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US heavyweights unite to establish economic cost of climate change

Michael Bloomberg, Tom Steyer and Hank Paulson have teamed up to put a price tag on the climate impacts in the US

Source: Flickr/Barry Yanowitz

Source: Flickr/Barry Yanowitz

By Sophie Yeo

Ten of America’s leading politicians and businessmen are collaborating on a project that will map out the economic impacts of climate change on the USA.

Risky Business is a year-long initiative that aims to calculate how much the effects of climate change – including damage caused to agriculture, property and infrastructure by heat waves and sea level rise – will cost America on a region-by-region and a sector-by-sector basis.

The project is co-chaired by former New York mayor Michael Bloomberg, former US Secretary of the Treasury Hank Paulson and billionaire philanthropist and environmentalist Tom Steyer.

“The United States faces unprecedented risks from climate change, and quantifying those risks is a critical first step to mitigating them,” said co-chair Michael Bloomberg.

Its initial results are set to be released in the summer, months before world leaders convene in New York to take part in UN chief Ban Ki-moon’s climate summit.

Paulson said the team had been carefully selected in order to gain maximum publicity and political leverage.

“When we launched Risky Business, we knew it was critical to make sure the risk assessment ends up in the hands of the leaders who are best-positioned to take action,”he said.

Rising costs

The initiative demonstrates a rising concern at the price tag that climate change could place on the United States, as the country finds itself increasingly vulnerable to extreme weather events.

A report by global reinsurance firm Aon Benfield shows that the US suffered the two costliest natural disasters in 2012: Hurricane Sandy at $65 billion, and a year-long Midwest drought at $35 billion.

While the cost to life may be less extreme than in countries such as the Philippines, where Supertyphoon Haiyan recently caused $10 billion in economic damage, America’s densely built up areas and expensive infrastructure means that costs can spiral dramatically when bad weather hits.

“We know that the costs of these events can be measured in lost lives and lost livelihoods, lost homes, lost businesses, hundreds of billions of dollars in emergency services and disaster relief,” said President Barack Obama, when he announced his Climate Action Plan in June.

Leadership

Today, the co-chairs appointed a committee of seven other leaders, with whom they will work in producing the analysis, which will be delivered this summer.

The committee members are:

  • Henry Cisneros, former US Secretary of Housing and Urban Development and former Mayor of San Antonio, Texas
  • Gregory Pageformer CEO and current Chair of the Board of Cargill, Inc.
  • Robert Rubin, Co-chairman of the Council on Foreign Relations and former US Secretary of the Treasury
  • George Shultz, former US Secretary of State
  • Donna Shalala, President of the University of Miami and former US Secretary of Health and Human Services
  • Olympia Snoweformer US Senator representing Maine
  • Al SommerDean Emeritus at the Bloomberg School of Public Health, Johns Hopkins University

“These new members of our Risk Committee have deep expertise across different sectors of the American economy, and they will be instrumental in helping us develop the rigorous metrics we need to battle climate change effectively,” said Bloomberg.

They will work with the co-chairs to write up an assessment of the economic risk of climate change in the US, based upon science, economic research and models. The work will be considered by an Expert Review Panel to review the methodology behind the economic analysis.

They hope to then engage with the sectors who face the highest economic risk, and help them to prepare a response to the challenges ahead.

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