Report: Climate change a huge economic risk

Climate change poses profound risks to the U.S. economy and needs to be addressed immediately, says a bipartisan report Tuesday by a coalition of financial leaders that includes three former Treasury secretaries.

Two of the most severe impacts — sea level rise and extreme heat — will likely cost billions of dollars in annual property loss, threaten human health. lower labor productivity and endanger the nation's electricity grids, says the report by the Risky Business Project.

"The risks are more perverse and cruel than we saw with the financial crisis, because they accumulate over time," Henry Paulson Jr., the Treasury secretary for President George W. Bush, told reporters Tuesday, noting heat-trapping carbon dioxide emissions linger in the atmosphere a long time.

"The good news: If we act immediately we can avert the worst outcomes," Paulson said, adding U.S. businesses need to unite and lead the push for national change. "We need to take out an insurance policy. It's that simple."

"We cannot afford to waste another minute," said Michael Bloomberg, GOP mayor of New York City from 2002 through 2013. He said rising sea levels will make storms like Sandy, which devastated his city and parts of New Jersey in 2012, worse. "We have to plan for risks," he said. "Climate is one of them."'

Paulson and Bloomberg, along with billionaire former hedge fund executive and Democrat Thomas Steyer, led the project that produced the report, compiled by climate scientists and the economic research firm Rhodium Group. Their committee also includes George Shultz, Treasury secretary for President Richard Nixon, and Robert Rubin, Treasury secretary for President Bill Clinton.

While the report does not advocate specific policies, the three former Treasury secretaries all back a carbon tax that would put a price on greenhouse gas emissions. Their report comes as the U.S. Environmental Protection Agency, earlier this month, proposed a 30% cut in carbon dioxide emissions from power plants by 2030.

Its findings, which largely echo those of the federal government's Third National Climate Assessment that was released in May, forecasts huge economic losses:

• Sea level rise and increased damage from storm surge are likely to lead to an extra $2 billion to $3.5 billion in property losses each year by 2030 in the Gulf Coast, Northeast and Southeast, with escalating costs in future decades. By 2050, between $66 billion and $106 billion worth of existing coastal property will likely be below sea level nationwide, growing to, $238 billion to $507 billion by 2100.

• Extreme heat — especially in the Southwest, Southeast, and Upper Midwest — will likely add 27 to 50 extra days each year when temperatures hit at least 95 degrees Fahrenheit by mid-century. By 2100, this number will likely reach 45 to 100 additional days. It will make being outside so difficult that labor productivity could drop while demand for air conditioning will require the construction of more power plants that will hike electricity costs.

• Global warming could benefit Northern farmers in the upper Great Plains by extending the growing season but their gains will be offset by losses in the Midwest and South. Without major adaptation, national crop production (corn, soy, wheat and cotton) could decline by 4% by mid-century and up to 42% by late century.

"Every city, every company can do something to make a difference," Bloomberg said, noting New York City cut its greenhouse gas emissions 19% in the last five years and his company is building a massive data center in upstate New York to mitigate flooding risks.

Like Bloomberg, more than 700 leading U.S. companies including General Motors, Nike and Intel have publicly endorsed support for strong U.S. climate policies, according to Mindy Lubber, president of Ceres, a Boston-based group that promotes corporate sustainability. She says more than 170 of them have signed a letter supporting the EPA's recent proposal to limit power plant emissions, which the coal industry and the Chamber of Commerce have opposed.

Kate Gordon, who runs the Risky Business project, said all businesses — not just the Fortune 500 ones — need to integrate climate risks into their everyday decision-making.