The destabilisation of the climate has had varying economic impacts across the globe depending on development indexes. It is also important to remember that some countries do not disclose all the information about their economies, eg. communist regimes such as North Korea. Recent reports estimated that over 20 separate sectors of industry are directly affected by climate change. Climate change is an example of a negative externality from the production of goods and services that involve high emissions, and the consumption of those goods due to the high demand. The factors we can consider broadly are GDP and immigration.
Firstly if we look at GDP (gross domestic product), a Stanford study from 2015 predicts that there is a 51% chance that climate change will reduce the world’s GDP by more than 20%. Although this is just a projection, it gives us a broad idea of the economic impacts climate change can have. To put this into context, the Great Depression, which was a direct consequence of the economic Wall Street Crash, caused GDP to fall by 26.7%. This shows climate change to be on par with one of the most extreme recessions we have seen in modern history. The main difference is, that GDP loss through climate change would be permanent, as the fossil fuels that are used in the production of most goods and services are non-renewable. It will take a long time for countries to establish a new way to allow production at the same rate. The same study mentioned previously found that there was a 71% chance that climate change will have a definite negative impact on GDP and the global economy.
Immigration is another largely affected factor. The vast natural disasters of climate change cause the need for many to flee their homes annually. From flooded coastlines, to earthquakes and hurricanes, from 2008 till 2018, climate and weather related events have displaced 22.5 million people per year (United Nations High Commissioner for Refugees). By 2050, the International Organisation for Migration could cause a potential 1 billion people to emigrate. An example of this would be the USA southern border where Mexico and Central America are experiencing worsening climate situations. Estimates from the World Bank say that between 1.4 million and 2.1 million people will migrate from Central America due to the devastating climate issues by 2050. Another factor is the worsening food security from the extreme weather (eg. droughts) that can destroy food sources and crops. This is a prevalent reason for people who feel the need to flee their homes.
To conclude, the impacts of climate change can be felt in many economic forms. GDP is the biggest and most relied upon measure of a country’s development, thus to examine the extent to which can be affected is shocking. Immigration is also a widely talked about topic, and many people worry about the consequences it can have for overpopulation of certain regions and countries. The economic impacts of climate change are much greater than many would imagine.
Who’s Future? Our Future.
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