New study comes out on effects of climate change on economy

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FAIRBANKS, Alaska - A new study has come out on the effects of climate change on the economy. According to a research paper published but the University of Alaska Anchorage, university economists believe the impacts of climate change could cost the state of Alaska hundreds of millions of dollars per year.

The review, called the Economic Effects of Climate Change in Alaska, focuses on the effects that have occurred and those likely to transpire over the next 30 to 50 years. One of the contributing authors is UAA’s professor of Economics Matthew Berman.

"So the study was actually, it was a review of what's known and what's not known, but we'd like to know about the economic effect on climate change in Alaska," said Berman.

The review covers what climate change is doing and the various problems that it's causing.

"Here in places like Anchorage and Fairbanks it’s not so cold anymore in the winters," he said.

In his research Berman noted that annual average temperatures across the state have risen by 1.5 degrees celsius since the 1950's. He says a lot of people are aware of the effects of climate change.

"But very little it is actually turned into economic effects, so we're trying to look at what's known about the economic effects specifically," he said.

The largest economic effects were associated with costs to prevent damage, relocate and replace infrastructure threatened by permafrost thaw, sea level rise and coastal erosion. The effects are estimated to cost the state an annual net cost of $340 to $700 million per year. The article shows the economic effect on Alaska as a whole, as rural communities face large projected costs, while more southerly urban residents are likely to experience net gains.

"You know there is wide ranging effects and most of the potential problematic effects are in rural Alaska," he said.

According to the report, in rural Alaska the warmer temperatures could alter the cost of energy prices, which are known to be extremely high. By correlating current average statewide energy cost and consumption data with long–term climate forecasts, Berman concluded Alaskans could save $100 million to $150 million per year on space heating costs over the next 30 to 50 years.

"Everybody is paying less for heating homes when it's zero instead of minus twenty," Berman said regarding warmer temperatures.

A calculation of the amount of energy needed to heat a space in a given climate over a year has already decreased by 8.4 percent in Anchorage, 5.6 percent in Fairbanks and 7.5 percent in Utqiagvik over the past 50 years. Berman says there is still a lot of work to be done but this is a start on research that wasn't available before.