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SOURCE The Risky Business Project
Ex-Treasury Secretaries Shultz, Rubin and Paulson Join Bloomberg, Steyer and other Leaders Urging Industry to Better Understand Risks to Economy
First-of-its-kind Risk Analysis Quantifies Potential for Economic Disruptions; Independent, Non-partisan Study Breaks New Ground in Climate Risk Assessment
NEW YORK, June 24, 2014 /PRNewswire/ -- The American economy could face significant and widespread disruptions from climate change unless U.S. businesses and policymakers take immediate action to reduce climate risk, according to a new report released today. The report, "Risky Business: The Economic Risks of Climate Change in the United States," summarizes findings of an independent assessment of the impact of climate change at the county, state, and regional level, and shows that communities, industries, and properties across the U.S. face profound risks from climate change. The findings also show that the most severe risks can still be avoided through early investments in resilience, and through immediate action to reduce the pollution that causes global warming. A press conference announcing the full Risky Business results will be webcast live at 8:30 a.m. EDT June 24. Link: http://riskybusiness.org/blog/risky-business-press-conference-live-stream.
The Risky Business report shows that two of the primary impacts of climate change-extreme heat and sea level rise-will disproportionately affect certain regions of the U.S., and pose highly variable risks across the nation. In the U.S. Gulf Coast, Northeast, and Southeast, for example, sea level rise and increased damage from storm surge are likely to lead to an additional $2 to $3.5 billion in property losses each year by 2030, with escalating costs in future decades. In interior states in the Midwest and Southwest, extreme heat will threaten human health, reduce labor productivity and strain electricity grids.
Conversely, in northern latitudes such as North Dakota and Montana, winter temperatures will likely rise, reducing frost events and cold-related deaths, and lengthening the growing season for some crops.
The report is a product of The Risky Business Project, a joint, non-partisan initiative of former Treasury Secretary Henry M. Paulson, Jr., Mayor of New York City from 2002-2013 Michael R. Bloomberg, and Thomas P. Steyer, former Senior Managing Member of Farallon Capital Management. They were joined by members of a high-level "Risk Committee" who helped scope the research and reviewed the research findings.
Risk Committee members include:
[REPORTERS: Click HERE to read statements from the full Risky Business Project Risk Committee]
The Risky Business Project represents a first-of-its-kind effort to combine the best available projections for changes in local climate conditions across the United States with empirically-derived estimates of the fiscal impact of those changes on key sectors of the U.S. economy. The Risky Business Project presents a new approach to understanding the possible costs of unmitigated climate change, providing businesses, investors, households and policymakers with critical information about the nature of the climate risks they face. The project's independent research team analyzed low-probability, high-impact climate events, as well as those most likely to occur. Consideration of such "tail risks" is critical for investors and businesses accustomed to buying insurance against potentially catastrophic losses.
"The Risky Business report shows us that our economy is vulnerable to an overwhelming number of risks from climate change," said Hank Paulson. "These risks include the potential for significant federal budget liabilities, since many businesses and property owners turn to the federal government as the insurer of last resort. But if we act immediately, we can still avoid most of the worst impacts of climate change and significantly reduce the odds of catastrophic outcomes-but the investments we're making today will determine our economic future."
"Damages from storms, flooding, and heat waves are already costing local economies billions of dollars-we saw that firsthand in New York City with Hurricane Sandy," said Michael R. Bloomberg. "With the oceans rising and the climate changing, the Risky Business report details the costs of inaction in ways that are easy to understand in dollars and cents-and impossible to ignore."
"Climate change is nature's way of charging us compound interest for doing the wrong thing," said Tom Steyer. "The Risky Business report confirms what many of us have long suspected: The longer we wait to address the growing risks of climate change, the more it will cost us all. From a business perspective, given the many benefits of early action, it would be silly to allow these risks to accumulate to the point where we can no longer manage them."
In analyzing different regions of the country, the Risky Business report found that the most likely impacts of climate change are distributed unevenly across the country, reflecting broad geographic diversity. The report also analyzed four different scenarios for levels of greenhouse gas emissions, and found that lower emissions scenarios carry considerably less risk; detailed impact results focused on the current pathway, commonly referred to as "business as usual."
[REPORTERS: Click HERE to explore the full report, including interactive maps that show likely impacts by U.S. region.]
Examples of likely impacts include:
The Risky Business Project found that early action to reduce greenhouse gas pollution can substantially reduce future risks. Impacts that are likely to occur between now and 2030 are largely the result of past emissions, and thus less avoidable.
"The United States faces an array of risks from climate change that are as diverse as we are as a country," said Kate Gordon, Executive Director of the Risky Business Project. "By looking at how climate affects specific regions and sectors, rather than at national averages that mask local conditions, our research found that the degree to which any single business may be harmed by a changing climate will depend largely on where that business is located. But we still live in a single integrated national economy-so just because it's not hot where you are, doesn't mean you won't feel the heat of climate change."
"This is just a first step," Gordon continued. "We urgently need to expand our understanding of the risks our nation faces so we can begin to take the steps necessary to reduce them."
About the Risky Business Project
Launched in October, 2013, the Risky Business Project (www.riskybusiness.org) focuses on quantifying and publicizing the economic risks from the impacts of a changing climate.
Risky Business Project co-chairs Michael R. Bloomberg, Henry Paulson, and Tom Steyer tasked the Rhodium Group, an economic research firm that specializes in analyzing disruptive global trends, with an independent assessment of the economic risks posed by a changing climate in the U.S. Rhodium convened a research team co-led by climate scientist Dr. Robert Kopp of Rutgers University and economist Dr. Solomon Hsiang of the University of California, Berkeley. Rhodium also partnered with Risk Management Solutions (RMS), the world's largest catastrophe-modeling company for insurance, reinsurance, and investment-management companies around the world. The team's complete assessment, along with technical appendices, is available at Rhodium's website, climaterisk.rhg.com.
The Risky Business Project is a joint partnership of Bloomberg Philanthropies, the Paulson Institute, and TomKat Charitable Trust. All three organizations provided substantive staff input to the Risky Business Project over the past 18 months, and supported the underlying independent research being released today. Additional support for this research was provided by the Skoll Global Threats Fund and the Rockefeller Family Fund. Staff support for the Risky Business Project is provided by Next Generation, an independent 501c3 organization.
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