Economic Impacts

economic treasureS TO protect

Not preparing for coastal climate change will mean real losses to local economies.

What are the Impacts to our Region?

In a comprehensive statewide review, Florida’s coastal and ocean economies were estimated to generate approximately $500 billion annually in 2005 and 2006 (Kildow, 2008). Along the Space Coast and neighboring east Florida counties, the IRL and coastal ocean are a major component of this production, generating abundant goods and services that create and support many business sectors and diverse recreational opportunities for those lucky enough to live in or visit coastal east Florida.

The 2016 Indian River Lagoon Economic Valuation Update estimated the total annual economic output at approximately $7.6 billion in 2014 (ECFRPC and TCRPC, 2016). This did not include an estimated $934 million in annualized real estate value for properties located on or near the IRL, nor the economic contributions from north of the Ponce de Leon Inlet. When these contributions are also considered, the total economic output can be valued at about $9.9 billion annually (IRL CCMP, 2019).

Unabated climate change and its impacts on IRL resources (see environmental impacts webpage) invites major long-term economic losses to IRL and coastal ocean businesses, including tourism. According to Morgan Stanley, climate disasters cost North America $415 billion in the prior three years with substantial spillover impacts on supply chains (Shelly, 2019). With continued growth in emissions, annual U.S. economic losses are projected to reach hundreds of billions of dollars by late century, exceeding the current GDPs of most U.S. states, with losses often concentrated in coastal areas following the Fourth National Climate Assessment at USGCRP (2018). Market risks are highly elevated as well (U.S. Commodity Futures Trading Commission, 2020). The sections below provide introductions to the literature but are not comprehensive.

Source: K. Lindeman

Source: Florida Today

Fishing

Florida supports iconic marine and freshwater fisheries, and aquaculture, with a collective value of approximately $15 billion to the state (Lorenzen et al., 2017). Marine recreational and commercial fisheries have an estimated economic impact of over $13 billion annually. More than $12 billion comes from recreational fishing, producing 70,000 jobs and attracting 6.5 million participants annually (NMFS, 2016; Lorenzen et al., 2017; Southwick Associates, 2018) .

The value of the IRL commercial clam, oyster, crab, and shrimp harvest for 2015 was $4.3 million – a decline of nearly 80 percent compared to 1994 (ECFRPC and TCRPC, 2016). Pounds of shellfish harvested also declined during that period, 7.1 million to 2 million pounds, or almost 72 percent. Volusia, Brevard and Martin counties showed the largest declines. The IRL commercial fin fishery declined from $23.5 million in 1990 (inflation-adjusted) to $14.8 million in 2015, a 37 percent decline (ECFRPC and TCRPC, 2016). Brevard, Indian River, and Martin counties showed the sharpest declines in value and pounds harvested.

The East Florida water culture is of high economic value along the IRL and coastal ocean with estimated contributions of $225 million and $53 million annually from fishing and surfing in Brevard County alone (Kelly, 2008). More frequent severe storms, sea level rise, coastal habitat loss associated with both factors, changes in nutrient dynamics, and ocean acidification are inter-linked factors that can impact the productivity of Florida’s marine fisheries (Lorenzen et al., 2017).

Public Health

In the southeast U.S. and Florida, comprehensive reviews of the science note that increasing warmth and precipitation can add to the risk of waterborne and foodborne diseases, and aid the proliferation of insects that spread diseases like Zika, West Nile, and dengue fever (Liang et al., 2017; Carter et al., 2018). Field and modeling studies elsewhere and in the southeast U.S. have shown that increasing exposure to extreme heat can be a driver of higher mortality rates. Regional climate change, as well as changes in microclimate, can affect human health through changing patterns of disease, extreme weather, human conflict, and socioeconomics (e.g., lower-income people are often more at risk) (e.g., Carter et al., 2018).

Many studies conclude that public health in Florida is vulnerable to climate-associated impacts (e.g. heat waves, storm surge, hurricanes, and sea level rise), with a range of social and economic effects (e.g., Liang et al., 2017). These health effects effects include temperature-related illnesses, injuries, and deaths, and injuries and deaths from storm events. There are also many typically sub-lethal impacts, e.g., increased allergic reactions (Reinmuth-Selze et al., 2017). Harmful algal blooms (HABs) caused by cyanobacteria can impact public health along the IRL (e.g., Schaefer, 2020). The above and other climate health challenges can have substantial socio-economic impacts that are often not fully accounted for (e.g., Liang et al., 2017). Because the average age in Florida is higher than in most other states, our population is particularly vulnerable to these risks (Raimi et al., 2020).

