Climate Adaptation Can Strengthen USA’s Economic Future

A new study finds that climate change is already imposing high costs on the United States economy, reducing incomes and reshaping economic activity across the country.

Published in the Proceedings of the National Academy of Sciences on 16 December 2025, the study “Climate change has already made the United States poorer” shows that persistent rises in temperature have reduced average American incomes by around 0.32%. The impacts are most pronounced in the Great Plains and the Midwest. However, when the analysis accounts for both historical temperatures and climate effects across all counties, the estimated income loss rises sharply to approximately 12%.

Rising temperatures and national economic losses

According to the study’s lead author, Professor Derek Lemoine of the University of Arizona, the economic costs of climate change extend well beyond local weather conditions. “Climate change is already costing the US economy by changing temperatures around the country,” Lemoine explains. He adds that many of these costs are indirect, driven not by conditions where people live, but by how weather changes elsewhere disrupts supply chains and influences the prices of goods traded nationwide.

Because the US economy is deeply interconnected through trade, temperature changes in major agricultural or industrial states such as California or Iowa can affect incomes in distant regions, including Arizona. Local climate impacts, therefore, accumulate into broader national economic effects.

Measuring the economic impact of climate change

To isolate the effects of warming, the researchers developed a formal framework that captures how climate change has influenced each county’s economy by altering both current and past weather conditions at local and national scales.

The study models two scenarios: a world with human-driven greenhouse gas emissions and one without. Using 50 years of county-level income data from 1969 to 2019, the analysis reveals that previous estimates understated the economic toll of climate change. Earlier assessments suggested income losses of around 1%, but by accounting for persistent, year-on-year warming across the country, the study places total losses closer to 12%.

Climate change as an ongoing economic factor

Lemoine argues that climate change should be treated as a continuous economic force rather than solely as a future risk. Rising temperatures have already affected prices, productivity, regional trade, and energy demand, key factors that shape business costs and household incomes.

The study suggests that its framework could be used to monitor the economic impacts of climate change in real time, much as indicators such as unemployment or inflation are used. Such an approach could help policymakers and businesses identify where climate adaptation measures are most urgently needed and allocate resources more effectively.