Putting climate impact estimates to work: the empirical approach of the American Climate Prospectus

Abstract:

The American Climate Prospectus (ACP), the technical analysis underlying the Risky Business project, quantitatively assesses climate risks posed to the United States’ economy in a number of sectors [1]. Four of these - crop yield, crime, labor productivity, and mortality – draw upon research which identifies social impacts using contemporary variability in climate.

We first identify a group of rigorous studies that use climate variability to identify responses to temperature and precipitation, while controlling for unobserved differences between locations. To incorporate multiple studies from a single sector, we employ a meta-analytical approach that draws on Bayesian methods commonly used in medical research and previously implemented in [2]. We generate a series of aggregate response functions for each sector using this meta-analytical method. We combine response functions with downscaled physical climate projections to estimate climate impacts out to the end of the century, incorporating uncertainty from statistical estimates, weather, climate models, and different emissions scenarios.

Incorporating multiple studies in a single estimation framework allows us to directly compare impacts across the economy. We find that increased mortality has the largest effect on the US economy, followed by costs associated with decreased labor productivity. Agricultural losses and increases in crime contribute lesser but nonetheless substantial costs, and agriculture, notably, shows many areas benefitting from projected climate changes. The ACP also presents results throughout the 21^stcentury. The dynamics of each of the impact categories differs, with, for example, mortality showing little change until the end of the century, but crime showing a monotonic increase from the present day.

The ACP approach can expand to include new findings in current sectors, new sectors, and new geographical areas of interest. It represents an analytical framework that can incorporate empirical studies into a broad characterization of climate impacts across an economy, ensuring that each individual study can contribute to guiding policy priorities on climate change.

References: [1] T. Houser et al. (2014), American Climate Prospectus, www.climateprospectus.org. [2] Hsiang, Burke, and Miguel (2013), Science.