http://www.economist.com/news/finance-and-economics/21594252-economists-are-getting-grips-impact-climate-change-weather
The article from the Economist talks about the impact that the polar vortex had on the American economy and how weather phenomena in general pose a risk to the economy in general. Approximately $3 billion was lost in productivity due to the Polar Vortex and in only a weeks time. The author cites numerous studies done around the world that measure the economic impact of weather. The most critical results overall are that heat is detrimental to productivity above approximately 30 degrees Celsius and that weather disasters are made worse by unpredictability.
Overall I think there are a couple big takeaways from the article. Global Warming as a whole presents 2 problems. The first is the steady rise in average temperature, which facilitates heat spikes that kill productivity. The second and much more serious problem is the increased volatility of weather patterns and unpredictability of very adverse weather conditions. Given the amount of money lost in the United States to natural disasters on a yearly basis (approx $17 Billion*) its easy to see that over the next 100 years if weather patters become more volatile and violent as expected than the cost in lost productivity could be in the many trillions, let alone the cost of physical damage.
I think this is significant because when taking into consideration the cost of pollution reduction and carbon reducing technologies, taking into account the potential costs of doing nothing provides a much more accurate measure of how much we should be prepared to spend to avoid such an eventuality. That's just me however, what do you all think? (Obviously this is a complex issue because the US alone can't combat global warming, though it can make a massive, massive difference)
*http://www.preventionweb.net/english/countries/statistics/?cid=185
It is a difficult situation as the US cannot end world pollution and other contributors to global warming alone, but I do believe as a large, developed country, the United States would make a huge difference (like you said), to the world if policies were put in place. The problem is down to how much is the true opportunity cost for this though. Is it worth putting in new policies to salvage that productivity, or would we be using more resources than what we would get out of it? Another idea would be to increase the technology we have in order to be able to withstand the dangerous weather. While this is easier said than done, it may be better to make one huge payment that lasts for many years. Once again, this is easier said than done because we don't know how much worse the weather could get in the next 5-10 years, and we may not be able to prepare for that.
ReplyDeleteOverall, I agree with you in the sense that we need to figure out exactly how much doing nothing would cost us and how much doing something would cost the US. Also, another thing to add on, I think the US (since it is so large) should discuss this matter with other countries, as they cannot truly deal with global warming by themselves.
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ReplyDeleteUnfortunately even though Global Warming is an obvious risk towards the entire Global Economy, many undeveloped countries will continue to do whatever they want with toxic waste that will continue to slowly destroy our mother earth. Thankfully G8 nations have a desire to demonstrate leadership in addressing climate change and assisting developing nations to meet the challenges of adaptation. I agree with the comment above stating that the US cannot go into this situation alone. Thankfully several science institutes promised to work with governments to help develop and implement the national and international response to the challenge of climate change. Several of these science agencies come from the following countries: Brazil, Canada, China, France, Germany, India, Italy, Japan, Russia, United Kingdom, and lastly the United States. Even though progress seems slow in bettering waste control throughout the world, it is improving through private science agencies.
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ReplyDeleteAs we all might know, in recent years, many developed countries have out sourced their manufacturing to relatively poor developing nations. In other words they have outsourced their carbon emission to these countries. At a global level even if developed countries try and contain their pollution, poorer countries will not be able to afford or implement policies being discussed in these world forums. As long as there is more production worldwide, the earth's carbon footprint will increase. Our best bet would be to delay the process but practically we have not reached a point where means of actually using renewable energy are cheap enough to be used at a large scale.
ReplyDeleteOur worlds changing climate has been a topic of hot discussion over the past decade and evidence illustrated in this article relating climate change to a country’s economic status shows that it is a pertinent issue in todays world. The affect of a 1°C increase in temperature reduces income per head by 1.4% in poor countries is substantial. Research showing how a 1°C increase also decreases world output by 8.5% and each rise 1°C between 22°C and 29°C cut labor productivity by 1.8% is shocking. This information is important to take into account for the future in both the long and short run. If temperatures continue to rise over time country’s will have to adapt to the change of climate in order to sustain GDP in the long run. It is important to look into the affects of radical climate change in the short run as well. Recently the east coast of the United States has suffered a severe cold front and consumers and producers must keep this in mind. The article states how “The ‘polar vortex’ that brought freezing weather to North America chipped roughly $3 billion off American output in a week”.
ReplyDeleteIn the new age of technology consumers have the opportunity to work from and make purchases of just about anything online without having to leave the comfort of their own home, however there is still a reliance on offline consumption. It would be interesting to look into the industries that are most affected by climate change and if this has changed over time.
More information on this subject:
ReplyDeleteClimate change and the V-word
http://www.ft.com/cms/s/2/cbae70bc-83c2-11e3-86c9-00144feab7de.html#axzz2rO9evA5J
The correlation between heat and growth really surprised me. I know that weather conditions have an impact on the economy, but I didn't realize how much rising temperatures make a difference in the statistics- especially in the longer run effect. I agree that this will be an issue that the United States won't be able to combat alone. Policies and additional research will be critical to understand this issue; however I think that this will not be a problem that one policy will fix, it will take different policies depending on the situation and trying to implement solutions with the current environment.
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