Climate Calamity: Economics as a Catalyst for an Environmental Revolution
Ben Wright, Writer on Science and Technology
October 18, 2018
Undeniably, climate change is damaging our planet. With each passing year, more habitats are destroyed, more ecosystems are fundamentally altered, and more species go extinct. Those who are opposed to policies encouraging sustainability feel that these effects are unimportant, or do not warrant immediate action. However, there is another, more hidden effect of climate change: its financial harm. As policymakers worldwide become aware of this, many hope it will bring a shift in attitudes and promote a call to action.
The natural effects alone of climate change are staggering. Carbon Dioxide levels in the atmosphere are at their highest in 650 000 years, global sea levels have risen by over 20 cm over the last century, and the earth’s average surface temperature has increased by 1°C since the beginning of the industrial revolution. Yet many are still able to turn a blind eye, either by denying climate change’s existence or by arguing that its effects do not pose an immediate threat to them and therefore do not warrant immediate action.
Contrary to the natural effects, the financial impacts of climate change are more nuanced and less direct. With rising sea levels for example, profitable or developed land is lost to the ocean, and more human settlements are placed at risk of flood. Over the course of 15 years from 1996 to 2011, for example, a total area two-thirds the size of Manhattan Island was lost along the Atlantic coast of the United States alone. With land being a valuable asset, this loss of usable land amounts to a financial burden of climate change.
On a more immediate time-scale, a warming globe has increased the frequency and power of tropical storms. These storms are formed when warm equatorial ocean water evaporates and becomes humid air, twisting upwards and forming a cyclone or hurricane. As long as these storms continue to travel over waters above 26.5°C they will continue to grow in size, strength, and wind speed until they reach land. Increasing average air and sea temperatures have increased the likelihood that these storms will grow or form over warm enough water, creating more violent and more frequent storms. In 2017 alone, tropical storms created estimated economic losses of $2.8 trillion US. Even a small percentage wise increase in this number from climate change would amount to an enormous financial loss.
Rising temperatures are also proven to lead to more severe drought, and thereby a reduced crop yield in affected areas. As the atmospheric temperature rises, evapotranspiration (the evaporation of water from soil or plants) increases, eliminating moisture from the ground. In North America, this has already been seen in the California drought of 2011-2015. Over this period, a very stable high pressure weather system sat over California pushing precipitation northward, and without rain to replenish the groundwater, abnormally high temperatures depleted the ground of moisture. In 2015 alone, this cost the agricultural sector $2.2 billion US, and nearly 17 000 farmers lost their jobs.
The list of effects is far too long to name them all, but it includes resource shortages, damage to the fishing industry, and the potential loss of major cities, and the globe is beginning to take notice. Though some countries are more susceptible than others, such as Pacific island nations at risk of complete loss from rising waters, no nation is free from the financial effects of climate change. If global temperature increase continues at its current rate and reaches 3°C by 2100, the American Geophysical Union estimates that the approximate global potential loss resulting from climate change would be $9.3 trillion US, amounting to roughly 3% of global GDP in 2100.
It is clear that something must change. Nations must recognize the danger that climate change now poses not only to their environment but to their economies. In order to make progress, it is clear that a unified global effort is needed to slow or halt climate change. Thus, it is important that even those nations not currently combating climate change join the cause. The financial detriment can provide a rallying point around which those not concerned by the natural effects of climate change can agree to take action. It can also encourage corporations, many of whom are unaffected by environmental damage, to make separate efforts. Recent Nobel Prize winner William Nordhaus won the award for his work incorporating climate into macroeconomic analysis. In his work he demonstrated that the carbon pricing provided benefits to both the environment and economy, thus showing that there are paths forward which consider both.
Until such a transformation in global attitudes occurs, climate change will continue its incessant encroachment on the globe. It will continue to wreak fiscal havoc by dragging land under the sea, producing violent storms, and contributing to droughts. Yet, this economic damage also provides hope that global players who currently ignore the effects of climate change will be forced to take notice and action, and help in the fight against long-term environmental damage. It is unfortunate, but this economic scare is what it may take to save our planet.