New research shows impacts of climate change on global economy and health will be much greater than anticipated

The impacts of climate change on the global economy and the health of billions of people will be much greater than previous studies have indicated, according to the most recent research.

Canada, however, is actually expected to see a net benefit from global warming and climate change when it come to impact on mortality, the research shows.

But that doesn’t mean efforts to reduce greenhouse gas emissions from the burning of fossil fuels should be slowed, economics and climate experts told an Energy vs. Climate webinar.

Overall, the worldwide impacts of climate change will significantly damage some economies and kill hundreds of thousands of people, said Dr. Michael Greenstone (photo at right), PhD, an economics professor, director of the Energy Policy Institute at the University of Chicago, and founding faculty director of the university’s new Institute for Climate and Sustainable Growth.

Greenstone is also co-director of the Climate Impact Lab, a multidisciplinary collaboration of researchers working to quantify the long-term impacts of climate change.

 “The direction of change is that we’re learning [from new research] is that the impacts of extreme heat are worse than we understood,” Greenstone said.

“As we start to recognize that the damage is not equal around the world, and when [the damages] occur matters, and how uncertain we are as we bring that into our reasoning and estimates, I think it’s leading to much larger estimates than we had before.”

But the global impacts of climate change are going to be highly inequitable, Greenstone said. “They’re going to land most dramatically in the [equatorial] belt around the planet where there are billions of people, where it’s hot and poor already.”

Recent studies indicate climate change would actually reduce mortality from very cold days in northern Canada, he said.

“The problem is there are not very many people who live in those very cold places. And lots of people who already live in places that are already hot,” he added. So on balance, studies indicate that the global distribution of people will lead to large increases in mortality from climate change.

Greenstone said research by him and his colleagues also found that the impacts of climate change depend on the wealth of people in various geographies.

If you lined up the world by deciles of income – the poorest 10 percent, the second-poorest 10 percent, all the way to the richest 10 percent – “what you would find based on our research is there will be large increases in mortality rates in the bottom three, four, five deciles of income due to higher temperatures,” he said.

The poor will spend very little on adapting to climate change, because they’re not rich enough to do so, he noted. In contrast, he said, in high-income places there will be almost no death from very hot days and/or extreme heat events and lots of spending on adaptation costs.

“If you wanted to be super nasty, what you would say is that climate change is going to cause the poor to die and the rich to spend some more money on air conditioning.”

Ed Whittingham (photo at right), a clean energy policy/finance professional and former executive director of the Pembina Institute, a national clean energy think tank, said if the world is concerned about climate justice, “We should really be opening our borders further to try to get those people in mid-latitude equatorial states who are most at risk into our country, so they’re exposed to less heat and they’re able to earn more income so the heat they are exposed to they can adapt to.”

Asked Greenstone: “Do we feel the same about everyone on the planet getting their incomes reduced by two percent and two percent of people dying? We probably don’t feel the same.”

Mortality increases on very hot and very cold days

This year is set to be the hottest year on record, surpassing the Paris Agreement on climate change’s threshold, with global temperatures likely more than 1.5 °C above the pre-industrial level, according to the European Union’s Copernicus Climate Change Service. 

Greenstone’s research has found there’s a U-shaped relationship between temperature and mortality. This means that on very cold days (minus 5 °C) and on very hot days (above 35 °C), there is an increase in mortality.

The mean estimate of the projected increase in global mortality rate due to climate change is 73 deaths per 100,000 population at the end of this century under a high-emissions scenario, according to his research. This effect is similar in magnitude to the current mortality burden of all cancers or all infectious diseases.

“What is new is that we’ve been able to characterize how that varies around the world,” Greenstone said.  “That U relationship varies a lot, depending on what the climate is where you’re located and how wealthy your location is.”

For example, Seattle and Houston are both very wealthy places from a global income perspective, he said. Very hot days occur regularly in Houston but are very infrequent in Seattle.

When the hot days come in Houston, the impact on mortality is small, but the full costs of those hot days aren’t small because the city has spent a lot of money to protect itself and its citizens, he said. This includes a system of underground tunnels nearly 10 kilometres long that connects 95 city blocks with food outlets, shops and services.

In Seattle, where very hot days occur very infrequently, the city has decided it’s not worth it to make those extra investments to this point. So the city is willing to accept the excess mortality on those rare very hot days, Greenstone said.

“The full cost of these hot and cold days really has to be measured both in the extra deaths but [also] in the adaptation expenditures that people are willing to undertake,” he said.

Location on the planet also matters. In Accra, the capital of Ghana in southwest Africa near the equator, Greenstone's research  projects an extra 85 deaths per 100,000 people due to very hot days. In contrast, Oslo, Norway is expected to see a reduction of 230 deaths per 100,000 people due to having fewer very cold days.

Accra is already hot and poor and has a very sharp increase in mortality on hot days and it’s going to be very challenging for that population, Greenstone said. “It’s really because of these places’ starting points on this U between temperature and mortality, and the steepness of the U in those places.”

