Global warming carrying big costs for California

SACRAMENTO, CALIFORNIA - From agricultural losses to devastation wrought by wildfires, California's economy is expected to see significant costs resulting from global warming in the decades ahead, according to a report.

Global warming could translate into annual costs and revenue losses throughout the economy of between $2.5 billion and $15 billion by 2050, according to a summary of cost analyses presented to Gov. Arnold Schwarzenegger's climate advisers.

Property damage caused by sea level rise and more devastating wildfires could push the costs far higher.

The projected financial toll comes from a compilation of 40 studies commissioned by the governor's Climate Action Team. The final reports, which will be released at the end of March, are intended to provide a comprehensive snapshot of global warming's potential costs to property owners, businesses and state government.

"The numbers indicate that we have a lot at stake," said Michael Hanemann, a professor in the Department of Agricultural and Resource Economics at the University of California, Berkeley. "Californians need to pay serious attention to control our greenhouse gas emissions, and they need to start thinking about adaptation."

The studies were written by scientists from various disciplines based at California universities and research institutions. They include a range of costs from agriculture, wildfires, water supply, flooding and electricity demand.

If nothing is done globally to reduce emissions, hotter temperatures will lead to rising sea levels that will flood property in the San Francisco Bay area, lead to lower crop yields and water shortages, produce more intense wildfires and cause more demand for electricity to cool homes.

Hanemann, who reviewed the studies, said the annual cost estimate of $2.5 billion to $15 billion is conservative.

For example, lower crop yields are likely to occur during extreme weather when temperatures soar higher than normal. However, the climate models that calculated the $3 billion in potential crop losses used average monthly weather data that is lower than temperatures on the hottest days.

"The monthly data understates the extreme temperature events — and that understates the damage," Hanemann said.

In addition, wildfire property damage estimates do not include money that might be spent by state and local governments to fight the fires.

Property damage alone could cost Californians between $200 million and $42 billion a year, with the larger figure based on a worse-case scenario, Hanemann said. The state spent about $1 billion fighting wildfires in 2008.

Economic estimates were not available for the small-business sector. The consequences for commercial and recreational fishing as marine ecosystems change or the ski industry if the snowpack gets smaller also have not been determined.

The annual costs also could be greater at the end of the century, ranging from $14 billion a year to $45 billion in 2085.

California's total annual economic output was estimated at $1.8 trillion in 2007, the most recent figure published by the federal government.

The reports come as California regulators are implementing a 2006 state law that requires greenhouse gas emissions to be cut to 1990 levels by 2020.

Even as that regulatory process plays out, emissions have continued to rise in the U.S. Heat-trapping emissions grew nationally by 1.4 percent from 2006 to 2007, according to a draft greenhouse gas inventory released earlier this month by the Environmental Protection Agency.

If emissions are reduced on a global scale, economists say the financial effect on California would be lessened but not eliminated. For example, annual revenue losses for California farmers would be cut in half to about $1.5 billion by 2050, while overall electricity costs actually might be less than today.

Linda Adams, secretary of the California Environmental Protection Agency, said the research shows why the state needs to cut carbon emissions aggressively over the next 40 years.

"It will cost significantly less to combat climate change than it will to maintain a business-as-usual approach," Adams said.

Schwarzenegger created the 16-member Climate Action Team in 2005 to inform state agencies about how to prepare for climate change.