New Study: Assessing Costs Americans are Willing to Pay to Adjust to Climate Change
What are Americans willing to pay to experience warmer winters or avoid hotter summers attributable to climate change? That is a significant component in considering the overall costs of climate change impacts. Yet few estimates for the United States exist on actual valuation of such “climate amenities.”
Now, a new study posted by Resources for the Future takes up the issue head on. In Household Location Decisions and the Value of Climate Amenities, Paramita Sinha of RTI International and RFF Senior Fellow Maureen Cropper use refined modelling efforts to look at the economic welfare effects of estimated changes in mean summer and winter temperatures over the period 2020 to 2050 for 284 US cities that contained over 80 percent of the US population in 2000.
The authors conclude that households are willing to pay to avoid cold winter temperatures and hot summer temperatures—but preferences and values vary significantly due to a number of factors, including residential location. On average, however, households are willing to pay 1 percent of income to avoid less severe climate scenarios and 2.4 percent of income to avoid the more severe.
Among the facts presented: Households in the Midwest region, on average, have lower marginal willingness to pay to increase winter and reduce summer temperatures than households in the Pacific and South Atlantic census divisions.
The authors conclude: “Our results suggest that the amenity value of climate could significantly increase estimates of climate damages, even for moderate temperature increases.”
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
Unless otherwise stated, the views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals.
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