Greenstone said his research shows that a very hot day arriving in Houston “is way less harmful than when it arrives in Delhi.”

Dr. David Keith (photo at right), PhD, professor and founding faculty director of the Climate Systems Engineering Initiative at the University of Chicago, pointed to the extreme heat event that led to the wildfire that engulfed Lytton, B.C. on June 30, 2021. Lytton burned down the day after the town’s – and Canada’s – hottest ever-recorded temperature: about 49.4 °C (121 °F).

B.C.’s chief coroner reported that 619 deaths were recorded due to heat exposure in the week of June 25 to July 1 during the heat event. Ninety-eight percent of the deaths occurred indoors and most of the deceased (67 percent) were over 70, had multiple chronic diseases and lived alone (56 percent).

Extreme heat could kill 1,370 people and send 6,000 to hospital each year in B.C. by 2030 if the province doesn't adapt its essential infrastructure, according to a report last year commissioned by the B.C. government.

Intense heat waves could also cost the province around $100 million in health care and more than $12 billion in lives lost annually by the decade's end, the report by the Canadian Climate Institute said.

Economic and health impacts of extreme heat

When it comes to the economic impacts of climate change, a study led by Matthew Kahn and Kamiar Mohaddes at Cambridge University found that a persistent increase in average global temperature by 0.04°C per year, in the absence of mitigation policies, would reduce worldwide real GDP per capita by 7.22 percent by 2100.

On the other hand, abiding by the Paris Agreement – thereby limiting the temperature increase to 0.01°C per annum – reduces the GDP per capita loss substantially to 1.07 percent.

The effects vary significantly across countries, the researchers found. Supplementary evidence, using data on a sample of 48 U.S. states between 1963 and 2016, showed that climate change has a long-lasting adverse impact on real output in various states and economic sectors, and on labor productivity and employment.

Keith noted that research also has revealed less obvious impacts from extreme heat.

He pointed to a 2017 study by Adam Isen and others that found one extra day above 32 °C for a fetus in the third trimester in the mother’s womb or an infant in the first year of life reduced adult income by age 30 by 0.1 percent for every day the temperature was above 32 °C.

The relationship between the extreme heat and reduced income isn’t clear, although there’s speculation it could be due to brain damage or premature birth or low birth weight.

Keith cited another study, by Jinsung Park at Harvard University, that found hot days reduce exam performance of high school students by up to 14 percent and lead to persistent impacts on high school graduation status.

Noted Greenstone: “If a day goes from 20 °C to 21 °C, its impact on human wellbeing is much smaller than if a day goes from 36 °C to 37 °C. A one-degree change matters a lot where’s it’s happening in the temperature distribution.”

Along with the impacts of climate change due to extreme heat, there are the health effects of air pollution, including particulate matter from burning coal.

“The costs of air pollution are quite substantial. I would call them the greatest current external threat to human wellbeing on the planet,” Greenstone said.

 His research led the University of Chicago to establish the Air Quality Life Index, which enables anyone to look up anywhere in the world, down to a country level, to determine the level of air pollution and expected reduced life expectancy.

“What emerged is that the average person on the planet is losing about two years of life expectancy [due to air pollution],” Greenstone said. “In very polluted places like India, it’s more like five years.”

Keith noted that rigorous studies of the U.S. Clean Air Act showed the legislation controlling air pollution added roughly 1 ½ years of life expectancy for the average American. The ratio of the monetized net benefits compared with the physical costs that government regulations imposed was about 10 to one.

Greenstone pointed out that China, which declared war on air pollution in 2014, “has been remarkably successful” and moved much faster than Canada, the U.S. and European countries to reduce particulate air pollution, especially from burning coal in China.

Given that the health impacts of climate change will be greater in southern latitudes, Whittingham said it raises the possibility of millions of “climate refugees” trying to relocate to Canada and other countries with temperate climates.

Donald Trump winning the U.S. presidential election also puts that country’s federal and state carbon price-based programs and incentives to reduce emissions at risk. That includes the “social cost of carbon” of about $51 per tonne of carbon dioxide that the Biden administration used to put a price on the environmental impact of carbon emissions.

During Trump’s first administration, he reduced the social cost of carbon to $10 per tonne and he withdrew the U.S. from the Paris climate agreement in 2020. Biden brough the U.S. back into the agreement in 2021 on his first day in office.

The Biden administration’s Inflation Reduction Act (IRA) with its hundreds of billions of dollars in investments in clean energy, reducing greenhouse emissions, electric vehicles and the energy transition, also could be at risk, Whittingham said.

Greenstone said he thinks there are parts of IRA’s tax incentives that “are pretty deep into the blood stream” and people have made investments, so such incentives will be hard to repeal. However, spending portions of the IRA will be easier to claw back, he added.

Whether it’s responding to climate change or air pollution, he said, “What society should be doing is looking for opportunities to do things that have net benefits.”

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