Impact of Climate change on Global Economy
As awful as this pandemic is, climate change could be worse. If you want to understand the kind of damage that climate change will inflict, look at COVID-19 and spread the pain out over a much longer period of time.
The loss of life and economic misery caused by this pandemic are on par with what will happen regularly if we do not eliminate the world's carbon emissions.
While the pandemic has already hampered the economy enough, climate change and destabilisation has the potential to be totally unforgiving for the world economy, something from which it may never truly recover again. Sanjay Srivastava, Chief of Disaster Reduction at the UN Economic and Social Commission for Asia-Pacific (UNESCAP), is of the same opinion and maintains that COVID 19 cannot be an excuse to delay action on climate change.
The discourse around climate is comparatively new and still developing, and as a result, it might so happen that you are unaware of where exactly we stand in this ongoing crisis.
Here are a few facts to bring you up to speed:
An assessment by NASA's Goddard Institute for Space Studies shows that the average temperature of the world has risen around 1 Celsius since 1880, which is faster than any other temperature spikes recorded in the history of the Earth. This rise in temperature is not occurring uniformly where that of the Arctic and Antarctic are rising faster than those in temperate and tropical areas. As a result, portions of the polar vortex have split off and are disturbing the jet stream and thus causing wild fluctuations in the weather. Frequency of extreme weather conditions like tornadoes, wildfires, hurricanes, blizzards, floods and landslides, heat waves, violent storms and droughts have gone up.
As of June 2020, the carbon dioxide levels recorded by NASA were 414 parts per million (ppm) which last happened during the Pliocene era. A lot of this atmospheric carbon dioxide is being absorbed by the oceans, making them 30% more acidic since the beginning of the Industrial Revolution resulting in mass extinction of sea life. Not only that, but the oceans have also absorbed 90% of the heat causing them to expand and thus giving way to rising sea levels and flooding.
These are only some of the grave concerns that climate scientists and researchers are having to deal with, and needless to say, something as overarching as the climate is bound to have its effects on the different aspects of society like global politics and economics.
While the world is distracted with the ongoing pandemic situation, the date for USA’s withdrawal from the Paris Agreement in November 2020 is looming closer and should prompt us to start taking action.
It might not be enough to just to say that the economic impacts of the climate crisis will be humongous. Detailed micro sectoral studies determining the impacts of climate change as per the Eboli, Parrodo and Roson (ibid.) parameters identify issues like agriculture productivity, sea level rise, water availability, tourism, energy demands, human health and Labour productivity.
Here are a few aspects of how the global economy will be affected:
Gross Domestic Product
Projections indicate that if no concrete steps are taken, the temperatures will rise by 4 degree Celsius by 2100 and that would result in a 30 percent fall in global GDP from 2010 levels. The last time such a fall was recorded was during the Great depression, when GDP fell 30 percent and the only difference in this case will be that it will be a permanent damage.
It has been reported that extreme weather has cost $1.775 trillion from 1980-2019, and many companies fearing losses have started to refuse insurance cover for climate-based damages, and there is speculation that insurance firms will have to raise premiums to cover rising costs from extreme weather making it too expensive for most people.
The World Employment and Social Outlook 2018: Greening with jobs estimates that climate change threatens 1.2 billion jobs while efforts for greener technology and to stop climate change has the potential to create 24 million new jobs by 2030.
The industries most at risk are agriculture, fisheries, and forestry and to a certain extent those based on natural resources.
Climate change is bound to bring about natural disasters the frequency of which has already increased a whole lot. This in turn will create mass migration around the world, having already displaced close to 79.5 million people around the world as per data provided by the UNHCR (United Nations High Commissioner for Refugees)
It is estimated that, by 2050, between 150 to 200 million people are at risk of being forced to leave their homes as a result of desertification, rising sea levels and extreme weather conditions.
It is quite natural that as climate change more and more land will become uninhabitable due to either rising sea levels or extreme temperature or eccentric wild weather conditions. This will force the world's population to live in increasingly concentrated spaces which in turn will catalyse more environmental damage.
By the end of the century, global mean sea level is likely to rise at least one foot (0.3 meters) above 2000 levels, even if greenhouse gas emissions follow a relatively low pathway in coming decades.
Rising water levels and wild weather conditions are also a concern for national security as many security posts could become inefficient.
Trade of agricultural produce has grown tremendously in recent years, and countries around the globe are able to import and export significant amount of its yield. A direct corollary that follows climate change is uncertain crop pattern and declining worker productivity. This is bound to increase the cost of food by a huge margin and shortage of food supply.
Despite improvements in technology to increase yields, extreme weather events have caused significant reductions of crop produce.
Rising Energy costs
With the prevalence of more and more extreme climates we are also likely to require more energy to make our living conditions habitable. Not only will the energy demand rise its supply will decrease either due to power stations being compromised as a result of the climate or due to a transition to green energy.
Considering the fact that energy forms the this is for most of the world's production the effects of fire and the prices will reverberate throughout the global economy.
The Way Forward
While some damages may already be irreparable, there is still time to be better and be mindful of the climate related consequences with regards to our developmental projects.
Here are some ways in which we can try to lower our carbon emissions and reduce our carbon footprints.
Smarter urban developments
Compact, connected & co-ordinated cities can stimulate economic growth. Implementation of technologies like IOT can improve the efficiency of operations. Cities in US, like Boston and Baltimore have deployed smart trash cans that relay how full they are and inform sanitation workers.
Circular industrial economy
The evils of single use plastic are already known to us. While many countries like India, are trying to ban single-use plastic, the policies have to be more robust, encouraging and facilitating the use of recyclable materials. Consider how to reuse, repair and recycle items, thus promoting the need for sustainable manufacturing and consumption.
Smart water management
Many parts of the world are already facing acute water shortage Technological improvements in water treatment and recycling can help prevent this and ensure that the energy used to transport water are managed effectively. Since 1967, South Korea has been developing and managing its water resources, and has become a ideal model in the Asia-Pacific region.
Sustainable land use
Agricultural procedures following sustainable farming methods along with proper protection of ecosystems has the potential to generate long-term economic benefits. The global market of food products produced in organic farms has grown four-fold over the past century. Food produced in China by respecting the cycles of nature, with no pesticides or genetically modified fertilisers are practised models of sustainable farming.
Clean energy systems
It is imperative that governments actively try to implement green energy systems with decentralised, digitised electrification technologies to reduce the pressure on fossil fuels and non renewable energy resources. Europe has set a new directive that establishes a new binding renewable energy target for the EU for 2030 of at least 32% of final energy consumption, with a clause for a possible upwards revision by 2023.