With the United Nation's recent report on climate change, an apocalyptic tone has been set for our potential future. The environment and economy are both heading towards an ugly and irreversible place if we do not take measures to change our course. Experts report a “high confidence” that human-induced climate change will do a drastic amount of damage, specifically to the polar ice caps and the oceans. This damage would then be felt across the globe in countless ways, altering human existence as we currently know it.
Detractors to climate change seem to overlook the fact that climate change on Earth has never happened like this before. While the Earth has gone through phases of warming and cooling, this is the first time that seven billion humans have been on the planet while it has happened. Furthermore, this is not a natural warming, but rather one that was brought on in a significant amount by mankind. Beyond our contribution of harmful greenhouse gases, we are also rapidly expanding our population. As population expands, the need for fertile soil and livable land adds stress all over the globe, though these effects are felt most in underdeveloped nations. Ironically, these nations usually have contributed the least to the problem our planet is currently facing.
While some experts within the community refute the report, calling it “alarmist”, the majority currently believes climate change is a significant threat. According to the Copenhagen Consensus Center in Massachusetts, “Climate change is real and man-made...After year 2070, global warming will become a net cost to the world, justifying cost-effective climate action." Whether it is the recent threat of the Earth or the threat on budgets, climate change does seem to be getting attention from governments across the globe. If climate change does impact the planet like predicted, here are a few ways we may be feeling the effects on a financial scale as well.
4 Food Supply And Demand
As stated above, our population is already ballooning to over seven billion people. If climate change continues to ruin once fertile lands, we could all be in for a large-scale drought – bad news for key crops. Recent price spikes for certain foods may have caught the attention of many shoppers, and this could be an early indication to what may lie ahead.
The decline won't be in one massive swoop. Rather, it is predicted that the decline in crop production will happen over the course of the next fifty or so years. While this happens, prices will inflate until many areas of the world receive the label of being a “hunger hotspot.” These hotspots already exist all over the world. With crops and soil being a shell of their former fertility, this could lead to areas not receiving vital crops, in turn leading to malnourishment.
Some of this is already taking place. The UN report further went on to explain,
“Climate change has negatively affected wheat and maize yields for many regions and in the global aggregate...[Since 2007] several periods of rapid food and cereal price increases following climate extremes in key producing regions indicate a sensitivity of current markets to climate extremes, among other factors.”
3 Population Shifts
As more regions begin to see larger scale effects of climate change, the citizens may become “Climate refugees” as they escape the harsh reality of their homelands. Many factors could spark this type of action. Severe natural disasters, like flooding, landslides and droughts, could be key factors. If key crops continue to diminish, a civil unrest could bring about the same sort of defection from the area.
If this does happen, where will they go? The burden will soon be placed on surrounding regions to support these refugees or turn away their fellow human beings. As previously stated, the human population now sits around seven billion people. Imagine a large portion of the Earth either in a state of unrest or trying to migrate to new parts of the world. The need to support and integrate these people into the job market would be an insurmountable task. The fragile economic systems could become fractured to points of very little repair.
2 Invention And Prevention
Nearly 20 percent of cities across the globe have already adopted climate adaptation plans into their agendas. Broad estimates have predicted that the global community could end up spending $49 to $171 billion a year on climate adaptation plans. Others have predicted as high as three times that estimate. In light of the destruction caused by Superstorm Sandy, New York City has become a prominent city in the example of climate adaptation. The city will be investing in a $19.5 billion plan to ensure that a storm of that caliber does not so adversely affect the city again.
Other cities, such as London, Rotterdam, and Quito have also begun to tackle their respective concerns. However, if cities don't act fast or efficiently enough, infrastructure damage could be staggering. To combat the harming of the planet, the German government has begun to incentivize the use of solar panels. Those that use non-renewable resources are then taxed, with those profits going towards the solar industry. Some have suggested that this may lead to citizens linking climate change with government intrusion. At this point, it seems like many places are starting to disregard that concern in favor of the planet.
1 Coping Costs
With a potential $100 billion dollars being spent each year on climate adaptation, many other key areas of the budget could see neglect. However, if this isn't done, the world's GDP could shrink by up to two percent if the global temperature rises by the widely-predicted 2.5 degrees celcius (4.5 farenheit). This puts the world in a tight predicament. The need for adaptation is quite obvious, but neglecting other facets of the world could lead to declines in other key areas. Many of our past actions have brought us to a “damned if you do, damned if you don't” sort of situation.
Another facet of coping costs would be the need for once-natural events to be paid for. Irrigation could be a prime example, as fertile lands shift towards an arid future. As stated previously, what makes this even worse is that the areas that may be most in need are the ones projected to suffer most. This, once again, will lead to the issue of figuring out how much the global community can support all of its people, and not just the geographically privileged.