Nonetheless, according to several experts we  interviewed, the methods can convey useful insight into broad themes  about potential climate damages across sectors in the United States. National-Scale Studies and Experts Suggested That Potential Economic Effects of Climate Change in the United States Could Be Significant and Unevenly Distributed

The two national-scale studies—the American Climate Prospectus and  the Climate Change Impacts and Risk Analysis—and many of the experts  we interviewed suggested that although the methods are developing and  produce imprecise results, the potential economic effects of climate  change could be significant in many sectors across the U.S. economy  and unevenly distributed across U.S. sectors and regions. For example, the  study estimated that coastal property losses from sea level rise and  increases in the frequency and intensity of storms could range from $4  billion to $6 billion per year in the near term (i.e., 2020 through 2039),  increasing to a range of $51 billion to $74 billion per year by late century. Figure 2 shows examples of  potential economic effects in different U.S. geographic areas. According to Leading Practices and Experts, Information on the Potential Economic Effects of Climate Change Could Help Decision Makers Better Manage Climate Risks

Information on the potential economic effects of climate change could  help federal decision makers better manage climate risks, according to  leading practices for climate risk management and economic analysis we  reviewed and the views of several experts we interviewed. The federal government has  not undertaken strategic, government-wide planning to manage climate  risks, using the best available information, including information on the  potential economic effects of climate change, to identify and assess  significant risks. By using information  on the potential economic effects of climate change to assess and identify  significant climate risks and craft appropriate federal responses, the  federal government could take an initial step in establishing government- wide priorities to manage significant climate risks, which we  recommended in May 2011 to reduce federal fiscal exposure and  continue to believe is important. Conclusions

Climate change impacts are already costing the federal government  money, and these costs will likely increase over time as the climate  continues to change. Under the National Academies’ 2010 leading  practices, climate change risk management efforts need to be focused on  where immediate attention is needed, and by prioritizing federal climate  risk management activities well, the federal government can help to  minimize negative impacts and maximize opportunities associated with  climate change. Recommendation for Executive Action

We are making the following recommendation to the Executive Office of  the President:  The appropriate entities within the Executive Office of the President,  including the Council on Environmental Quality, Office and Management  and Budget, and Office of Science and Technology Policy, should use  information on the potential economic effects of climate change to help  identify significant climate risks facing the federal government and craft  appropriate federal responses. Appendix I: Objectives, Scope, and Methodology

In this report, we examine (1) what is known about methods used to  estimate the potential economic effects of climate change in the United  States; (2) what is known about the potential economic effects of climate  change in the United States; and (3) to what extent have leading  practices and experts found that information about the potential economic  effects of climate change could inform efforts to manage climate risks  across the federal government.
Why GAO Did This Study

Over the last decade, extreme weather and fire events have cost the federal government over $350 billion, according to the Office of Management and Budget. These costs will likely rise as the climate changes, according to the U.S. Global Change Research Program. In February 2013, GAO included Limiting the Federal Government's Fiscal Exposure by Better Managing Climate Change Risks on its High-Risk List.
GAO was asked to review the potential economic effects of climate change and risks to the federal government. This report examines (1) methods used to estimate the potential economic effects of climate change in the United States, (2) what is known about these effects, and (3) the extent to which information about these effects could inform efforts to manage climate risks across the federal government. GAO reviewed 2 national-scale studies available and 28 other studies; interviewed 26 experts knowledgeable about the strengths and limitations of the studies; compared federal efforts to manage climate risks with leading practices for risk management and economic analysis; and obtained expert views.

What GAO Found

Methods used to estimate the potential economic effects of climate change in the United States—using linked climate science and economics models—are based on developing research. The methods and the studies that use them produce imprecise results because of modeling and other limitations but can convey insight into potential climate damages across sectors in the United States.
The two available national-scale studies that examine the economic effects of climate change across U.S. sectors suggested that potential economic effects could be significant and unevenly distributed across sectors and regions. For example, for 2020 through 2039, one study estimated between $4 billion and $6 billion in annual coastal property damages from sea level rise and more frequent and intense storms. Also, under this study, the Southeast likely faces greater effects than other regions because of coastal property damages (see figure).
Information about the potential economic effects of climate change could inform decision makers about significant potential damages in different U.S. sectors or regions. According to several experts and prior GAO work, this information could help federal decision makers identify significant climate risks as an initial step toward managing such risks. This is consistent with, for example, National Academies leading practices, which call for climate change risk management efforts that focus on where immediate attention is needed. The federal government has not undertaken strategic government-wide planning to manage climate risks by using information on the potential economic effects of climate change to identify significant risks and craft appropriate federal responses. By using such information, the federal government could take an initial step in establishing government-wide priorities to manage such risks.

What GAO Recommends

GAO recommends that the appropriate entities within the Executive Office of the President (EOP), including the Office of Science and Technology Policy, use information on potential economic effects to help identify significant climate risks and craft appropriate federal responses. EOP entities and the Environmental Protection Agency did not provide official comments on the report.