A Deeper Look at the Health Costs of Climate Hazards

NRDC and partners released a report last month on the staggering financial toll of fossil fuel air pollution and climate change on human health in the United States. Following up on the launch, we are providing here some more information to clarify our findings and take a deeper dive into our report methods.

Specifically, some headlines and stories generated from the report’s initial release suggested or directly stated that climate change is tied to more than $820 billion in health care costs per year. prompted us to provide the following information, in which we highlight four points with a more detailed description of the cost estimates and clarification on the nature of the costs we report (these clarifications are also included in an updated version of the report itself).

1. Differentiating between the economics of reducing mortality risk vs. health care costs to treat illness

Overall, the vast majority of the health costs identified in our report come from a method that provides a valuation of reducing premature mortality risk, known as the “Value of a Statistical Life (VSL).” These mortality-related cost estimates are not the same as those related to traditional health care that are typically incurred to treat illnesses. The VSL estimates comprise the vast majority of the total damages identified in our report and provide an important way to represent premature loss of life in economic terms.

When we discuss the costs of premature mortality measured by this VSL, our cited publications applied an estimation method for the economic valuation of premature death, rather than an out-of-pocket cost or medical bill for health services. For example, one could say that the VSL indicates how much a large group of people would be willing to pay to avoid or reduce the risk of premature death from health harms caused by environmental conditions. There is more information online about how EPA explains the VSL method here. To emphasize this distinction again: the overwhelming majority of the costs estimated in our report are those associated with premature mortality, via the VSL method.

2. Who is paying for the health care costs we identified?

For the illness-related costs, the expected payer can sometimes be determined from the datasets used to assemble the cost estimates. The report does not intend to imply that all of the estimated costs are borne by vulnerable people, nor by the general public through Medicare and Medicaid premiums, to which taxpayers contribute. The VSL estimates associated with premature deaths are not out-of-pocket expenses being directly paid by individuals, and those costs comprise the vast majority of the total economic burden identified in the report.   

3. The difference between fossil fuel-generated air pollution and climate change-related costs

This report includes both the health costs of fossil fuel-related air pollution, and the health costs related to events sensitive to climate change, to varying degrees. Today, fossil fuel-related air pollution generates the majority of these costs, largely derived from the economic value of air pollution-related premature deaths. For example, the $820 billion per year figure highlighted in our report refers exclusively to the economic impact of premature deaths associated with fossil fuel-generated air pollution. Other cost estimates identified in our report (above and beyond the $820 billion) encompass both premature mortality and illness-related costs for specific types of climate-related events. We did not sum together the other cost estimates presented in each exposure category, because they are derived from different studies over different years that employed distinct methodologies.

But in the future, say, 30 years from now and assuming that cleaner, non-polluting energy sources are more prevalent, fossil fuel-related health harms would decline. However, climate change-related health costs are projected to rise to tens to hundreds of billions annually by the end of this century, greater than those same costs today. The good news is, if we move away from reliance on fossil fuels now, we can limit both types of costs—both today’s fossil fuel air pollution costs; and the future costs from a range of climate change-sensitive health hazards exacerbated by the impact of fossil fuel-related greenhouse gas emissions on climate change.

4. The difference between climate change-related and climate change-caused health impacts

The report might seem to suggest that people are directly paying out over $800 billion dollars from their pockets every year, for health costs caused by climate change. This interpretation, however, blurs the distinction between climate-attributable (caused) health outcomes and what the report identifies as "climate change-related" (elsewhere referred to as “climate-sensitive”) health outcomes. To help avert confusion, we’re providing this clarification.

The report combined findings from prior studies that were not causal climate change “attribution” analyses. Here we get into some further important details and distinctions. Climate attribution studies apply statistical modeling techniques in order to quantitatively examine the link between climate change’s influence on a particular event and associated health harms. Rather, this report compiled information from prior studies on a range of climate-sensitive health problems—those expected to worsen in frequency, intensity, duration, or areal extent in the future, due to climate change. For example, in the report, substantial costs are associated with vector-borne diseases whose climate change attribution is unknown, and likely limited at this time. To be clear, climate change is not currently responsible for 100% of the costs that were tallied in the report. While research in attributing climate change’s contribution to specific environmental events is advancing rapidly, that attribution is not the focus of the studies compiled in this report.

From Evidence to Action

Overall, our report findings indicate that fossil fuel-generated air pollution triggers a significant health and financial burden across the country right now, including a massive toll of premature death, and the available evidence indicates that the health costs of climate hazards will continue to mount in the future, unless we take decisive action to reduce climate pollution and improve community preparedness. As our understanding of the health harms of fossil fuels and climate change deepens even further, we can and should do a better job of identifying, tracking, and reducing health risks and costs from these interlinked dangers that are burdening our most vulnerable neighbors.

About the Authors

Vijay Limaye

Staff Scientist, Science Center
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