The Effect of Global Warming on the Economy

Current Negative Economic Impacts of Global Warming

If it continues unabated, global warming is expected to have major negative impacts on economies at the local, national and global scale. In fact, it has already begun. The International Panel on Climate Change (IPCC) has identified a number of areas where the effects of global warming can already be observed. In parts of Africa, for example, warmer and dryer conditions are leading to shorter growing seasons, which damage crops. For farmers in these regions, global warming may be one cause of reduced productivity and decreasing revenue and food supply.

Future Negative Impacts of Global Warming

The anticipated effects of global warming vary by region, but include increased incidences of extreme weather events. For example, coastal flooding caused by rising sea levels could affect millions of people by the 2080's. These natural disasters could lead to widespread property damage and loss. Society will face the economic burden of providing relief to displaced populations, and costs associated with rebuilding after such disasters strike.
Human health will also be affected by global warming, with resulting health care costs. Those injured in natural disasters caused by global warming will need medical treatment. More frequent heat waves will lead to increased exposure to certain types of air pollution, such as ground level ozone, and place vulnerable populations like people with asthma, children and the elderly at risk. Changes in climate can also lead to the proliferation of diseases like malaria into once unaffected regions.
It is important to note that some of the economic impacts of global warming are specific by region. For example, global warming advocacy groups in the northeastern United States have used the slogan "Save Our Syrup" to highlight the threat global warming poses to the region's maple syrup industry. Similarly, damage to coral reefs could diminish the appeal of certain tropical tourist destinations, as could the threat of major flooding on small islands.
Already, steps are being taken to implement measures designed to mitigate the effects of global warming. The use of technology can help farmers overcome changes in climate, and steps can be taken to control flooding. But these efforts to adapt to the changes caused by global warming come with their own price tags, albeit the costs associated with these measures are considerably lower than the future costs of inaction.
Global warming is expected have the greatest impact on the least developed parts of the world that are home to the vast majority of the world's poor. In places like Africa, global warming is expected to cause increased drought and famine, as well as to increase the spread of potential deadly diseases like dysentery. These societies lack the economic means to adapt to the changes that global warming will bring, and are poorly equipped to deal with the devastation that will result.

Positive Economic Impacts of Global Warming

The threat posed by global warming is sparking what many economists and political leaders hope will be a new technological revolution. For decades, the global economy has been fueled by the availability of cheap fossil fuels like coal and oil. It is now recognized that our reliance on these fuels has come at a price. Greenhouse gas emissions produced by the burning of fossil fuels for energy and transportation have contributed to global warming. This realization has contributed to increased support for cleaner, renewable sources of energy like wind and solar power. Demand for renewable energy and energy efficiency could lead to the creation of new green jobs, and stimulate economic growth.

Resources

• IPCC. Climate Change 2007: Impacts, Adaptation and Vulnerability