Summary
of US Estimates Summary
of Global Estimates
Certainly climate change will impact various sectors of national economies: agriculture, energy, construction, timber, and commercial fishing. It will also impact various aspects of individuals' lives through its damage to infrastructure, health, and recreation. In order to determine the appropriate government action to take in light of these potential consequences, it is helpful to consider these impacts within the framework of a cost-benefit analysis. Since the benefits of climate change mitigation strategies are the avoided damages of implementing such policies, it becomes important to estimate the market and nonmarket damages that will be incurred because of climate change. Furthermore, since global climate change is necessarily an issue that must be addressed at an international level, it is important to consider global damage estimates of climate change. Through such analyses, decision makers can better ensure the prudence of their actions.
To arrive at an informed policy decision, it is important to quantify the market and nonmarket impacts of climate change. Consequently, this table includes a summary of the published estimates of impacts of climate change associated with a doubling of atmospheric concentrations of CO2. Although there is some disparity between such estimates, it is important to note that most estimates suggest climate change will result in a net loss to the United States. Although the most recent estimates by Mendelsohn and Neumann (1999) suggest that the impacts of climate change will be positive, it is important to note that their study has not quantified significant nonmarket impacts of climate change.
Estimates of US Climate Change Impacts for Doubling of CO2
| Sector |
Nordhaus 1991 (3oC) |
Cline 1992 (2.5oC) |
Fankhauser 1995 (2.5oC) |
Tol 1995 (2.5oC) |
Titus 1992 (4oC) |
Mendelsohn and Neumann 1999 (2.5oC) |
| Market Impacts: | ||||||
| Agriculture | -1.1 | -17.5 | -8.4 | -10.0 | -1.2 | 11.3 |
| Energy | -1.1 | -9.9 | -7.9 | - | -5.6 | -2.5 |
| Sea Level | -12.2 | -7.0 | -9.0 | -8.5 | -5.7 | -0.1 |
| Timber | - | -3.3 | -0.7 | - | -43.6 | 3.4 |
| Water | - | -7.0 | -15.6 | - | -11.4 | -3.7 |
| Commericial fishing | - | - | - | - | - | 0.4 |
| Total Market | -14.4 | -44.7 | -41.6 | -18.5 | -67.5 | 8.4 |
| Nonmarket Impacts: | ||||||
| Human life | - | -5.8 | -11.4 | -37.4 | -9.4 | - |
| Migration | - | -0.5 | -0.6 | -1.0 | - | - |
| Extreme events | - | -0.8 | -0.2 | -0.3 | - | - |
| Human amenity | - | - | - | -12.0 | - | - |
| Recreation | - | -1.7 | - | - | - |
4.2 |
| Species loss | - | -4.0 | -8.4 | -5.0 | - | - |
| Urban infrastructure | - | -0.1 | - | - | - | - |
| Air pollution | - | - | - | - | -2.5 | - |
| Water quality | - | - | - | - | -32.6 |
-5.7 |
| Mobile air conditioning | - | - | - | - | -2.5 |
- |
| Total nonmarket: | -41.1 | -16.4 | -27.9 | -55.7 | -71.7 | -34.3 |
| Total (market and nonmarket sectors) | -55.5 | -61.1 | -69.5 | -74.2 | -139.2 |
8.4a |
| % of 1990 GDP | -1.0 | -1.1 | -1.3 | -1.5 | -2.5 |
0.2a |
| aEstimates do not include nonmarket impacts because of data reporting. |
Source: Climate Change 1995: Social and Economic Dimensions of Climate Change. New York: Cambridge University Press, 1996; The Impact of Climate Change of the United States Economy. New York: Cambridge University Press, 1999.
Since the issue of climate change is inherently global in nature, it is also important to consider the global impacts of climate change in order to recognize opportunities for international cooperation.
|
Region |
Fankhauser (1995) |
Tol (1995) |
| bn $ | % GDPa | bn$ | %GDPa | |
| European Union | 63.6 | 1.4 | - | - |
| United States | 61.0 | 1.3 | - | - |
| Other OECD | 55.9 | 1.4 | - | - |
| OECD America | - | - | 74.2 | 1.5 |
| OECD Europe | - | - | 56.5 | 1.3 |
| OECD Pacific | - | - | 59.0 | 2.8 |
| Total OECD | 180.5 | 1.3 | 189.5 | 1.6 |
| Eastern Europe/ Former USSR | 18.2b | .7 | -7.9 | -0.3 |
| Centrally planned Asia | 16.7c | 4.7c | 18.0 | 5.2 |
| South and Southeast Asia | - | - | 53.5 | 8.6 |
| Africa | - | - | 30.3 | 8.7 |
| Latin America | - | - | 31.0 | 4.3 |
| Middle East | - | - | 1.3 | 4.1 |
| Total non-OECD | 89.1 | 1.6 | 126.2 | 2.7 |
| Worldd | 269.6 | 1.4 | 315.7 | 1.9 |
| a Note that the GDP base may
differ between the studies.
b Former Soviet Union only. c China only. d Percentage of GDP figures are based on market exchange rate GDP. The order of magnitude of estimates does not change if uncorrected damage categories are purchasing-power-parity adjusted and expressed as a fraction of PPP-corrected GDP. |
Source: Climate Change 1995: Social and Economic Dimensions of Climate Change. New York: Cambridge University Press, 1996.
As these damage estimates indicate, climate change is likely to impose a disproportionate financial strain on less-developed countries, whose total estimated damages are anticipated to range between $269.6 B and $315.7 B annually. Based on these estimates, Asia and Africa are likely to suffer from excessive damage. These damage estimates are particularly useful to policy decisions when used jointly with global cost estimates. Although the issue of Joint Implementation reaches slightly beyond the scope of this study by touching on equity issues; global benefit estimates, used in conjunction with global cost estimates, can help the United States build alliances with other nations and identify more appropriate, efficient global solutions to this issue.