Climate Change Economics

Flood Waters in Village
Written by World of Phenomena

Regardless of its causes, climate change is likely happening, and its continuation seems inevitable. By 2050, the some extreme estimates predict that most of South Florida will be underwater. Let’s discuss some of the future economic effects of climate change.

Climate Change and the Economy Today

According to an article in The Atlantic, one of the most drastic examples of the economy being affected by climate change was 2012’s Hurricane Sandy. Blasting through parts of the United States and the Caribbean that normally don’t experience hurricanes during that time of year, the damage caused by Sandy exceeded $65 billion.

Among the many industries affected by this climate change catastrophe were:

  • Tourism: More than $1 billion in tourism revenue and 10,000 jobs were lost as a result of the devastating storm.
  • Small businesses: Flooding caused tens of thousands of small businesses to suffer inventory loss.

However, there were some bright spots in the economy associated with the storm. For example, stores such as The Home Depot saw a sudden surge in sales thanks to the need to repair damaged homes and businesses. Home improvement stores saw more than $200 million in sales following Hurricane Sandy.

Long-Term Effects of Climate Change

Time magazine reports that climate change is having long-term effects on the economy, and none of them is good. For example:

  • By 2100, gross domestic product will be more than 20 percent lower than it is today. Put simply, we cannot produce things if we don’t have access to what we need to produce them. If agricultural land is underwater because of climate change, we cannot grow crops there.
  • “A Citigroup report released last month found that minimizing temperature rises to 2.7ºF (1.5ºC) could minimize global GDP loss by $50 trillion compared to a rise of 8.1ºF (4.5ºC) in the coming decades,” reports Time.
  • While climate change may warm up regions known for colder temperatures, such as the Northeast, thereby increasing productivity in those areas, the same climate change could also have devastating effects in warmer climates, such as in the tropics.

Reversing the Effects of Climate Change

If we wish to make the world a better place, not just for us but for future generations, we need to be proactive in reducing the effects of climate change. And according to How Stuff Works, doing this is actually easier than you might think. For example:

  • Reduce greenhouse gas emissions. This is perhaps the single most important thing people can do to reverse the effects of climate change. Plant more trees. Use less in the way of fossil fuels. Take public transportation or walk when you can.
  • Recycle carbon. By some estimates, even if everyone began making changes tomorrow morning, it would take a good 1,000 years before the effects of climate change were fully reversed. One way we can speed up the process is by figuring out ways to remove carbon from the air and recycle it. Carbon is, after all, the basis of all life forms on Earth.
  • Solar energy. Finally, but certainly no less importantly, we on Earth have one of the best available sources of energy: the sun. By harnessing its power and using it in place of fossil fuels, we can help to reverse the effects of climate change.

About the author

World of Phenomena