmer it gets. 

Good News

• It is still possible to avert the most serious damage by rapidly taking strong action to reduce GHG emissions

• Economic opportunities exist in wide range of new low-carbon goods and services--$500 billion market by 2050.

Studies and Sources Relevant to WCI• IPCC Working Groups I and II (2007)• The Economic Impacts of Climate Change in Oregon: A Preliminary Assessment (University of Oregon

Climate Leadership Initiative 2005)• Impacts Of Climate Change On Washington’s Economy:  A Preliminary Assessment of Risks and

Opportunities (University of Oregon Climate Leadership Initiative for the Washington Department’s of Ecology and CTED, 2006)

• Our Changing Climate: Assessing the Risks to California (CA Climate Change Center 2006)• Climate Assessment for the Southwest (University of Arizona, 2008)• Hotter and Drier: The West’s Changing Climate (Rocky Mt. Climate Organization and NRDC, March

2008)• Weather and Climate Extremes in a Changing Climate:Region’s of Focus, North America, Hawaii,

Caribbean, and U.S. Pacific Islands (U.S. Climate Change Science Program, June 2008)• The Economic Impacts of Climate Change and the Costs of Inaction (Maryland Center for Integrative

Environmental Research August 2008)• A Primer on Climate Variability and Change in the SW (Udall Center University of Arizona, March 2001) • Preparing for a Changing Climate: The Potential Consequences of Climate Variability and Change,

Rocky Mt./Great Basin Regional Assessment (Utah State University 2003)

Climate drivers in western North America through 2050

• CO2 and temperature (0.3o F to 1o F/decade)

• Precipitation: Unknown or small changes in total amount ( AZ and NM, elsewhere?) but likely in winter, summer

• Shift from snow to rain in low elevations, earlier snowmelt.

• Sea level rise of ≈1ft/century, maybe >>1ft.

Source: IPCC 4AR WG1, SPM and Ch 11

Timber harvests

• Forestry is ≈2% of GDP in OR; ≈1% in MT and WA; and ≈0.5% for all WCI states total.

• Timber yields may or depending on CO2 fertilization effect, water availability, fire, pests

• Yield in CAL in 2100 by as much as 18% for mixed conifers, 30% for pine (assuming medium warming).

• Potential non-linearities: i.e. BC pine beetle…

Sources: BEA 2006, CCCC 2006

Mountain Pine Beetle in B.C.

Sources: BC 2006a, BC 2006b

Mountain Pine Beetle in B.C.

Sources: BC 2006a, BC 2006b

Mountain Pine Beetle in B.C.

Sources: BC 2006a, BC 2006b

Wildfires Impacts on fire budgets, timber, property (urban-rural interface) and public health

• If 20th century relationships hold, acres burned per year in mid-21st century will: – more than double in NM, UT – almost double in AZ, MT, WA, OR– smaller or in CA

• Property damage plus firefighting costs (now ≈$100m for OR+WA, ≈$1b in CA).

Sources: McKenzie et al. 2004, WA DNR, ODF, USFS, CA Legislative Analyst’s Office

Public Health• Heat-related illness & death: By 2100, 2-4 times

in extreme heat events

Number of days with temps in the top 10and late-century. Source: CCCC 2006, WA DOH 2006.

New Mexico temperatures may 7°F or more this century

Source: NM Office of the State Engineer, 2006

Public Health• Heat-related illness & death:

By 2100, 2-4 times in extreme heat events.

• Air pollution likely to increase ozone but may particulate matter. (Now cause ≈8,800 deaths, cost $71b/yr in CA.)

• Asthma likely to increase--already costs Washington State $400 million.

• Wildcards: West Nile Virus and other vector-borne disease.

Number of days with temps in the top 10% of historic range by mid-century and late-century. Source: CCCC 2006, WA DOH 2006.

Electricity: Demand side PNW• Demand in winter (less heating), in summer (more A/C).

• Net effect may save $$ in MT, OR, WA.

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Source: John Fazio, Northwest Power and Conservation Council

Electricity: Demand side in SW• Net effect may increase costs in AZ, CA, NM.

• 2-6% in CA demand by mid-century, 3-20% by late-century.

Source: CCCC 2006

Electricity: Supply side (hydro)• Total precipitation is key, but may or .

• Salmon/ESA/in-stream issues--wildcards.

• Otherwise output will in mid-winter and in summer; may value of electricity by ≈5%, or ≈$165m/yr in Pacific NW.

