In April of 2025, Comptroller Brooke Lierman released a report on her State Spending Series: Climate Change Costs.

STATE SPENDING SERIES: CLIMATE CHANGE COSTS APRIL 2025 As Maryland’s Chief Fiscal Officer and a member of the state spending board – the Board of Public Works – the Comptroller of Maryland is supportive of cost-effective investments that grow the economy and advance economic opportunity for all Marylanders. This report is part of a series that explains state expenses and shares lessons learned from across the United States and the world about cost drivers of critical infrastructure and other public goods that are essential to inclusive and resilient growth.

The following blog on the cost of inaction was posted in September 2024 by Maryland LCV’s Climate Policy and Justice Fellow:

Introduction

When you think about climate change, the first images that come to mind might be extreme weather events like heat waves, flooding, and wildfires. You might remember how difficult it was to breathe when smoke from Canadian wildfires made it down to Maryland in 2023, the recent devastating flooding in Ellicott City, or you might be worried about the spread of vector-borne diseases as increasing heat expands habitat and breeding seasons for ticks and mosquitoes (In 2023, Maryland reported the first case of locally-acquired malaria in 40 years). Global warming is driving more frequent events, and the costs are escalating. The National Centers for Environmental Information (NCEI) reports on how many climate disasters and weather events cost at least $1 billion each. As of September 10, 2024, there have already been 5 disasters costing the state more than $1 billion each in 2024 alone.

To calculate these costs, NCEI includes: 

  • Physical damage to residential, commercial, and municipal buildings;
  • Material assets (content) within buildings;
  • Time element losses such as business interruption or loss of living quarters;
  • Damage to vehicles and boats;
  • Public assets including roads, bridges, levees;
  • Electrical infrastructure and offshore energy platforms;
  • Agricultural assets including crops, livestock, and commercial timber; and
  • Wildfire suppression costs.

This list is not exhaustive, however, because it neglects other costs borne by the impacts of severe weather and disastrous climate events such as healthcare costs, disruptions to healthcare delivery, and the displacement of residents. Therefore, the billion-dollar mark for each of these events is likely an underestimate of the true costs of climate change to the state of Maryland and those of us living here. 

Maryland’s Climate Pollution Reduction Plan, released in December 2023, called for a $1 billion annual investment in climate solutions in order to meet state climate goals, but it stopped short of committing to a permanent funding mechanism. These investments would support programs that help reduce statewide emissions and improve local air quality, resulting in an estimated $142 million to $321 million in public health benefits in 2031 compared to current policies.

Unfortunately, when we talk about climate solutions, we are often asked how much it will cost to implement new policies. What’s often missing is a discussion on the billions of dollars per year the state already spends on climate-related damage and the savings that households would benefit from in the long run. The longer it takes to implement solutions, the costlier the damage.

Social Cost of Carbon

As we explore the broader costs of inaction, it’s important to look at a key calculation that quantifies these impacts: the social cost of carbon (SCC), which quantifies the economic damages caused by an additional ton of carbon dioxide (CO2). This calculation takes a sectoral approach, accounting for changes in net agricultural productivity, human health, property damages from increased flood risk, and energy system costs. These future damages are discounted to reflect their present value. In essence, the SCC represents the present-day cost of future climate-related damages from each  additional ton of carbon emissions. 

The U.S. Environmental Protection Agency (EPA) recently released a report detailing the social cost of greenhouse gas emissions, which also factors in methane (CH4) and nitrous oxide (NO) in addition to CO2. The social cost of NO is significantly higher than CO2 because NO is a much more potent greenhouse gas, meaning each molecule of NO traps significantly more heat in the atmosphere than a molecule of CO2, and it has a longer atmospheric lifetime leading to a greater long-term impact on climate change when emitted; therefore, the cost associated with releasing a unit of NO is considerably higher than the cost of releasing a unit of CO2, or CH4 for that matter. 

 

Using the 2020 federal social cost of greenhouse gas, Maryland’s consumption contributed over $78 billion to global climate damages just in the 5 reporting years between 2006 and 2020.

If Maryland fails to take additional climate policy action, this figure will grow by at least $159 billion by 2045 during key greenhouse gas emissions target years alone.

