The $4 Trillion Heat Bill: What States Are Actually Losing

Duke’s Nicholas Institute recently released a report that shows the national loss of productivity due to heat. It covered a period from 2001 to 2023. “Counting the Cost” examined factors by state, region, and injury. National heat-related productivity losses nearly doubled from $130 billion in 2001 to $220 billion in 2023. Over the full 23 years, that compounds into a national productivity loss of close to $4 trillion.

Andrew John Stevenson, an analyst at Bloomberg Intelligence, commented, “This is actually a very conservative number. If someone can’t work 20% or 30% of a day, there’s not just the labor that’s waiting around; there’s all the capital that’s waiting around.”

Less than a dozen states made up the great majority of these losses. Across the entire analysis, the focus is on two figures. The first is absolute dollars lost per state. The other is the relationship between the loss and state GDP. A large economy like Texas may post a large heat productivity loss figure, but taken in context, the financial effect is small

One critical issue for state effects is that the construction sector has a disproportionate weighting. The data show that construction losses were heavily in the south, which includes Texas, Florida, and the Southeast states.
Construction absorbed the largest increase in heat losses nationally at about $38 billion in growth over the study period. This was followed by transportation and warehousing at $18 billion. Both sectors are disproportionately represented in Texas, Florida, and the broader Southeast, which is part of why the state-level and industry-level findings reinforce each other rather than telling separate stories.

The issue of whether state economies are affected by a large amount over the period also has to do with the extent to which a state’s GDP is dominated by services. The best example is California. A huge part of its GDP is from software and IP-based industries, neither of which is affected in any significant way by temperatures. States with large shares of GDP in construction, agriculture, and outdoor transportation absorb losses that states with service-heavy economies do not. That also means the negative GDP effects on them are likely to be mitigated in the future. Texas and Florida sit at the intersection of large heat exposure and large heat-exposed industry share. This is why about a third of the national loss is just these two states. This is unlikely to change without a shift in either climate or industrial composition

Texas and Florida are, indeed, in a category of their own. In each case, the total loss was well over half a trillion dollars. Texas posted $37 billion lost per year on average, 2001–2023. Cumulative: roughly $850 billion. Florida posted a loss of $26 billion per year. Cumulative: roughly $600 billion
Between them, Texas and Florida account for roughly $1.45 trillion of cumulative heat-related losses, which was more than a third of the national total.

The balance of the largest tier states based on the “Counting the Cost” yardstick
California — ~$8 billion/year, ~$185 billion cumulative.
Georgia — ~$7.5 billion/year, ~$170 billion cumulative.
North Carolina — ~$7 billion/year, ~$160 billion cumulative.
New York — ~$4.5 billion/year, ~$105 billion cumulative.

These are the states that sustained the largest losses, either in absolute dollars or as a percentage of state GDP.

Average annual loss and estimated 23-year cumulative loss (2001–2023), based on the report’s average-annual figures multiplied by 23. Ranked by cumulative dollar loss.
Texas — ~$37B/year avg. — ~$850B cumulative.
Florida — ~$26B/year avg. — ~$600B cumulative.
Louisiana — ~$8.5B/year avg. — ~$195B cumulative.
California — ~$8B/year avg. — ~$185B cumulative.
Georgia — ~$7.5B/year avg. — ~$170B cumulative.
North Carolina — ~$7B/year avg. — ~$160B cumulative.
Tennessee — ~$5B/year avg. — ~$115B cumulative.
Alabama — ~$4.5B/year avg. — ~$105B cumulative.
Arizona — ~$4.5B/year avg. — ~$105B cumulative.
New York — ~$4.5B/year avg. — ~$105B cumulative.
South Carolina — ~$3.5B/year avg. — ~$80B cumulative.
Oklahoma — ~$3B/year avg. — ~$70B cumulative.
Mississippi — ~$2.8B/year avg. — ~$65B cumulative.
Arkansas — ~$2.5B/year avg. — ~$55B cumulative.