If the sight of another river overflowing onto Main Street or news of another Little League game getting cancelled due to a scorching heat wave still isn’t enough to convince skeptical Americans that global warming is a serious threat, maybe this forecast will help move the needle: climate change could wipe out your retirement account and your teenager’s college fund.
The first-of-its-kind comprehensive study of the risks posed by climate change to the American economy was released on Tuesday in New York by the Risky Business Project, an initiative co-chaired by former New York City mayor Michael Bloomberg, former U.S. Treasury Secretary Henry Paulson, and the retired hedge fund manager and environmental advocate Tom Steyer. The group’s sobering report highlights various threats to major U.S. business sectors, including agriculture, health care, and real estate—and underscores the fact that inaction is not an economically viable option.
“From a business perspective,” Steyer said at a press conference held in conjunction with the report’s release, “it would be silly to allow these risks to accumulate to the point where we can no longer manage them.”
The study makes clear why. Somewhere between $66 billion and $106 billion worth of U.S. coastal property is likely to be sitting below sea level by the year 2050 unless we begin cutting dangerous carbon pollution and other greenhouse gas emissions; by 2100, the value of property lost to rising sea levels could increase to somewhere between $238 billion and half a trillion dollars. In the near term, we can expect the annual price tag for hurricanes and other coastal storms to average $35 billion within the next 15 years. (Rhodium Group, an economic research firm, was commissioned to write the independent report with input from climate scientists.)
For a lot of people, money really does talk. So when high-profile billionaire capitalists sit down with the people who once controlled the nation’s treasury, and they all begin to speak in one voice regarding the urgent need to stop global warming—well, then, you get some folks’ attention. Tuesday’s speakers were titans: joining Steyer at Tuesday's press conference were Bloomberg, recently named a U.N. Special Envoy for Cities and Climate Change; Paulson, who ran the Department of the Treasury from 2006 to 2009 under President George W. Bush; Robert Rubin, a Treasury secretary during the Clinton administration; and Gregory Page, the executive chairman and former CEO of food giant Cargill.
One idea stood out among others for its boldness—not to mention its capacity to strike fear into the hearts of big-time corporate polluters and greenhouse-gas emitters. After calling the economic risks of climate change “more pernicious and cruel than those of the  financial crisis,” Paulson assigned the responsibility of assessing those risks, at least partially, to investors. “Perhaps the SEC [Securities and Exchange Committee] should require disclosures,” he ventured. Rubin seconded the idea that publicly traded companies should have to report their greenhouse gas emissions—as well as any assets that could potentially be damaged or left stranded by climate disasters.
If figures like Rubin and Paulson, the latter of whom received much attention for his recent New York Times op-ed calling for a carbon tax, are expressing this much worry about potential threats to the nation’s economy from climate change, perhaps more recalcitrant members of the business and financial communities may take notice. If investors at both the institutional and individual levels were suddenly to begin shifting around large sums of money based on climate modeling data—treating climate change, appropriately, as a financial risk to be avoided—the effects on markets could be immense.
From Paulson’s perspective, climate change represents an even larger and more intractable problem than the 2008 financial crisis, with which he was intimately involved. Witnessing our inaction on this clear and present danger, he wrote in the Times, is like “watching as we fly in slow motion on a collision course toward a giant mountain.” Let’s hope it doesn’t take another crash to get us to turn this plane around.
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