A common criticism of climate damage accounting is that it focuses on the costs of fossil fuels without acknowledging the benefits they have provided to modern civilization. This criticism conflates two distinct concepts: the benefits of energy and the benefits of burning fossil fuels.
This paper does not argue that reliable energy, transportation, heating, cooling, hospitals, agriculture, or modern industry are undesirable. On the contrary, these systems have dramatically improved human welfare, life expectancy, productivity, and economic development. The relevant policy question, however, is not whether society benefits from energy, but whether combusting fossil fuels remains the lowest-cost means of providing that energy once all associated costs are properly accounted for.
The objective of this paper is therefore not to evaluate the value of modern civilization itself, but to quantify the economic damages associated with fossil fuel combustion that are routinely excluded from market prices. These damages include premature mortality, morbidity, infrastructure destruction, agricultural losses, insurance destabilization, ecosystem degradation, climate-driven displacement, productivity losses, and the transfer of costs to future generations.
From an economic perspective, these are externalized costs—costs imposed on society that are not fully reflected in the price of fossil fuels. When these damages are omitted, fossil fuels appear artificially inexpensive. The perception of “cheap energy” therefore depends, in part, on shifting substantial costs onto taxpayers, public health systems, ecosystems, and future generations rather than incorporating them into present-day market transactions.
Accordingly, the appropriate comparison is not between modern civilization and a world without energy. Rather, it is between alternative methods of supplying the energy services upon which modern civilization depends. As cleaner energy technologies become increasingly capable of providing electricity, heating, cooling, transportation, and industrial power, the relevant economic question becomes whether continued reliance on fossil fuel combustion remains socially optimal once its full costs are recognized.
Conservative Scope of the Analysis
The estimates presented in this paper are intentionally conservative. Throughout the analysis, costs were included only when there was sufficient evidence to support reasonably direct attribution to climate change. Where attribution remained uncertain, the associated damages were excluded from the calculations.
For example, climate change may influence the emergence, geographic distribution, and severity of zoonotic diseases and may have interacted with demographic, ecological, and environmental factors during the COVID-19 pandemic. However, because the degree of attribution remains uncertain, none of the health or economic costs associated with COVID-19 were included in the calculations presented in this paper.
This exclusion is substantial. More than 1.23 million deaths in the United States have been officially attributed to COVID-19. In addition, economists estimate that Long COVID imposes an annual economic burden ranging from several billion dollars to well over $200 billion, depending on assumptions regarding healthcare expenditures, workforce participation, disability, and lost productivity. Should future research establish a stronger causal connection between climate change and pandemic emergence, these costs would represent a significant addition to the climate burden estimated in this paper.
COVID-19 is only one example of a broader category of climate-sensitive health risks. A growing body of evidence demonstrates that climate change is altering the ecology of infectious disease transmission. Deforestation, habitat fragmentation, warming temperatures, and changing precipitation patterns increase contact between humans and wildlife while simultaneously expanding the geographic range of disease vectors and pathogens.
As temperatures rise, climate-sensitive vectors such as mosquitoes and ticks are expanding into regions where they previously could not survive year-round, increasing the risk of diseases including dengue fever, malaria, West Nile virus, Lyme disease, chikungunya, and Zika virus. Likewise, environmental disruption increases opportunities for zoonotic spillover events involving pathogens such as Ebola viruses, avian influenza viruses, coronaviruses, and numerous other emerging infectious diseases.
The scale of this problem was comprehensively documented in the landmark study “Over half of known human pathogenic diseases can be aggravated by climate change,” published in Nature Climate Change. Led by Camilo Mora and colleagues at the University of Hawaii at Mānoa, the study systematically reviewed the scientific literature and concluded that 58% of all known human pathogenic diseases have been aggravated by one or more climatic hazards, including warming, flooding, drought, heat waves, storms, sea-level rise, and changes in land cover.
The authors identified more than one thousand distinct pathways through which climatic hazards increase disease transmission, severity, or human exposure. These mechanisms include shifts in wildlife migration, expansion of vector populations into higher latitudes and elevations, increased survival of pathogens during warmer winters, flooding of contaminated water systems, displacement of human populations, and increased interaction between humans, livestock, and wildlife.
The researchers concluded that the diversity and complexity of these transmission pathways make comprehensive adaptation increasingly difficult. As Mora and colleagues observed, the number of diseases affected and the multitude of transmission mechanisms make it unrealistic to expect adaptation alone to eliminate the growing health risks associated with climate change. Consequently, reducing greenhouse gas emissions remains the most effective long-term strategy for limiting climate-driven disease emergence.
For these reasons, the exclusion of pandemic-related costs from the present analysis should not be interpreted as evidence that climate change has no influence on infectious disease. Rather, it reflects a deliberately conservative methodological choice. Until attribution science can quantify these relationships with greater confidence, the associated mortality and economic losses remain outside the scope of this paper. Consequently, the climate burden estimates presented here are more likely to understate than overstate the true long-term societal costs of climate change.
Similarly, this paper excludes government support for fossil fuels in the form of explicit and implicit subsidies. Estimates of annual U.S. fossil fuel subsidies vary widely depending on methodology—from approximately $10 billion in direct fiscal support to several hundred billion dollars annually when unpriced environmental and public health externalities are included. Because no universally accepted accounting framework exists for these subsidies, they were omitted entirely from the reported estimates.
These exclusions are deliberate methodological choices intended to avoid overstating climate damages. Consequently, the estimates presented here should be interpreted as conservative lower-bound estimates of the economic burden imposed by climate change. Incorporating additional categories of attributable damages or broader measures of fossil fuel subsidies would almost certainly increase the estimated societal costs beyond those reported in this paper.