ESTIMATES OF ECONOMIC IMPACTS OF CLIMATE CHANGE IN WCI STATES

1. ESTIMATES OF ECONOMIC IMPACTS OF CLIMATE CHANGE IN WCI STATES Bob Doppelt, Director Climate Leadership Initiative Institute for a Sustainable Environment University of Oregon Website: http:climlead.uoregon.edu bdoppelt@uoregon.edu 541-346-0786

2. University of Oregon Climate Leadership Initiative (CLI) CLI seeks to increase public understanding of the risks and opportunities posed by global climate change and to enhance climate mitigation, preparation, education and business development policy and program analysis. Research and technical assistance programs: • Climate literacy, communication and Climate Masters • Mitigation and preparation economics, policy, and program analysis • Renewable energy and sustainable development • Website: http://climlead.uoregon.edu

3. KEY POINTS 1. Economic effects of climate change in west are already visibleand willgrow in magnitudethe warmer it gets. 2. The costs of not acting are large and could be catastrophic compared to the costs of solving the problem. 3. The global economy is now ‘carbon constrained”--opens door to low-carbon business & job opportunities

4. From An Economic Perspective Climate Change is a Unique “Externality” • The emission of greenhouse gases imposes costs on others that are not borne by the emitter. • The costs will be felt over a long time period and over the entire world. • But, the exact nature of costs is difficult to pinpoint: they will be shaped by policies, market mechanisms, & other events. • Those most affected—future generations– cannot speak up for their interests.

5. Small Changes Can Produce Huge Costs • A 1O F change in temperature can mean millions of dollars in damage if the variance is from 32O F • The impact of the 1O F variance from 32O F gets even larger if it is accompanied by precipitation • Beware tipping points: e.g. When ocean waters rise above 82.4O F, evaporation  dramatically, creating big reservoir of energy for storms

6. IMPACTS ON THE GLOBAL SCALE: STERN REVIEW OF THE ECONOMICS OF CLIMATE CHANGE (October 2005, UK) • Bad News: • Failure to curb the greenhouse gasses will,within this century, reduce global GDP between 5-20% of GDP, the same scale of the Great Depression and WWI • The impacts will increase the warmer it gets.  • Good News • It is still possible to avert the most serious damage by rapidly taking strong action to reduce GHG emissions • Economic opportunities exist in wide range of new low-carbon goods and services--$500 billion market by 2050.

7. Studies and Sources Relevant to WCI • IPCC Working Groups I and II (2007) • The Economic Impacts of Climate Change in Oregon: A Preliminary Assessment (University of Oregon Climate Leadership Initiative 2005) • Impacts Of Climate Change On Washington’s Economy:  A Preliminary Assessment of Risks and Opportunities (University of Oregon Climate Leadership Initiative for the Washington Department’s of Ecology and CTED, 2006) • Our Changing Climate: Assessing the Risks to California (CA Climate Change Center 2006) • Climate Assessment for the Southwest (University of Arizona, 2008) • Hotter and Drier: The West’s Changing Climate (Rocky Mt. Climate Organization and NRDC, March 2008) • Weather and Climate Extremes in a Changing Climate:Region’s of Focus, North America, Hawaii, Caribbean, and U.S. Pacific Islands (U.S. Climate Change Science Program, June 2008) • The Economic Impacts of Climate Change and the Costs of Inaction (Maryland Center for Integrative Environmental Research August 2008) • A Primer on Climate Variability and Change in the SW (Udall Center University of Arizona, March 2001) • Preparing for a Changing Climate: The Potential Consequences of Climate Variability and Change, Rocky Mt./Great Basin Regional Assessment (Utah State University 2003)

8. Climate drivers in western North America through 2050 • CO2 and temperature (0.3o F to 1o F/decade) • Precipitation: Unknown or small changes in total amount ( AZ and NM,  elsewhere?) but likely  in winter,  summer • Shift from snow to rain in low elevations, earlier snowmelt. • Sea level rise of ≈1ft/century, maybe >>1ft. Source: IPCC 4AR WG1, SPM and Ch 11

