Climate change could cost US businesses billions every year
A new report has set out the potential negative business consequences of climate change in the US.
Climate change has been a difficult issue for many businesses, caught between a dependence on fossil fuels and the demand for more sustainable ways of operating. A new report compiled by political and business figures from the US has highlighted the potential cost to companies of failing to take action.
The bipartisan Risky Business report uses what it describes as a “standard risk-assessment approach” to identify the potential consequences of inaction on key areas. It focuses on damage to coastal areas from increased storm surge and rising sea levels, changes to agricultural production that will come from an altered climate, and how higher temperatures will affect public health and the productivity of the US workforce.
Although it focuses on the US, the findings are a stark warning for businesses around the world. The extent of the damage could be huge.
In the next 15 years, the report finds that the total cost of hurricanes and coastal storms across the US could reach as high as $35 billion per year.
Some counties in the Midwest and southern states might see a drop of up to ten per cent in yields of key current crops over the next five to 25 years. In the same period, ratepayers will have to find $12 billion a year to fund new power generation capacity.
But the long-term outlook is even more striking.
Accounting for current trends, by 2050 the value of the coastal properties that will be below sea level stands between $66 billion and $106 billion, with the Atlantic coast and southeast at the highest risk.
Productivity among those who work outside could drop by as much as three per cent. Extreme heat in some regions could lead to any workers without access to air conditioning facing health problems – and demand for air conditioning in itself will put pressure on energy supplies.
By the end of this century, some states could lose anything from 50 to 70 per cent of their crop yields unless they change what they grow to suit conditions.
It looks fairly apocalyptic, but the report does say there are steps businesses can take. Changing practices to become more resilient is just one piece of the puzzle – they also need to invest in their own sustainability and make efforts to lead the way on tackling climate change and cutting carbon emissions. With the right policy responses from governments, it could go a long way towards mitigating the damage.