Climate change could cost US Gulf Coast billions: study
WASHINGTON — The US Gulf Coast, battered by hurricanes and a devastating oil spill, faces cumulative losses of 350 billion dollars if it fails to address the effects of climate change, a new study said Wednesday.
The joint research by insurance firm Swiss Re and energy company Energy Corporation warns that Texas, Louisiana, Mississippi and Alabama face annual losses of two to three percent of GDP by 2030 if they fail to act.
“Wind and storm surge damage today already amounts to an average 14 billion dollars per year in the region,” said the study, which was released as the Gulf region commemorated six months since the start of the BP oil spill.
“Severe climate change, coupled with economic growth and land subsidence, could drive up expected annual losses by up to 65 percent,” the study warned.
The research looked at assets across 77 coastal parishes and counties in the four states, and assessed the potential impact of natural disasters on the region’s economy, particularly the electric, gas and oil sectors.
It warned that the three main current risks to the region — hurricanes, subsidence and rising sea level — were only likely to increase in coming decades.
“However, a key point is that regardless of climate change, the Gulf Coast faces an increase in risks from natural hazards going forward,” the study said, because economic growth in risk-prone areas and land subsidence unrelated to climate change are expected to increase regardless.
The study recommends nine “no-regrets measures” that could mitigate the financial impact of future natural hazards, including better building codes, “beach nourishment,” wetland restoration and levee systems.
“By investing 50 billion dollars in cost-effective measures over the next 20 years… Gulf Coast communities can avert up to 135 billion dollars in annual losses,” the study said.
“There are potentially attractive measures that can keep the risk profile of the Gulf Coast constant over the next 20 years,” said Andreas Spiegel, Swiss Re’s senior climate change advisor.
The firm also said remaining risks in the region could be mitigated by increased insurance.