The Economic Effects of Climate Change Essay Example

The goal of this paper will be to allow readers to be highly informed about the nature of climate change and the effects it may have on the economy. With that being said, before outright explaining the economic deficit climate change may cause, readers must first be knowledgeable about climate. The structure of this essay will comprise of three different elements. The first element will be to inform readers about the general climate. The second element will be about information regarding climate change and how it affects the economy. Lastly, the third and final element will introduce a variety of climate change policies that either failed or had potential to succeed.      

For readers to really understand the magnitude of climate change, one must first understand the term climate and weather and what type of significance it plays in this world as a whole. Climate change is the alteration of average weather that occurs over as much as millennials. The climate system consists of the atmosphere, hydrosphere, cryosphere, biosphere, and lithosphere. (“Climate”, 1991) In other words, the outer shell of the planet. Climate is the long-term average of weather. Weather is the state of the atmosphere at a specific place and time. Temperature, overcast, rain, etc, are all attributes of weather which is constantly changing every day. Climate, however, is a description of these conditions when averaged for a long period of time.  (“Difference”). 

The Earth receives most of its energy from the sun, the excess energy is returned to the cosmos. One could say there is an energy budget of the planet. If the climate system retains more energy than it could give away, without a doubt it can warm up; in some cases, the climate may cool down. (Ahlonsou et. al, 2018). 

Climate Change

Humanity as a whole has been emitting greenhouse gasses on a large scale since the industrial revolution. Moreover, the average temperature measuring in the current decade has increased by about 0.93 celsius compared to the dawn of the industrial revolution from 1815-1900.(“Causes”, 2021). According to the Intergovernmental Panel on Climate Change, the Earth is currently overgoing a period of global warming. Though fluctuations in volcanic, solar, or oceanic activity among others do contribute to the warming, the IPCC emphasizes that growth of the human economy is the main source of global warming.  that decreasing productivity of food sources such as fisheries and grain, rice, and maize crops may lead to food shortages, and that lack of drinking water combined with increasing humidity, temperature, and pollution may harm our health. In addition, coastline-changing floods, heat waves, fires, pest plagues, outbreaks of diseases, sudden storms, or high humidity will wreak havoc on our capital, and even on entire economie and ecosystems.(Sovacool, 2015). 

Rural areas face water and food shortages, as well as infrastructural and financial damages.

According to experts the total damage to the economy is difficult to estimate, but it is  expected to be a steady decrease in economic growth and impoverishment of poorer nations whose people will find it more difficult to migrate from particularly affected regions. Conflicts due to poverty and economic shocks are expected to be more frequent.

Monetary values such as costs of living, potential profits and wages, or capital assets tell much about the well-being of society. Even health loss can be appraised by looking at costs of insurance and treatment.To some extent even forest damage or wildlife mortality translates into money through gain-and-loss analyses in the wood, agriculture, or livestock industries.Without economics, the world would have to rely on subjective qualitative assessments that lack a common denominator. Instead, we can use prices or such indicators as GDP or CPI to make intersubjective evaluations that aggregate multiple individual preferences. 

The average power plant can emit 10 million tons of co2 into the atmosphere every year. This is causing rising temperatures, more erratic weather patterns, the loss of natural habitats not to mention the degradation of breathable air quality.(Davis et. al, 2010). Building and agriculture businesses are the most susceptible to these early changes droughts and higher than average temperatures are making it increasingly more difficult to grow certain crops or raise certain livestock increasing the reliance on industrialized farming techniques potentially furthering the issues of climate change these side effects have also started impacting the building industry hot weather is not conducive to efficient construction workers the prevalence of extremely hot days in many economies around the world has been shown to cause many job sites to massively slowdown or outright stop work for fears of the health impacts of working in extreme heat.

The International Labour Organization published a report titled “Working on a Warmer Planet”, that sought to add up all of these seemingly minor impacts and found that just in the construction sector alone the projected loss in output was estimated to reach two point four trillion u.s. dollars per year. (Koliev et. al, 2018).

Kyoto Protocol 

Kyoto Protocol, according to the United Nations the Kyoto Protocol is an agreement linked to the United Nations Framework Convention on Climate Change which omits its parties to setting internationally binding emission reduction targets. Since being adopted in December 1997, the protocol has been active since February 2005 the protocol enacts a stricter policy on developed nations because it recognizes that developed countries are mostly responsible for the large amounts of greenhouse gasses. (Grubb et. al, 1999). The main objective of the Kyoto Protocol is to reduce the amount of harmful chemicals that are pumped into the atmosphere. The policy does this by establishing a structure of rolling emission reduction commitment periods for its members to abide by some of the principle concepts of the protocol, including minimizing impacts on developing countries by establishing an adaptation fund for climate change. Moreover, establishing legally binding commitments to reduce emissions of greenhouse gasses for its parties, and establishing a compliance committee to enforce compliance with the commitments under the protocol.(Lau et. al, 2012). 

The Kyoto Protocol failed due to a number of reasons. First,  not obtaining a global response. Many countries such as the United States and Canada, which by far are one of the highest emitters of greenhouse gasses, exited from the protocol. Second, China and India were exempted from the treaty. At the time during the first period of the Kyoto Protocol(1990), China and India were considered developing countries. According to climate watch data, from 1990 to 2016, China increased greenhouse gas emissions by 296.2% and India increased greenhouse gas emissions by 174.6%. Third, there was no long term goal for the Kyoto Protocol even after 2012.