9. Timber harvests • Forestry is ≈2% of GDP in OR; ≈1% in MT and WA; and ≈0.5% for all WCI states total. • Timber yields may  or  depending on CO2 fertilization effect, water availability, fire, pests • Yield in CAL  in 2100 by as much as 18% for mixed conifers, 30% for pine (assuming medium warming). • Potential non-linearities: i.e. BC pine beetle… Sources: BEA 2006, CCCC 2006

10. Mountain Pine Beetle in B.C. • Forestry in BC: 1% of jobs, 3% of GDP. • In affected areas, ≈50% of pines killed 1999-2008, ≈80% projected killed by 2013. • Harvest “surge” to be followed by economic decline. Sources: BC 2006a, BC 2006b

11. Mountain Pine Beetle in B.C. • Forestry in BC: 1% of jobs, 3% of GDP. • In affected areas, ≈50% of pines killed 1999-2008, ≈80% projected killed by 2013. • Harvest “surge” to be followed by economic decline. Sources: BC 2006a, BC 2006b

12. Mountain Pine Beetle in B.C. • Forestry in BC: 1% of jobs, 3% of GDP. • In affected areas, ≈50% of pines killed 1999-2008, ≈80% projected killed by 2013. • Harvest “surge” to be followed by economic decline. Sources: BC 2006a, BC 2006b

13. WildfiresImpacts on fire budgets, timber, property (urban-rural interface) and public health • If 20th century relationships hold, acres burned per year in mid-21st century will: • more than double in NM, UT • almost double in AZ, MT, WA, OR • smaller  or  in CA • Property damage plus firefighting costs (now ≈$100m for OR+WA, ≈$1b in CA). Sources: McKenzie et al. 2004, WA DNR, ODF, USFS, CA Legislative Analyst’s Office

14. Public Health • Heat-related illness & death: By 2100, 2-4 times  in extreme heat events New Mexico temperatures may 7°F or more this century Number of days with temps in the top 10and late-century. Source: CCCC 2006, WA DOH 2006. Source: NM Office of the State Engineer, 2006

15. Public Health • Heat-related illness & death: By 2100, 2-4 times  in extreme heat events. • Air pollution likely to increase ozone but may  particulate matter. (Now cause ≈8,800 deaths, cost $71b/yr in CA.) • Asthma likely to increase--already costs Washington State $400 million. • Wildcards: West Nile Virus and other vector-borne disease. Number of days with temps in the top 10% of historic range by mid-century and late-century. Source: CCCC 2006, WA DOH 2006.

16. Electricity: Demand side PNW • Demand  in winter (less heating),  in summer (more A/C). • Net effect may save $$ in MT, OR, WA. Source: John Fazio, Northwest Power and Conservation Council

17. Electricity: Demand side in SW • Net effect may increase costs in AZ, CA, NM. • 2-6%  in CA demand by mid-century, 3-20% by late-century. Source: CCCC 2006

18. Electricity: Supply side (hydro) • Total precipitation is key, but may  or . • Salmon/ESA/in-stream issues--wildcards. • Otherwise output will  in mid-winter and  in summer; may  value of electricity by ≈5%, or ≈$165m/yr in Pacific NW. Source: John Fazio, NWPCC; Payne et al. 2004

19. Municipal water supply Snowpack “saves” precipitation for use in summer, when demand is higher. Due to climate change, Seattle’s water system may hit its capacity constraint 10 years early, in 2050. Source: Richard Palmer, UW

20. PNW SNOW TRANSITION BASINS Impacts on municipal and ag water supplies, flooding, transportation Green = Rain-dominant Blue = Snow-dominant Red = Transition where slight temp rise will cause snow to fall as rain Source: Alan Hamlet, UW CIG for UO CLI

