The Importance of Measuring the Fiscal and Economic Costs of Climate Change
- Media Manager
- Mar 13, 2023
- 1 min read
The White House
Written By: Candace Vahlsing, Associate Director for Climate, Energy, Environment, and Science, Office of Management and Budget & Zach Liscow, Chief Economist, Office of Management and Budget
Published: March 14th, 2023
Climate change impacts our economy, health, well-being, security, and quality of life. According to the National Oceanic and Atmospheric Administration (NOAA), the cost of climate and weather disasters in the United States last year totaled more than $165 billion—the third most costly year on record. And this cost fails to capture the devastation from lives lost, the toll on our healthcare, and the impacts on American families and communities upended and displaced by increasing climate crises. As temperatures continue to increase—causing more severe heat waves, coastal flooding worsened by sea-level rise, and other natural disasters—the costs of climate risk will likely continue to rise in the coming years.
In recognition of these risks, President Biden’s Executive Order on Climate-Related Financial Risk directed the Council of Economic Advisers (CEA) and the Office of Management and Budget (OMB), along with experts across the U.S. Government, to develop methodologies to integrate climate risks into the President’s Budget. Climate risks could affect the Budget and the overall fiscal outlook through a number of pathways, including altering total tax revenue through effects on Gross Domestic Product (GDP) growth, and changing Federal spending to respond to climate impacts, both to ameliorate climate damages and spur the transition to clean energy.
