Risky Business Report Finds Climate Change Poses Major Economic Risks to California Industries

LOS ANGELES, April 2, 2015 /PRNewswire-USNewswire/ -- California could face significant disruptions to its water supply, agricultural productivity, and coastal infrastructure unless businesses and policymakers take immediate action to address climate change, according to a new report released today by the Risky Business Project.

The report, From Boom to Bust? Climate Risk in the Golden State, outlines how extreme heat and shifting precipitation patterns from unabated climate change will impact California's water supply, exacerbate drought and wildfire, and threaten one of the richest agricultural regions in the world. Rising temperatures will also lead to declines in labor productivity, drive up energy costs, worsen air pollution and pose serious health risks to Californians. Meanwhile, rising sea levels along the California coast could put billions of dollars of property and infrastructure at risk.

However, the report finds that California can significantly reduce these risks if policymakers and business leaders act now to reduce emissions and adapt to a changing climate. While state action alone will not be sufficient to avoid the worst impacts of climate change, California can be a model of climate leadership for the nation and the world.

"Climate change is an urgent threat—one which the people of California are already experiencing firsthand," said Risky Business co-chair Tom Steyer. "The Risky Business report puts the costs of inaction on climate change in a framework that our state's businesses can understand and utilize to mitigate risk and make good choices for California's communities and economy."

"Climate change has serious implications for water availability across our state, as well as for our coastal development, our workers, and our communities," said former U.S. Secretary of Housing and Urban Development and Risk Committee member Henry Cisneros. "California developers, builders and community leaders should take a hard look at this report and take steps now to reduce these risks."

"Climate change is a dire challenge facing California and our nation," said Risky Business Project co-chair Hank Paulson. "As droughts and wildfires plague California, we are already seeing the devastating toll that climate change is taking on our economy and way of life. Today's report shows that increasing temperatures and volatile weather patterns will further threaten the Golden State unless we act now to mitigate the damage."

"California's cities are home to most of the state's population and drive its economy, and they face significant risks from climate change. Coastal cities face dangers from rising seas, and every city in California should be concerned about possible impacts on the state's agriculture and water supply," said Michael R. Bloomberg, founder of Bloomberg L.P., 108th Mayor of New York City, and Risky Business Project co-chair. "The findings in this report can help local governments and businesses in California prepare for those risks and take steps to mitigate them."

The mission of the Risky Business Project is to quantify the economic risks to the U.S. from unmitigated climate change. Climate Risk in the Golden State highlights the risks to several sectors of California's economy, and across seven regions of the state. These risks include:

A dramatic increase in extreme heat across the state, especially in the San Joaquin Valley and Inland South regions

• By the end of the century, summers in California will likely be hotter than summers in Texas and Louisiana today, and the average number of extremely hot days—with temperatures above 95°F—will likely double or even triple.
• Rising temperatures will likely increase electricity use for residential and commercial cooling, driving up demand and costs across the state.
• California will likely see nearly 7,700 additional heat-related deaths per year by late century—more than twice the average number of traffic deaths annually in the state today.
• With 30% of California workers in "high risk" industries that are vulnerable to high temperatures, labor productivity is likely to decline across the state, most notably in the Sacramento and San Joaquin Valley regions.

Changes in the timing, amount, and type of precipitation in California, which could put the reliability of the state's water supply at risk

• California will likely see a 60 to 90% decline in the average number of days below freezing per year statewide.
• Warming temperatures will cause California to see a shift in precipitation from snow to rain, as well as a change in the timing of snowmelt.
• Changing precipitation patterns will impact California's snowpack—a major water reservoir for the state—and affect the freshwater supply for industries and communities across the state.
• Loss of snowpack will also disrupt California's winter tourism and recreation industries.

Widespread losses of coastal property and infrastructure due to sea level rise along the California coast

• If we continue on our current path, between $8 billion and $10 billion of existing property in California will likely be underwater by 2050, with an additional $20 billion at risk during high tide.
• By 2100, $19 billion in coastal property will likely be below sea level, with a 1-in-100 chance of more than $26 billion at risk.

Shifting agricultural patterns and crop yields, with distinct threats to California's major crops and other highly valuable commodities

• California's major crops, as well as its livestock and dairy operations, face distinct threats from climate-driven temperature variation across the state, which could have major repercussions on local and global markets.
• Without significant adaptation by farmers, several regions will likely see yield losses for heat-sensitive commodity crops like cotton and corn, with potentially high economic costs. For example, the Inland South region will likely take an economic hit of up to $38 million per year due to cotton yield declines by the end of the century.
• Changes in water availability, quality and timing due to climate change could have a significant impact on California's almost entirely irrigation-dependent agricultural economy.

Climate Risk in the Golden State is the third report from the Risky Business Project. In 2014, the Project released Risky Business: The Economic Risks of Climate Change to the United States, which employed a standard risk-assessment analysis to determine the range of potential consequences of climate change for each region of the U.S.—as well as for selected sectors of the economy. Earlier this year, it released Heat in the Heartland, a follow-up report that zeroed in on potential impacts in the Midwest. All three reports can be found at www.riskybusiness.org.

About the Risky Business Project:
Launched in October, 2013, the Risky Business Project focuses on quantifying and publicizing the economic risks from the impacts of a changing climate.

The underlying research was conducted by the Rhodium Group, an economic research firm that specializes in analyzing disruptive global trends. The Risky Business Project's co-chairs are Michael R. Bloomberg, Henry Paulson and Tom Steyer and are joined by members of a "Risk Committee," that is composed of former Treasury Secretaries Robert Rubin and George Shultz; former Senator Olympia Snowe; Alfred Sommer, M.D. former dean of Johns Hopkins University Bloomberg School of Public Health; former HUD Secretary Henry Cisneros; former HHS Secretary Donna Shalala and Greg Page, Executive Chairman of Cargill.

The Risky Business Project is a joint partnership of Bloomberg Philanthropies, the Paulson Institute, and TomKat Charitable Trust. All three organizations have provided substantive staff input to the project, and supported the underlying independent research being released today. Staff support for the Risky Business Project is provided by Next Generation, an independent 501c3 organization. Learn more at riskybusiness.org and on Twitter @ClimateRisk.

SOURCE The Risky Business Project