The Risky Business of Climate Change

  • Outdoor workers could face health risks in a warming climate. Al Williams has spent more than 30 years on construction sites. He's working on the latest addition to the city's skyline, the Tower at PNC Plaza. Photo: Ryan Loew, 90.5 WESA

July 18,  2014

The economy could face significant disruptions from climate change, according to the new report Risky Business: The Economic Risks of Climate Change in the United States.  This report was released by the California think tank called Next Generation and offers analysis of business risks down to the county level.

"The risky business project is really an ongiong effort to talk about climate risk in mainstream business terms to try to avoid the two big partistan pitfalls that we often see: arguments over the science and arguments over which particular policy situation is the best one," says Kate Gordon, Next Generation's vice president and director. "We wanted to take a classic business risk assessment approach."

The report contains maps, down to the county levels, predicting temperature increases and farm crop yield changes in the coming years.

"We took climate models from about 40 different sources and aggregated them," Gordon says. "Then we had economists working on the project that looked at the past impacts on the economy of certain types of climate scenarios. Then we projected those forward in specific areas. So it's a combination of science and economics. We had really really good industry modeling. For heat impacts, we brought those down to the county level because you can tell across the state, there'll be very different climate impacts."

Gordon says it's important to take this closeup look at the climate future because it's how businesses make decisions.

"From a business perspective or an urban planning perspective, people think very locally," she says. "So if I'm a business person, I'm thinking about where my headquarters is located and where my supply chain is located. and what potential impacts will affect those physical locations. If I'm a municipal palnner, I'm thinking about my city."

Pennsylvania, Gordon says, has a significant number of workers—30 percent—in outdoor occupations like mining, construction and delivery. Hotter temperatures and related outcomes could hit this sector particularly hard.

"When you have a series of extremely hot days, those are the occasions when people either can't go out during the day, can't do construction or other active occupations during those parts of the day or could be at a pretty high risk of health impacts if they did," Gordon says. "We modeled that by the end of the century, which seems like a long time away but it is in the lifetime of people being born now...your state will see days over 95 degrees Fahrenheit in a range that's about two months more than you have now. ... So that means that workers that are stuck outside—or people that live outside-there's a big issue for homeless people, too—will be at risk of either not being able to do their jobs for big parts of the day or being at health risk if they do."

There are also implications for energy demand.

"Far more people will be using air conditioning, which means there is a much higher demand for energy," Gordon says. "At the same time, high heat leads to your current energy systems being less effective. Power plants get much hotter on hot days, obviously, and have to be cooled down. So their capacity goes down. Transmission lines also are less effective when it's really hot out. ... All of that's going to lead to higher energy prices as well as the need to build out more electricity."

That means Pennsylvanians can expect a 6 percent increase in energy costs in the next couple decades, the report predicts.

Next Generation's work got some high-level cred from Hank Paulson, former U.S. Treasury Secretary under President George W. Bush and former CEO of Goldman-Sachs. He helped steer the research on the risk committee.

Now Paulson and others on the committee are in a bipartisan effort engaging with CEOs and business schools to talk about what was learned and find out more about what it means for business communities.