Climate change is already shrinking Americans’ incomes, not just through extreme weather disasters but through a slower, nationwide economic drag that has built up over decades, according to a new study.
The research estimates climate change has reduced U.S. incomes by about 12% since 2000, largely by disrupting trade and production networks that connect counties and states across the country.
“It’s not changing the weather where you live that matters most,” said Derek Lemoine, a professor of economics at the University of Arizona and the study’s lead author. “What really drives up the cost to the economy is changing the weather all around the country at the same time.”
For North Carolina households, that means climate change can affect wages, prices and job stability even without a major storm or heat wave hitting locally.
How researchers measured the cost
Lemoine analyzed more than 50 years of county-level income data alongside daily temperature records. He then used climate models to compare today’s weather patterns with a world without human-caused greenhouse gas emissions.
When researchers look only at local weather changes, climate change appears to reduce income by less than 1%. But when they account for how temperature changes affect production and trade nationwide, the estimated income loss increases sharply.
“Most of the cost is coming through trade networks,” Lemoine said. Weather in one region affects supply chains, prices and incomes far beyond state lines.
Why the impact is widespread
The study found that once nationwide connections are included, income losses appear across nearly the entire country, regardless of whether local temperatures rise or fall.
“If climate change only affected one place at a time, markets could adjust,” Lemoine said. “But when it happens everywhere, year after year, the effects spread.”
The losses are not typically seen as sudden pay cuts. Instead, they show up as slower wage growth and declining purchasing power over time.
Limits of the analysis
The study focuses solely on daily temperature changes and does not include losses from hurricanes, floods, wildfires or other extreme weather. That means the overall economic impact of climate change is likely higher.
The estimate also comes with uncertainty. Lemoine said the true income effect could plausibly range from about 2% to more than 20%. Even so, he said the direction of the impact is clear.
“The cost is not zero, and it’s not small,” he said.
Why it matters now
Lemoine said the findings challenge the idea that climate change is mainly a future problem or one confined to disaster-prone areas.
“This is something we’re already living with,” Lemoine said. “Adaptation isn’t just about local weather risks. It’s also about managing economic exposure to climate impacts happening elsewhere.”
For states like North Carolina, where policymakers often debate the cost of climate action, the study suggests inaction already carries a measurable economic price.
“Climate change is an all-of-economy event,” Lemoine said. “We’re all connected, and we’re all affected.”