Climate Change Will Lead to the Largest Transfer of Wealth in the Country's History

A pioneering study provides a detailed look at how the U.S. economy will suffer from climate change.

A groundbreaking study estimates the real economic consequences that climate change would bring to the U.S. by the end of the 21st century. Economic disparity will grow, hitting the American South the worst, while the country’s wealth will shrink. 


Researchers integrated climate science, econometric analyses and process models to compute a very detailed assessment of damages. The pioneering methods used by the study resulted in 29,000 simulations of the economy that focused on real-world costs and benefits to the communities in agriculture, health, crime, energy demand and labor.

For anyone who’s ever felt the effects of climate change to be too nebulous, the researchers provide concrete numbers - each one degree Celsius that global temperatures are going up will cost the U.S. economy 1.2% of its GDP. 

The new paper is the first to be released by the Climate Impact Lab, a consortium of 25 economists and policy experts. The group is guided by researchers from University of California, the University of Chicago, Rutgers University and Rhodium Group.

What the scientists accomplished gives us a much more precise picture of the repercussions of climate change. Previous estimates only looked at the country as a whole, while this study relied on dozens of regional microeconomic studies and observed data to build a model with unprecedented amount of detail. 

If no changes are implemented, the poorest counties in the U.S. will experience losses of up to 20% of their income by the middle of the 21st century. In another estimate, the U.S. GDP could shrink somewhere between 1.6 and 5.6% by 2100. Overall, the changing economics will cause “the largest transfer of wealth from the poor to the rich in the country's history,” said Solomon Hsiang, one of the leaders of the study who teaches public policy at the University of California, Berkeley. 

What’s more, because the researchers committed themselves to only using observed data, they omitted some of the decidedly negative potential effects of climate change that they could not yet quantify. Their study does not include “non-market goods” like damage done to nature, including the extinction of animals and loss of biodiversity. 

Similarly, this study doesn’t concern itself with “tail risks” - events with catastrophic consequences that are hard to predict. Many prognosticators believe global warming will cause problems like mega droughts, stronger hurricanes, social unrest, migration crises - all types of disasters that can also lead to military conflicts. 

What the study does predict is that the hot places will only get hotter and there will be large migrations from Texas, Florida and the Deep South due to worsening harvests, increases in energy costs and heat-related illnesses.

In an email interview with BigThink, Amir Jina, a postdoctoral scholar in economics at the University of Chicago explained why the South, in particular, will be so hard-hit according to their modeling: 

“One of the main things we learn from looking at these relationships in such detail is that there are a lot of threshold effects. So if we take mortality, cold days harm people, and hot days harm people. While days in the middle don't have major effects. If I am in a place that has a lot of cold days and I warm up a bit, I move away from the harmful days and into the less harmful ones. On the contrast, if I am near or at the threshold above which hot days will harm me, I'll just experience more and more damages. If turns out that many places in the South are very close to those thresholds for a number of sectors. What's more, a lot of the coastal damage is seen in southern states, so it is a perfect storm for them.”

Its not all bad news, however. Some parts of the country will do better, in particular New England, the Great Lakes and the Pacific Northwest. These areas should benefit from longer growing seasons and a decrease in deadly winter days. The income of counties in these parts could go up 10% by 2050, but even that could be dampened by issues like migration from communities under water due to rising sea levels or suffering in other ways from climate change. Mira cautions that no one will go unscathed, as “damages experienced in one part may have indirect effects in others.”

Overall, even if some areas can see a temporary economic upturn, the net effect will be very negative for the U.S., maintain the scientists, calling for measures to be taken.

“There is a chance for the US to avoid the types of damages we are showing, but it needs a bold policy response on both limiting the warming as well as adapting to the warming that we will inevitably experience,” said Jina.

You can read the study here, in Science magazine.

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Homo sapiens have been on earth for 200,000 years — give or take a few ten-thousand-year stretches. Much of that time is shrouded in the fog of prehistory. What we do know has been pieced together by deciphering the fossil record through the principles of evolutionary theory. Yet new discoveries contain the potential to refashion that knowledge and lead scientists to new, previously unconsidered conclusions.

