ABSTRACT

How Climate Change May Affect the U.S. Economy [April 4, 2022]   [open pdf - 1MB]

From the Summary: "There is general consensus within the scientific community that human activities have increased greenhouse gas concentrations in the atmosphere and that the increased concentrations have contributed to a rise in global average temperatures. The United Nations' Intergovernmental Panel on Climate Change recently assessed, 'Overall adverse economic impacts attributable to climate change, including slow-onset and extreme weather events, have been increasingly identified.' Two of the main avenues through which climate change can affect GDP [Gross domestic product] in the short and long terms are productivity and investment effects. Productivity is a key determinant in long-term economic growth--as productivity increases, economies can produce more goods and services with the same level of resources, which in turn tends to increase well-being and income. Business investment is also a determinant of long-term growth insofar as it contributes to the domestic capital stock, which is directly related to the economy's overall productive capacity. Research suggests that climate change could negatively impact productivity and business investment, as rising temperatures and heat waves could result in lower output per worker. Declines in productivity and production could decrease businesses' incentive to invest, particularly in a scenario in which physical capital is routinely damaged or destroyed due to the effects of extreme weather events to a point where further investment becomes unattractive. Climate change can also bring some benefits (such as fewer extreme cold events) and opportunities (opening of Arctic shipping lanes), although the net effects of climate change on the economy are generally expected to be increasingly adverse and widespread on net."

Report Number:
CRS Report for Congress, R47063
Author:
Publisher:
Date:
2022-04-04
Copyright:
Public Domain
Retrieved From:
Congressional Research Service: https://crsreports.congress.gov/
Format:
pdf
Media Type:
application/pdf
URL:
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