Rising sea levels and the increased frequency of wild fires and extreme weather events could cost the Californian economy billions of dollars a year and put $2.5tr (£1.7tr) of real estate assets at risk, according to a major new report from the University of California, Berkeley (UCB).
The study looked at three separate global warming scenarios and found that the insurance and real estate sectors alone could face annual bills of between $300m and $3.9bn a year as they attempt to cope with the impacts of climate change.
Report co-author, UCB adjunct professor David Roland-Holst, said the findings highlighted the economic case for taking earlier action to cut carbon emissions and adapt to the unavoidable effects of climate change.
"Our report makes clear that the most expensive thing we can do about climate change is nothing," he said. "As we learned in New Orleans, turning your back on the threat of natural disaster doesn’t make it go away."
The report found that alongside insurance and real estate, many other sectors are at risk of multibillion-dollar bills as a result of climate change.
For example, it is estimated that $21bn of energy sector assets, $500bn of transport sector assets, $113bn of agricultural assets, $5bn of water industry assets and $98bn of tourism assets are at risk of climate-induced damage.
The report, which was commissioned from non-profit organisation Next 10, concludes that urgent action is required by both the public and private sector to enhance climate change risk assessment and better incentives investments in both low-carbon and climate adaptation measures.
Roland-Holst insisted that such adaptation measures presented a significant economic opportunity for California. "We also know from history that decisive policy can turn adversity into economic renewal," he said. "WPA, the Marshall Plan, the space race, and even Homeland Security transformed threats into employment and growth. We can ignore change that is already happening or we can turn the threat of climate damage into a dynamic opportunity for change, renewal, and growth."
He added that with the effects of rising temperatures already being felt, all businesses and governments need to "evaluate their economic vulnerability and begin adaptation now".
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