If Maryland succeeds in reaching its 2045 net zero emissions goal, we could save nearly $48 billion of those global climate costs, and at least an additional 150 million metric tons of carbon dioxide equivalent emissions will be abated. 

The Cost of Inaction

The additional $48 billion we’ll contribute to climate damages may seem like an abstract figure. This number captures the changing climate’s innumerable and tangible effects on agriculture, labor productivity, fisheries, mortality, and several other sectors. A look at U.S. county-level climate costs puts the cost of inaction into perspective.

Under a business-as-usual scenario, by the end of the century, Maryland counties will see average annual mortality damages of up to 16 additional deaths per 100,000 residents (Talbot and Dorchester Counties). Statewide, inaction will cost us an additional average change in deaths of ~6.5 per 100,000 Maryland residents.

Another notably high cost of inaction is in the agricultural sector. Without appropriate climate action and investment, Allegany County is projected to experience a 61% decrease in agricultural yield for 4 major crops by the end of the century.  

Inequitable and Non-Economic Damages

Similar to the NCEI calculation, though, the costs included in the SCC calculation provides a thorough picture of the cost of climate, but neglects certain climate impacts. For example, the inequitable distribution of damages, such as conditions stemming from living, working, or attending school in closer proximity to an emissions source, are not included in the calculation.

Other impacts accounted for in these estimates – like damages to Maryland’s agricultural sector, property, fisheries, and aquatic systems – not only have economic impacts, but also have deeply-rooted historic, personal, and cultural significance that is difficult to quantify and are rarely, if ever, included in these costs.

While the consequences of inaction are far greater than the cost of investment, the decision to protect people and the environment and avert a climate crisis is worthwhile even if the monetary costs of climate change did not outweigh the investment. This is especially true when the focus is on an immediate return of monetary investment above all other metrics – some of which cannot truly be quantified (i.e. health, mortality, wellbeing, natural resources) – is core to what has caused and exacerbated global warming.

Conclusion

Costs of climate change in excess of those caused by previous and current emissions can be adequately averted by implementing the many policies and solutions outlined in Maryland’s Climate Pollution Reduction Plan and the State Climate Action Plan.

Committing at least $1 billion annually to equitable emissions reduction and climate adaptation today is an investment in averting the symptoms, or climate costs, rather than waiting as climate costs compound. This is like investing in preventive care, rather than treating the symptoms of a disease. Waiting to implement solutions only makes damages more costly and solutions more resource-intensive, just as treating an injury or illness is often more costly than prevention. Maryland has access to the resources and information needed to take the preventative approach. The state should leverage once-in-a-lifetime federal funding opportunities and create new sources of state revenue to develop equitable and effective pathways for Maryland to address the ongoing climate crisis.

Sources:

  • https://health.maryland.gov/newsroom/Pages/Maryland-Department-of-Health-announces-positive-case-of-locally-acquired-malaria.aspx
  • https://www.ipcc.ch/report/ar6/wg1/chapter/chapter-11/
  • https://www.ncei.noaa.gov/access/billions/state-summary/MD
  • https://mde.maryland.gov/programs/air/ClimateChange/Maryland%20Climate%20Reduction%20Plan/Maryland%27s%20Climate%20Pollution%20Reduction%20Plan%20-%20Final%20-%20Dec%2028%202023.pdf
  • https://www.energypolicy.columbia.edu/publications/discounting-the-distant-future-a-critique-of-the-epas-analysis-of-the-social-cost-of-carbon/
  •  https://19january2017snapshot.epa.gov/climatechange/social-cost-carbon_.html; https://www.resources.org/archives/improving-discounting-in-the-social-cost-of-carbon
  • https://www.rff.org/publications/explainers/social-cost-carbon-101/
  • https://www.epa.gov/ghgemissions/understanding-global-warming-potentials
  • https://www.science.org/doi/10.1126/science.aal4369
  • https://www.c2es.org/wp-content/uploads/2015/11/summary-american-climate-prospectus-impacts-maryland.pdf
  • https://www.science.org/doi/10.1126/science.aal4369