A set of 8-million-year-old teeth may have done just that. Researchers recently inspected the upper and lower jaw of an ancient European ape. Their conclusions suggest that humanity's forebearers may have arisen in Europe before migrating to Africa, potentially upending a scientific consensus that has stood since Darwin's day.

Rethinking humanity's origin story

The frontispiece of Thomas Huxley's Evidence as to Man's Place in Nature (1863) sketched by natural history artist Benjamin Waterhouse Hawkins. (Photo: Wikimedia Commons)

As reported in New Scientist, the 8- to 9-million-year-old hominin jaw bones were found at Nikiti, northern Greece, in the '90s. Scientists originally pegged the chompers as belonging to a member of Ouranopithecus, an genus of extinct Eurasian ape.

David Begun, an anthropologist at the University of Toronto, and his team recently reexamined the jaw bones. They argue that the original identification was incorrect. Based on the fossil's hominin-like canines and premolar roots, they identify that the ape belongs to a previously unknown proto-hominin.

The researchers hypothesize that these proto-hominins were the evolutionary ancestors of another European great ape Graecopithecus, which the same team tentatively identified as an early hominin in 2017. Graecopithecus lived in south-east Europe 7.2 million years ago. If the premise is correct, these hominins would have migrated to Africa 7 million years ago, after undergoing much of their evolutionary development in Europe.

Begun points out that south-east Europe was once occupied by the ancestors of animals like the giraffe and rhino, too. "It's widely agreed that this was the found fauna of most of what we see in Africa today," he told New Scientists. "If the antelopes and giraffes could get into Africa 7 million years ago, why not the apes?"

He recently outlined this idea at a conference of the American Association of Physical Anthropologists.

It's worth noting that Begun has made similar hypotheses before. Writing for the Journal of Human Evolution in 2002, Begun and Elmar Heizmann of the Natural history Museum of Stuttgart discussed a great ape fossil found in Germany that they argued could be the ancestor (broadly speaking) of all living great apes and humans.

"Found in Germany 20 years ago, this specimen is about 16.5 million years old, some 1.5 million years older than similar species from East Africa," Begun said in a statement then. "It suggests that the great ape and human lineage first appeared in Eurasia and not Africa."

Migrating out of Africa

In the Descent of Man, Charles Darwin proposed that hominins descended out of Africa. Considering the relatively few fossils available at the time, it is a testament to Darwin's astuteness that his hypothesis remains the leading theory.

Since Darwin's time, we have unearthed many more fossils and discovered new evidence in genetics. As such, our African-origin story has undergone many updates and revisions since 1871. Today, it has splintered into two theories: the "out of Africa" theory and the "multi-regional" theory.

The out of Africa theory suggests that the cradle of all humanity was Africa. Homo sapiens evolved exclusively and recently on that continent. At some point in prehistory, our ancestors migrated from Africa to Eurasia and replaced other subspecies of the genus Homo, such as Neanderthals. This is the dominant theory among scientists, and current evidence seems to support it best — though, say that in some circles and be prepared for a late-night debate that goes well past last call.

The multi-regional theory suggests that humans evolved in parallel across various regions. According to this model, the hominins Homo erectus left Africa to settle across Eurasia and (maybe) Australia. These disparate populations eventually evolved into modern humans thanks to a helping dollop of gene flow.

Of course, there are the broad strokes of very nuanced models, and we're leaving a lot of discussion out. There is, for example, a debate as to whether African Homo erectus fossils should be considered alongside Asian ones or should be labeled as a different subspecies, Homo ergaster.

Proponents of the out-of-Africa model aren't sure whether non-African humans descended from a single migration out of Africa or at least two major waves of migration followed by a lot of interbreeding.

Did we head east or south of Eden?

Not all anthropologists agree with Begun and his team's conclusions. As noted by New Scientist, it is possible that the Nikiti ape is not related to hominins at all. It may have evolved similar features independently, developing teeth to eat similar foods or chew in a similar manner as early hominins.

Ultimately, Nikiti ape alone doesn't offer enough evidence to upend the out of Africa model, which is supported by a more robust fossil record and DNA evidence. But additional evidence may be uncovered to lend further credence to Begun's hypothesis or lead us to yet unconsidered ideas about humanity's evolution.