Disasters and weather stresses have cost New Mexico $5.3 billion over the past 42 years, while nationally, extreme weather events have caused $150 billion in damage over the past 42 years. single year passed.
These are two of the conclusions of a report on the economic impact of climate change commissioned by a non-partisan group of environmentally conscious businesses called E2 – short for Environmental Entrepreneurs.
E2 wanted to assess the direct economic impacts of climate change on a national scale and determine whether the effects are getting worse as the weather becomes hotter, drier and more unpredictable. The study looked at the cost of weather disasters to states, counties and congressional districts since 1980 – and it turned out to be several billion dollars collectively, with threats of billions of dollars on the horizon as the climate continues to warm.
New Mexico’s total of $5.3 billion is primarily due to drought ($2.66 billion) and wildfires (about $1.5 billion), according to the report. The data did not include damage from the recent Hermits Peak/Calf Canyon Fire — the largest fire in the state’s recorded history — and subsequent flooding on the scorched hills, which together would add billions of dollars altogether.
Bob Keefe, executive director of E2, said he hoped this report would contribute to the conversation about climate change as an economic issue.
“We’ve talked about climate change in this country and around the world as an environmental issue,” Keefe said. “We talked about it as a health issue. We talked about it as a social justice issue. Of course, it’s all that and more, but it also becomes a huge economic problem.
Awareness is growing that climate change has economic consequences and that substantial investments must be made to mitigate and adapt, Keefe said.
On Wednesday, Keefe made a presentation on the topic to the Legislature’s Income Stabilization and Fiscal Policy Committee, a sign that more leaders are seeing climate change as a practical issue, in dollars and cents, and not just as a green concept, he said.
No one asked if climate change was real, or expressed doubt that it was man-made, Keefe said. Panel members focused strictly on the economy, he said.
Increasingly severe weather events make it impossible to dismiss the financial impacts of global warming, Keefe said. New Mexico just suffered its worst wildfire season, Florida was hammered by its costliest hurricane, and Lakes Mead and Powell are at record highs.
“It becomes, unfortunately, an easier story to tell,” Keefe said.
The report was written by PSE Energy Healthy, a California-based nonprofit that studies how energy production and use can affect public health and the environment.
The group relied on a compendium of sources, including NASA, the Federal Emergency Management Agency and the National Oceanic and Atmospheric Administration.
Because the tracker only goes through June, it does not include damage estimates from New Mexico’s worst wildfires this year, including the Hermits Peak/Calf Canyon fire.
Additionally, flooding costs for 42 years are listed as nil, although post-wildfire flooding inflicted significant damage, in part due to storm runoff carrying contaminants and debris into yards. water.
Keefe said the report does not cover the second half of this year because data was not available.
He noted that the $2.5 billion federal fire relief fund recently passed by Congress would significantly increase the price, and that this is only a “down payment” on what the federal government will pay in the years to come.
Two planned burns that later strayed merged into the inferno that burned 341,000 acres and destroyed about 500 homes. The US Forest Service said a lack of consideration for how climate change has parched the landscape and made weather more unpredictable were factors in the gigantic blaze.
The report lists the states, counties and congressional districts that suffered the most damage as a result of a weather event or trend.
The three states with the highest damage costs were the most vulnerable to extreme storms. These are Texas, $361 billion; Louisiana, $287.4 billion; and Florida, $257.2 billion.
New Mexico is at the bottom of the list for overall costs, and none of its counties are in the top 100 for climate and weather-related risk of loss.
Keefe said that’s likely because the state is sparsely populated for its land mass.
However, the state’s three congressional districts together are expected to lose $140 million a year to the drought. And Luna County is in the top 10 areas expected to experience the most extreme heat by 2040.
Drought, wildfires, storms, floods and out-of-season frosts all pose risks to agriculture and will contribute to lower crop yields in agricultural regions of the country, according to the report. This would include New Mexico’s $3 billion agricultural industry.
An economist noted that the report focuses on the costs of disasters, but there are other impacts in a changing climate, such as rising temperatures warming up already relatively warm regions.
Longer-term costs include reduced access to credit, reduced investment, labor migration and lower worker productivity, said Galina Hale, professor of economics at the University of California in Santa Cruz and former Federal Reserve economist.
Hale, who studies the intersection of economics and climate change, said she was glad the report highlighted the disproportionate impacts on disadvantaged communities.
“In the same way that climate change is making hot areas hotter and arid areas drier, it’s also likely to make low-income communities suffer more,” Hale said.
Keefe agreed that the report does not take into account all the financial impacts, such as the health care costs of people breathing wildfire smoke and the loss of wood during wildfires.
“If anything, the numbers we have are pretty darn conservative,” Keefe said.
The report is not all gloomy. It highlights efforts to reduce the greenhouse gases responsible for global warming, such as the development of more renewable energy, the gradual shift to electric vehicles and the recently passed law on reducing inflation.
The new federal law makes $369 billion available for tax credits, programs and incentives aimed at reducing greenhouse gas emissions to 40% below 2005 levels by 2030.
Climate change creates economic challenges but also business opportunities, whether it’s installing wind turbines or creating new climate-friendly technology, Keefe said.
Hale said financial institutions should base their pricing on climate-related risks — for example, a company that emits heavy greenhouse gases has a greater risk of taking regulatory action.
This is important for risk management, but also for investing more in companies that reduce their climate impacts and work towards climate solutions, she said.
Businesses can protect themselves from regulatory risk by ensuring that all long-term capital investments, such as plant and equipment, are emission-free. Otherwise, they could become obsolete, she said.
Keefe said he sells being climate friendly as good economics, which eliminates politics.
“Look, I don’t care if you like polar bears,” Keefe said. “I don’t care if you believe in science. I don’t care if you drive a Prius or a pickup truck. The fact is, the cost of climate change is hitting us all in our pocketbooks. »