A small but elite group of former financial executives have issued a stern warning on the economic costs of climate change in an effort to get the business community and others to take action.
"These risks include the potential for significant federal budget liabilities, since many businesses and property owners turn to the federal government as the insurer of last resort. But if we act immediately, we can still avoid most of the worst impacts of climate change and significantly reduce the odds of catastrophic outcomes—but the investments we're making today will determine our economic future."
"Risky Business" was created by Paulson—also the former head of Goldman Sachs—former New York City mayor Michael Bloomberg and Tom Steyer, the recently retired founder of hedge fund firm Farallon Capital Management. The project was also advised by other Wall Street heavyweights that included former Treasury secretary and banker Bob Rubin; former Secretary of State and Treasury George Shultz; and Gregory Page, executive chairman of Cargill.
The new study assesses the impact of climate change by U.S. county, state and region. According to the report, extreme heat and rising sea levels—two of the primary impacts of climate change—could have a profound economic cost.
For example, between $66 billion and $106 billion worth of existing coastal property will likely be below sea level by 2050 if climate change continues unabated, the study said. Another is that national commodity crop production, such as corn, soy, wheat and cotton, could decline 14 percent by mid-century and up to 42 percent by late century.
"Climate change is nature's way of charging us compound interest for doing the wrong thing," Steyer said in a statement. "The 'Risky Business' report confirms what many of us have long suspected: The longer we wait to address the growing risks of climate change, the more it will cost us all. From a business perspective, given the many benefits of early action, it would be silly to allow these risks to accumulate to the point where we can no longer manage them."
Rubin, a former Goldman Sachs and Citigroup executive, emphasized the imperative to invest now.
"The federal government could ultimately bear enormous fiscal costs from climate change—when natural disasters strike, or when agricultural or health crises occur, the government provides large-scale emergency aid that is not presently accounted for in budget forecasts," Rubin said. "Moreover, ongoing adaptive measures, such as the hardening and relocating of critical infrastructure, will be increasingly needed to cope with the effects of climate change. In addition, in my view, companies should disclose both their potential exposure to climate risk, and the potential costs they may someday be required to absorb to address carbon emissions."
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—By CNBC's Lawrence Delevingne