California, USA - More than half of California’s real estate assets are at risk from rising sea levels and wildfires caused by climate change, and the state could end up spending billions of dollars each year coping with its effects, a research report released Thursday found.

There is, however, a chance the price tag could shrink if the state takes steps now toward mitigation and adaptation in its policy and infrastructure decisions, according to "California Climate Risk and Response" from the University of California, Berkeley and nonprofit Next 10.

In what is billed as the first overview of the long-term economic threat to California from global warming, the report explored the potential toll on the state’s assets under three scenarios ranging from climate stabilization to high emissions. It also examined seven economic sectors and the issues they will likely face.

Roughly $2.5 trillion in real estate assets is at risk. The report calculated an annual cost to the state between $300 million and $3.9 billion in damages from the physical impacts of climate change. The ultimate cost depends on how warm the earth gets and how quickly we adapt.

The report ominously quotes Charles Darwin: "It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change."

Yet David Roland-Holst, the report’s lead author and UCB adjunct professor, cautioned that the research isn’t a "Doomsday" report.

"We have the resources to adapt," he said, pointing to recommendations offered in the report.

For instance, policy decisions made with climate change in mind could lead to a state better equipped to deal with its negative impacts, such as more efficient water allocation and agricultural practices, promotion of renewable energy, and the strategic investment in state infrastructure.

The state has already pledged to reduce emissions to 1990 levels by 2020 under the Global Warming Solutions Act of 1996, from which multiple initiatives have spawned, including binding climate change considerations to land use planning decisions and a low carbon fuel standard.

Doing nothing to address or prepare for climate change is the most expensive option, the report warned. Sectors will face significant adjustment challenges. There is also tremendous uncertainty.

"This uncertainty is costly, increasing the risk of both public and private mistakes and the deferral of necessary adaptation decisions," the report said. "The process of improving research and understanding of climate effects may itself be costly and difficult, but policymakers must have better visibility regarding climate risk and response options."

By ClimateBiz