Warmer weather will cost Alaska hundreds of millions of dollars annually, report says

University of Alaska economists believe the impacts of climate change could cost the state hundreds of millions of dollars per year in the coming decades.

The consequences of a warmer climate — from failing infrastructure to community relocation, increased wildfire frequency and shorter ice road seasons — are likely to be a net loss of $340 million to $700 million per year, according to a University of Alaska Anchorage Institute of Social and Economic Research report published this past November.

That report, Economic Effects of Climate Change in Alaska, focuses on the net costs of five widely reported effects over the next 30 to 50 years, a timeframe used for long range economic and infrastructure plans. Those costs would equal 0.6 to 1.3 percent of the state’s $51 billion GDP, but they would not be distributed evenly, “as rural communities face large projected costs while more southerly urban residents experience net gain,” the report states.

The projections are based Alaska’s annual average temperatures rising 1 to 2 degrees Celsius by 2050, as the U.S. National Climate Assessment published last year by the U.S. Global Research Program forecasts, with warming by up to 3 degrees Celsius statewide by the end of the century.

The authors, ISER professors Matthew Berman and Jennifer Schmidt, note annual average temperatures across the state have risen by 1.5 degrees Celsius since the 1950s.

Infrastructure damage from thawing permafrost and coastal erosion are a major portion of the overall impact cost, at $250 million to $420 million per year between 2015 and 2060.

The Fourth National Climate Assessment estimates an additional $110 million to $270 million will be needed annually to maintain select portions of Alaska’s infrastructure.


Those costs were limited to impacts to public transportation and pipeline infrastructure without accounting for private industry buildings, the report notes, and are expected to arise from projects with shorter useful lives and the subsequent for early reconstruction.

Current erosion issues, particularly along the state’s western coast, are also likely to get worse, the assessment adds.

“Longer sea ice-free seasons, higher ground temperatures, and relative sea level rise are expected to exacerbate flooding and accelerate erosion in many regions, leading to the loss of terrestrial habitat in the future and in some cases requiring entire communities or portions of communities to relocate to safer terrain,” it states.

The ISER study estimates the annual total for bracing against coastal erosion and flooding and eventually relocating communities from it at $50 to $100 million. It notes the State of Alaska has requested $162 million from the federal government for three communities — such as Newtok on the Yukon-Kuskowkim Delta — that the U.S. Army Corps of Engineers expects will need to be relocated within 15 years. Other, more northerly Western Alaska villages such as Kivalina and Shishmaref have also been the subjects of relocation studies.

A higher number of wildfires would likely have a host of effects on Alaska, from fewer tourists to public health issues as well as the more easily quantifiable impacts of firefighting and property damage costs.

The report estimates the combined increased annual cost of fire protection and property damage claims is likely to be $25 million to $40 million based on the growing frequency of years with over 1 million acres burned in the state.

Shorter ice-road seasons — requiring more expensive permanent gravel or limiting travel options — are another challenge. Building all-season roads across the North Slope would cost another $10 million to $20 million per year, according to the study, to maintain travel to remote communities as the climate warms.

Former Gov. Bill Walker’s administration began conceptual work on a network of primitive all-season roads across the western Slope with the Arctic Strategic Transportation and Resources, or ASTAR, project in 2017.

A major positive of a warmer climate — particularly in rural Alaska where energy prices can be extremely high — is reduced heating costs. By correlating current average statewide energy cost and consumption data with long-term climate forecasts, Berman and Schmidt conclude Alaskans could save $100 million to $150 million per year on space heating costs over the next 30 to 50 years.

The number of annual heating degree days, 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, according to the report.

Additional changes could need to be made in areas such as hydropower production with higher winter water levels.

The final effects on Alaska’s fisheries of ocean acidification stemming from higher levels of carbon dioxide in the water remain to be seen but are a significant worry for many, Berman and Schmidt note as well.

Elwood Brehmer can be reached at

Elwood Brehmer, Alaska Journal of Commerce

Elwood Brehmer is a reporter for the Alaska Journal of Commerce. Email him: