Climate Change Damaging Global Economy

Global warming is a long-term problem and the impacts of climate change are slowly beginning to take a greater and greater toll on the economy in terms of economic output and growth. Climate change is having a widespread impact on everything from water resources to food production and weather patterns. Sea-level rise, floods, droughts, wildfires, and extreme storms not only cause great damage to property and infrastructure which calls for unforeseen government expenses towards extensive repair, but they also disrupt everyday life which can result in lost productivity. For example, sudden climate changes can mean lost work or school days as well as an impairment to transportation, agriculture, fisheries, and even tourism. To put things into perspectives, a report released by the United Nations Intergovernmental Panel on Climate Change said that a global temperature rise of just 2.5 degrees Celsius above preindustrial levels could lead to global economic losses between 0.2% and 2.0% of income. By the end of the century, it said that climate change could reduce labor productivity by 11% to 27% in humid, tropical areas.

Changing precipitation and melting ice are altering hydrological systems, affecting water resources in terms of quality and quantity. In addition, many marine species have shifted their geographic ranges, seasonal activities, and migration patterns to adapt to these changes. The largest impact, however, has been on crops, with negative impacts outweighing the positive impacts.

There are large differences between and within countries, however, impacts are being felt most heavily in developing countries. In Bangladesh, for instance, climate change has resulted in total losses of about 3-4% of GDP. Sheikh Hasina, Bangladesh’s prime minister, states that “A 1C rise in temperature is associated with 10% productivity loss in farming.” It is the equivalent of losing 4 million tons of food grain, amounting to about $2.5 billion in addition to adding up the damages to property and other losses. It is estimated that by 2030, the cost of climate change and air pollution combined will rise to 3.2% of global GDP with the world’s least developed countries suffering losses up to 11% of their GDP.

For countries at all levels of development, these impacts are consistent with a significant lack of preparedness for current climate variability. Throughout the 21st century, climate-change impacts are projected to slow down economic growth, make poverty reduction more difficult, and prolong existing and create new poverty traps. With losses possibly accelerating with greater warming, a call for swift actions on greenhouse gas emissions is a step in the right direction.