As the alarming effects of climate change are being discovered, global warming
Is one of the three major challenge for the world is facing today. Not only is climate change a severe threat to the environment and to human life, climate change is threatening the global economy as well. This environmental issue requires political-private sector cooperation to change the means by which produce is made, to ways that assure and drive the improvement of sustainable economic development. The effects of climate change in economics also needs to be addressed to ensure sustainable economic development. This is because if the current trends continue, the impacts of climate change will affect the capacity of developed economies to provide adequate resources to alleviate poverty, while developing countries will be left with no economic base to fall back on, in terms of infrastructure and basic needs.
Although the science behind the effects of climate change in economics is still evolving, the potential negative effects are already being felt. The effects of climate change in economics could be classified as both long-term and short-term. The longer term effects are characterized by lower productivity, lessening opportunities for research and development, higher costs of energy and natural resources, and degradation of the livability of the land.
The effects of climate change in economics that can be observed now are the impact of increasing air temperatures
Changing precipitation, and intensifying weather patterns. These factors have reduced the absorption capacity of the soil for growing plants. In addition, increased frequency and intensity of heat waves have affected agricultural production. The shrinking of the polar ice caps has made arable land vulnerable, and crop fields are showing signs of damage from heat stress. Increased vulnerability to natural disasters such as hurricanes, cyclones, floods, drought, and snow storms has also led to a greater demand for water, causing an increase in prices and affecting the food market, and in turn, the financing of public infrastructure.
According to the Intergovernmental Panel on Climate change (IPCC), the most immediate and future economic impacts of climate change will be in the form of reduced crop production, increasing food prices, and sea level rise. Increased crop production is critical for meeting the food demands of the world’s population. Stocks of grain, livestock, and oilseeds are being used up at record levels. Rising sea levels may erode land shoreline leading to greater risk of coastal flooding. Warming temperatures increase the risk of heat waves, which in turn, reduce the productivity of agricultural land in cropland areas. The shrinking of the polar ice caps will also increase the risk of coastal flooding.
What is being perceived as a negative effect of climate change?
In economics is the continued growth of coal, petroleum, and natural gas. Each of these is a major source of carbon emissions that contribute to climate change. Because these fuels are used in electricity generation, their extraction, processing, and distribution will increase greenhouse gas emissions. This in turn will lead to higher levels of taxation, increased energy costs, and a reduction in the economic growth of nations. It is estimated that the cost of implementing a carbon neutral strategy may reach $1 trillion per year over the next several years.
The effects of climate change can be seen in the rising airfares in urban areas, increased frequency and severity of natural disasters, and the impact to the food and beverage markets. The cost of adaptation is forcing the world’s poor to migrate, creating an imbalance in wealth and power between developing and developed countries. While this does provide an opportunity for improved cooperation among countries in terms of development and energy efficiency, the massive influx of people will strain already strained social services. While the costs and risks of climate change impacts on the global economy are substantial, the opportunity for developing nations to develop sustainable methods of energy and food procurement while addressing climate change will provide a welcome change.