Credit: Wikimedia Commons

Discussions of climate change typically look ahead, a doomsday clock ticking for the future. That attitude is costing us dearly. A new analysis shows how costly climate change already is.

In the Proceedings of the National Academy of Sciences, Derek Lemoine of the University of Arizona reports that climate change has already reduced U.S. income, making salaries lower by about 12% than they would have been without climate change.

Of course, the exact number is almost impossible to calculate. But the ballpark shows just how much we’re already paying for climate heating.

“If we can’t figure out what climate change is already costing us with the data we have, projecting the future becomes almost hopeless,” Lemoine said in a University of Arizona release.

The Unseen Bill

To calculate this “hidden tax,” Lemoine built two versions of the United States: one shaped by actual human-driven climate change, and a hypothetical one without it. By matching climate models with real-world data from 1969 to 2019, he tracked how temperature shifts correlated with personal income.

The difference in methodology changes everything. When you look exclusively at local temperatures—how hot it is in your specific town—the economic hit looks minor, dragging income down by just 0.32%.

But we don’t live in isolated bubbles. When Lemoine factored in the long-term effects of warming and how trade connects the states, that loss ballooned to 12%.

“A lot of the real cost comes from how temperature changes across the whole country ripple through prices and trade,” Lemoine said in a statement. “It’s not just about the weather where we live. When every region is affected at the same time, the economic consequences add up quickly.”

Critically, this study doesn’t even account for headline-grabbing disasters like hurricanes or wildfires. It focuses strictly on the slow grind of everyday weather—the economic friction that occurs when hot days simply become more common.

Heat Across the Economy

Credit: Wikimedia Commons

Even when we acknowledge climate change is happening now, we tend to view it locally: a heatwave hits Texas, so Texas pays the price. Lemoine’s analysis argues that the economy is too interconnected for that logic to hold.

“The reason the effects get so much larger is that climate change operates through the whole economy,” Lemoine said. “Places are linked through trade, so temperatures in California or Iowa can influence income in Arizona. Those cross-state connections turn local weather changes into nationwide economic impacts.”

Heat reduces productivity, lowers crop yields, and changes how people spend money. These aren’t isolated events; they feed into the price of goods and shipping across state lines. The study did not aim to identify every pathway behind these losses.

However, Lemoine is careful to note that 12% is an estimate, not a receipt.

“I would not put too much weight on the exact number. That estimate is imprecise and can move depending on assumptions,” he told BBC Science Focus. “What does not change, though, is that climate change has caused losses of at least several per cent and that these losses are driven by how it altered weather elsewhere in the country, not by how it altered a county’s local weather.”

For Lemoine, one of the most important implications is how we track these effects. He argues that agencies could update estimates like this regularly, making climate damage a standard economic indicator reported alongside employment or inflation.

“We would love to know how this number is changing over time,” he said. “That’s exactly why I think its calculation should be institutionalized, so that we calculate numbers like this every year.”