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Based on data from the National Centers for Environmental Information (NCEI), and as shown in the two graphs that follow, the global climate is clearly warming. In fact, February 2023 will very likely be designated as the 528th consecutive month in which temperatures, at least nominally, were above the 20th-century average. That means anyone under the age of 44 has—not even once—experienced normal or below-normal monthly temperatures.
At the same time, the idea that the climate is warming does not begin to reflect the full social and economic burdens of climate change. Why? Because it’s not so much the heat or temperature changes as it is the added energy associated with those higher temperatures.
As I wrote in July 2021, scientists at the National Aeronautics and Space Administration (NASA) and the National Oceanic and Atmospheric Administration (NOAA) documented that, since 2005, the Earth receives ~1 watt per meter squared more energy from the sun than the greenhouse gases allow to escape. At first glance, a difference of just 1 watt does not seem all that significant. But as I calculated, and as NASA confirmed my calculation, that one watt difference, over the entire surface of the earth, is the heat equivalent of ~25 times the entire world’s global energy consumption on an annual basis.
With that scale of energy absorbed within the atmosphere, it is not hard to imagine that the global heat engine—hence the Earth’s climate system—is greatly impacted by the heat equivalent of 25 times the world’s total energy use. And as noted in the table below, especially since the 1980s, climate scientists have been tracking the growing number of hurricanes, droughts, wildfires, floods, and storms as they create billion-dollar disasters and impact the nation’s infrastructure and communities.
In short, the tracking of billion-dollar climate disasters within the U.S. suggests that the economic burden has grown from roughly $21 billion per year in the decade of the 1980s, rising to a total impact of $165 billion in 2022. If we do nothing to slow the growth in greenhouse gas emissions, and if we then extend that trend through the year 2040, the scale of economic damage might grow to more like $480 billion in that year. The cumulative impact over the 18-year period 2022 through 2040 might be on the order of $5,600 billion (or $5.6 trillion, with all values reported in CPI-adjusted 2022 dollars). Yet, these values reflect only the direct impacts—that is, only the first cost of structural damages, including lost homes, other shattered buildings, and smashed vehicles.
In the spirit of a thought experiment to give us a better sense of scale, we might multiply these first dollar impacts by what we call the total output, employment, and value-added multipliers. The value-added estimate is the impact on Gross Domestic Product or GDP. Each of these three multipliers measure the direct, the indirect, and the induced effects of a dollar change in spending or climate damages. The direct impacts refer to the immediate disruption or first costs. The indirect effects refer to the disruption in the supply chains which deliver or consume the likely array of goods and services to households and businesses. Finally, the induced effects are the respending of incomes or wages made possible by the direct and indirect effects. The table below summarizes these impacts based on 2019 total multiplier coefficients.
In 2022, the direct impact of $165 billion in various climate damages may have cost the economy more like $511 billion in total output, and the damages may have also affected as many as 2.6 million jobs in that same year.
Long story short? In 2022, the direct impact of $165 billion in various climate damages may have cost the economy more like $511 billion in total output, and the damages may have also affected as many as 2.6 million jobs in that same year. The nation’s Gross Domestic Product (GDP) may be about $274 billion weaker compared to zero climate impacts. If we then extend this analysis to the cumulative impacts of $5,600 billion over the years 2023 through 2040 (as suggested in the previous table), employment impacts might rise from 2.6 to 4.9 million jobs in that 18-year period, to as many as 7.6 million jobs by the year 2040 itself. The bottom line?
It’s not simply that global temperatures are warming, but the energy associated with that increased heat is driving significant changes in the climate. These changes, in turn, are creating a much larger set of social and economic burdens that we don’t hear reported on the evening news hours, or in the many different policy arenas throughout the nation’s communities and businesses. In other words, as we suggested at the beginning of this essay, a warming climate likely implies both a significantly cooling but also a greatly disrupted economy.
There is neither a law of physics nor economics that prevents us from quadrupling the productive use of energy and other resources. Rather, it is much more an issue of imagination and our political will to get it done.
– John A. “Skip” Laitner