Research that quantifies the results of a California cap-and-invest program in place since 2012 suggests that positive public health impacts can result from coordinated carbon pollution pricing. This policy created benefits that amount to five times the cost of the program (Breslow and Wincele, 2020).

Aedes aegypti can spread dengue, Zika, and other diseases. Source: USDA

Source: NASA

Military and Space

The Pentagon, individual military services, and security-focused corporations have produced a variety of reports on the challenges of climate change: in-theater and at home (e.g., American Security Project, 2019). For example, a major review advised and signed by 16 generals and admirals (CNA, 2014), states that “… projected impacts of climate change will be more than threat multipliers; they will serve as catalysts for instability and conflict.” Among many security-focused conclusions, the report also noted that projected climate change impacts inside the borders of the U.S. can effect our homeland security.

A report by the Center for Climate and Security (2016) notes that major military transportation, command and control, intelligence, and deployment hubs may face erratic outages, or curtailment of operations, due to more extreme weather and sea level rise. The ability of the DOD to fulfill mission requirements will be more costly, take more time, and be hindered by a lack of planned-for assets at critical junctures. These are force-multipliers for our enemies that should not be ignored (CNA, 2014; Center for Climate and Security, 2016).

A new report submitted to Congress in 2019, lists vulnerabilities at 79 key U.S. military facilities and says nearly all are facing problems from increasingly severe weather, such as flooding and drought (DOD, 2019). Multiple Air Force and Navy bases in Florida are within this analysis including Cape Canaveral Air Force Station on the IRL. This facility and NASA’s Kennedy Space Center are subject to a variety of increasing flood risks (e.g., Climate Central, 2019).

Business

Many coastal businesses throughout the southeast U.S. are operating in hotter air and water environments with more extreme weather, increased stormwater, and continued increases in the rate of sea level rise (Carter et al. 2018), including the IRL, its tributaries, and barrier islands. The East Central Florida Regional Planning Council recently conducted extensive planning discussions with staff from multiple government and other experts in support of a resilience planning process that is now being implemented around the region (ECFRPC, 2018).

The ECFRPC’s sea level rise sub-committee recommends that planners prepare for a rise of from 5.15 to 8.48 ft by 2100 (ECFRPC, 2018, pp. 24-26) based on recent reviews by the U.S. Army Corps of Engineers and NOAA. The complex implications of increasing sea level rise for businesses, including tourism and real estate, are the subject of a growing policy literature on climate adaptation in Florida that dates back to at least the 1980s (e.g., Harrington et al., 2017; Lindeman et al., 2018; CCAL, 2020).

Potential increases in frequency and intensity of tropical storms will also increase the risks of property damage (Carter et al., 2018; Martinich and Crimmens, 2019). More severe storms not only pose more risks to human lives, they also reduce regional economic output over short- and long-term scales (e.g., Raimi et al., 2020). Under continued high carbon emissions scenarios, climate change effects are estimated to range in the hundreds of billions of dollars annually by the end of the century (e.g., National Climate Assessment, 2018; Martinich and Crimmins, 2019). Lowered emissions of carbon and adaptation actions in relevant business sectors, if done soon enough, should result in substantial economic benefits in the longer term.

Source: NASA

Source: Florida Dept. of Economic Opportunity

Economic Opportunity

The good news is that climate change also presents business opportunities – if we use the science and think thoroughly about our future. Importantly, renewable energy business sectors and those with associated sustainability initiatives are among the fastest growing segments of the U.S. economy (Energy Information Administration, 2019; Bureau of Labor Statistics, 2020).

The Carbon Disclosure Project is working with 225 of the world’s 500 largest companies, who report that climate change responses could generate over $2 trillion in new business prospects and new clean-energy jobs (e.g., Bureau of Labor Statistics, 2020). This includes major growth in green buildings, renewable energy, electric vehicle sales, public transit, and construction of energy-efficient public infrastructure as old infrastructure is replaced (e.g., Cho, 2019).

Nobel Prize-winning economist Dr. Joseph Stiglitz wrote a telling opinion piece, including this,

“We will pay for climate breakdown one way or another, so it makes sense to spend the money now to reduce emissions, rather than wait until later to pay a lot more for the consequences… It’s a cliché, but it’s true: an ounce of prevention is worth a pound of cure.”

Clean energy and sustainability initiatives are becoming commonplace in U.S. and global industries (e.g., Accenture Global CEO Survey, 2010; Costanza et al., 2016; McMahon, 2019). Scaling-up these initiatives is one of the best investments we can give ourselves and future generations.