Global Warming to cost US $3.8 trillion by 2100

US climate change costs will hit $3.8 trillion by 2100 if inaction on climate change continues, wiping 3.6 per cent off the country's GDP.

That is the stark conclusion of a major new study from researchers at Tufts University commissioned by lobby group the Natural Resources Defense Council, which updates the methodologies used by the influential Stern Review and applies them to the latest scientific data.

The report applies economic computer models to the most pessimistic of the climate forecasts deemed to have a two thirds probability of occurring by the UN's Intergovernmental Panel on Climate Change (IPCC). Under this scenario, average temperatures are expected to increase by 13 degrees Fahrenheit in most of the United States and 18 degrees Fahrenheit in Alaska by 2100.

The modelling found that such climactic changes would result in annual costs of $3.8 trillion in today's dollars.

It was accompanied by a "bottom up" analysis of the financial impact of four specific climate change threats: increased incidence of hurricanes, property losses as a result of sea level rises and other issues, increased energy costs and increased water costs.

It concluded that the cost of hurricane damage would reach $422bn a year by 2100, real estate losses would total $360bn, increased energy costs would hit $141bn and water costs would add up to $950bn, resulting in a combined price tag of $1.9 trillion, or 1.8 per cent of US GDP.

"Droughts, floods, wildfires, and hurricanes have already caused multibillion-dollar losses, and these extreme weather events will likely become more frequent and more devastating as the climate continues to change," the report said. "Tourism, agriculture, and other weather-dependent industries will be hit especially hard, but no one will be exempt. Household budgets, as well as business balance sheets, will feel the impact of higher energy and water costs. "

The also report warned that certain regions would be particularly badly effected with projected sea level rises of 45 inches by 2100 likely to make much of the South Eastern uninhabitable and water stress expected to pose a serious threat to many western states.

Lead author Frank Ackerman said that the cost estimates included in the report were also likely to be an underestimate. "Some important impacts are priceless, so the real situation is worse than the numbers can convey," he warned. "But the numbers, for those impacts we can put prices on, are bad enough. Climate change is on a collision course with the US economy, long before the end of the century, unless we act now."

Dan Lashof, director of NRDC’s Climate Center, said that the report's fundings underlined the Stern Review's conclusion that early action to tackle climate change will prove more cost effective than failing to act and trying to adapt. "The longer we wait, the more painful and expensive the consequences will be," he said, adding that the onus was now on US lawmakers to approve the proposed Lieberman-Warner Act which would allow them to set clear emission reduction targets and implement a nationwide cap-and-trade scheme.