21. Colorado River Impacts: ag, municipal water, hydropower Central Arizona Project (CAP): Prob. of Level 2 shortages  from 28%— based on historic simulation—to 54% mid-century and 75% late-century. Source: McCabe and Wolock 2007; Christensen et al. 2004

22. Agriculture • Rain-fed crops: IPCC: 5-20%  in output for N. American early in this century. • Irrigated cropswillsuffer from reduced water: e.g. drought costs in Yakima WA  from $13 to $79m by mid- 21st century. Yakima River flow Sources: IPCC WG2 Ch 14 (2007), Scott et al. 2006 (working paper)

23. Dairy production • ⅓ of U.S. milk cows in WCI states: 2.8m cows, half in CA; output valued at >$9b/yr • Sensitivities to  temperature may  milk production in 2100 by up to 6% in OR/WA, perhaps more in CA. Sources: NASS, USDA, Bauman and Salathe 2008 (working paper), Hayhoe et al. 2004 Yakima County, WA

24. Wine • Worth ≈ $52b/yr in CA, $3b WA, $1b OR. In U.S., • Premium areas (in red) could  81% by 2100, shift to N and W. Sources: Wine Institute 2008, OR Wine Board 2006, WA Wine Commiss. 2008,White et al. 2006. Current climate

25. Wine • Worth ≈ $52b/yr in CA, $3b WA, $1b OR. In U.S., • Premium areas (in red) could  81% by 2100, shift to N and W. Sources: Wine Institute 2008, OR Wine Board 2006, WA Wine Commiss. 2008,White et al. 2006. Future climate

26. Sea level rise ≈1ft/century “excluding rapid… changes in ice flow” (IPCC) “Potentially, the greatest impact… for N. America’s transportation systems will be flooding of coastal roads, railways, transit systems, and runways…”(NRC) 1 ft ≈ 300 mm Rising seas & bigger storm surges will likely require redesign of shoreline defenses, transportation systems (e.g. ports, roads) and other coastal infrastructure (e.g. water systems) Sources: IPCC 2007, NRC 2008

27. Shorter ski season will affect $6b industry, jobs, property values 1°C (1.8°F)  Source: Outdoor IndustryFoundation 2007, Butsic et al. 2008 (SF Fed working paper)

28. Shorter ski season will affect $6b industry, jobs, property values 2°C (3.6°F)  Source: Outdoor IndustryFoundation 2007, Butsic et al. 2008 (SF Fed working paper)

29. Other Likely Impacts • Extreme weather—intense rain and windstorms, flooding, drought etc likely to increase in some areas along withcosts of repair to buildings, communication, energy and transportation infrastructure, water and sewage systems. • Many other sectors and regions likely affected: only a few sectors and regions have been studied. • Salmon, fisheries, tourism: Low flows, warmer water, smoke intrusion from fires, winter floods; others possible (marine food chain effects). • Unknown risk of “abrupt” climate change: Ocean acidification, collapse of West Antarctic and Greenland ice sheets, large scale methane releases.

30. ROGUE BASIN, OREGON: EXAMPLE OF MULTIPLE AND CUMULATIVE STESSORS • In Rogue: all 3 climate models show temperature rise of 3o F by 2040, 8o F by 2080 with summer temps up 15o F by 2080. • Models show major loss of snowpack and major shift from Firs to hardwood Madrone and Oaks—driven by fire. • Reduced water availability is result—just as temps—and population--rise and more water is needed, leading to greater conflict between ag. and urban uses. • More smoke from fires, pathogens, and heat illnesses increase public health costs • Could cause loss of key industries (wine and orchard) and out migration.

31. Summary • Economic impacts are already visible in West • Costs will continually rise as it warms: will effect every economic sector, community & state. • Many impacts stem from reduced snowpack and water availability. • Many unknowns and risk of catastrophic impacts should not be discounted, e.g., with large  in sea level and/or temperature. • Costs of inaction certain to be many times greater than costs of fixing the problem and possibly irreversible.