Source: John Fazio, NWPCC; Payne et al. 2004

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Municipal water supplySnowpack “saves” precipitation for use in summer, when demand is higher.

Due to climate change, Seattle’s water system may hit its capacity constraint 10 years early, in 2050.

Source: Richard Palmer, UW

PNW SNOW TRANSITION BASINS Impacts on municipal and ag water supplies,

flooding, transportation

Green = Rain-dominant

Blue = Snow-dominant

Red = Transition where slight temp rise will cause snow to fall as rain

Source: Alan Hamlet, UW CIG for UO CLI

Colorado River Impacts: ag, municipal water, hydropower

Source: McCabe and Wolock 2007; Christensen et al. 2004

Central Arizona Project (CAP): Prob. of Level 2 shortages from 28%— based on historic simulation—to 54% mid-century and 75% late-century.

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Agriculture• Rain-fed crops: IPCC: 5-20% in output

for N. American early in this century.

Sources: IPCC WG2 Ch 14 (2007), Scott et al. 2006 (working paper)

• Irrigated crops will suffer from reduced water: e.g. drought costs in Yakima WA from $13 to $79m by mid- 21st century.

Yakima River flow

Dairy production• ⅓ of U.S. milk cows in WCI states: 2.8m cows, half in CA; output valued at >$9b/yr

• Sensitivities to temperature may milk production in 2100 by up to 6% in OR/WA, perhaps more in CA.

Sources: NASS, USDA, Bauman and Salathe 2008 (working paper), Hayhoe et al. 2004

Yakima County, WA

Wine• Worth ≈ $52b/yr in CA, $3b WA, $1b OR. In U.S.,

• Premium areas (in red) could 81% by 2100, shift to N and W.

Sources: Wine Institute 2008, OR Wine Board 2006, WA Wine

Commiss. 2008,White et al. 2006.

Current climate

Future climate

Wine• Worth ≈ $52b/yr in CA, $3b WA, $1b OR. In U.S.,

• Premium areas (in red) could 81% by 2100, shift to N and W.

Sources: Wine Institute 2008, OR Wine Board 2006, WA Wine

Commiss. 2008,White et al. 2006.

Sea level rise ≈1ft/century “excluding rapid… changes in ice flow” (IPCC)

“Potentially, the greatest impact… for N. America’s transportation systems will be flooding of coastal roads, railways, transit systems, and runways…” (NRC)

Sources: IPCC 2007, NRC 2008

Rising seas & bigger storm surges will likely require redesign of shoreline defenses, transportation systems (e.g. ports, roads) and other coastal infrastructure (e.g. water systems)

1 ft ≈ 300 mm

Shorter ski season will affect $6b industry, jobs, property values

Source: Outdoor Industry Foundation 2007, Butsic et al. 2008 (SF Fed working paper)

1°C (1.8°F)

Shorter ski season will affect $6b industry, jobs, property values

Source: Outdoor Industry Foundation 2007, Butsic et al. 2008 (SF Fed working paper)

2°C (3.6°F)

Other Likely Impacts

• Extreme weather—intense rain and windstorms, flooding, drought etc likely to increase in some areas along with costs of repair to buildings, communication, energy and transportation infrastructure, water and sewage systems.

• Many other sectors and regions likely affected: only a few sectors and regions have been studied.

• Salmon, fisheries, tourism: Low flows, warmer water, smoke intrusion from fires, winter floods; others possible (marine food chain effects).

• Unknown risk of “abrupt” climate change: Ocean acidification, collapse of West Antarctic and Greenland ice sheets, large scale methane releases.

ROGUE BASIN, OREGON: EXAMPLE OF MULTIPLE AND CUMULATIVE STESSORS

In Rogue: all 3 climate models show temperature rise of 3o F by 2040, 8o F by 2080 with summer temps up 15o F by 2080.

• Models show major loss of snowpack and major shift from Firs to hardwood Madrone and Oaks—driven by fire.

• Reduced water availability is result—just as temps—and population--rise and more water is needed, leading to greater conflict between ag. and urban uses.

• More smoke from fires, pathogens, and heat illnesses increase public health costs

• Could cause loss of key industries (wine and orchard) and out migration.

Summary• Economic impacts are already visible in West

• Costs will continually rise as it warms: will effect every economic sector, community & state.

• Many impacts stem from reduced snowpack and water availability.

• Many unknowns and risk of catastrophic impacts should not be discounted, e.g., with large in sea level and/or temperature.

• Costs of inaction certain to be many times greater than costs of fixing the problem and possibly irreversible.