New research published in Proceedings of the National Academy of Sciences estimates that climate change has already lowered US income by about 12 percent. The study is led by Derek Lemoine, a professor of economics at the University of Arizona and codirector of the university’s Consortium of Environmentally Resilient Business. Lemoine argues that measuring current economic effects is essential for policymaking and business investment because it makes projecting future impacts more reliable.
Earlier work that focused mainly on local, short-term weather changes found losses below 1 percent. Lemoine’s team added three elements to the analysis: the persistence of warming from year to year, the nationwide reach of temperature shifts, and economic links between regions. Together these effects raise the estimated income loss to about 12 percent. The study emphasizes that a large share of the cost comes from how simultaneous temperature shifts across the country change prices and trade, so impacts can appear far from the places that warmed most.
Methodologically, researchers used climate models that simulate a world with human emissions and a counterfactual world without them. They compared those worlds to estimate how county weather would differ without climate change, then merged county-level daily temperature records with county personal income per capita data from the Bureau of Economic Analysis covering 1969–2019. The analysis focuses on routine changes—more hot days and fewer cold days—rather than damages from extreme events such as hurricanes, wildfires or floods.
The findings imply that treating climate change as an ongoing economic force could change business and policy choices. Lemoine says the approach can inform resilience planning, insurance and location decisions and help target adaptation funding where it is most needed. The Arizona Institute for Resilience provided early-stage funding, and the team hopes the framework can be expanded and calculated regularly so changes can be tracked over time.
Difficult words
- estimate — calculate an approximate amount or valueestimates
- persistence — continuation of something over a period
- nationwide — affecting or existing across the whole country
- counterfactual — describing what would happen without a specific cause
- per capita — for each person divided by the population
- simulate — create a model to show how something behaves
- resilience — ability to recover from difficult events
Tip: hover, focus or tap highlighted words in the article to see quick definitions while you read or listen.
Discussion questions
- How might businesses change location or investment decisions if climate change is treated as an ongoing economic force?
- Why do simultaneous temperature shifts across a country affect prices and trade, and how could that harm regions that did not warm most?
- What are the benefits of calculating and updating this framework regularly for policy and adaptation funding?
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