The Economic Impact of Climate Change

The climate is the average weather conditions of the atmosphere at a particular location over a long period.

Climate change as given by the United Nations Framework Convention on Climate Change refers to long-term shifts in temperatures and weather patterns. These shifts are generally natural, however, in recent times, human activities have been the main source to drive these changes.

In our day-to-day lives, we can observe how there is a massive impact of climate change. The availability of water, our growing dependency on air conditioners and other devices to keep temperatures "normal", and facing irregular patterns of weather. 

Sadly, the basic functioning of mother nature is disturbed, there is even a shift in the crop growing seasons and crop yields that has muddled the agricultural pattern. Dealing with the everyday turmoil (like fetching water or being reliant on water tanks) of climate change has become a part of our schedule and the ‘new normal’ in a region like New Delhi, the capital of India. 

Climate change has hazardous impacts on various sectors, and thus economy is no exception to this. The wide economic impacts of climate change are the following:

• Health 

There has been an increase in diseases all over the world due to polluted air, and water, and the effects of climate change in general. This utterly increases the cost in the healthcare sector, which further results in productivity loss and poor health, negatively impacting both physical and psychological conditions.

• Infrastructure

Extreme weather conditions like drought, floods, hurricanes, and wildfires cause damage to infrastructure like institutions, bridges, roads, etc. leading to high-cost repairs and replacements. Moreover, there has been an increase in maintenance costs due to frequent weather changes.

• Agriculture

Climate change has significantly changed the patterns of agriculture and reduced crop yields. Furthermore, having a dire impact on livestock increases mortality rates and reduces productivity.

• Energy and Water Supply

Changes in precipitation patterns lead to water scarcity and solutions to deal with energy and water supply require management that further leads to higher costs for basic functioning.

•  Coastal and Insurance costs

Rising sea levels lead to the loss of coastal land and infrastructure, displacing people, causing property damage, and disrupting transportation. Such frequency of natural disasters requires insurance coverage leading to greater financial instability.

Cost of Climate Inaction

The consequences of climate inaction could be severe and will affect every aspect of life on Earth.  This is often taken for granted and potential outcomes of inaction include an increased temperature, a rise in sea level, more extreme weather conditions, biodiversity loss, disruption to agriculture, and instability in all sectors at large.

Mitigation and Effects on Global Trade

Climate change requires meticulous study to take relevant action. Mitigation refers to minimizing the degree of any risk or harm. In climate change, it means reducing extreme heat by cutting it off from the main sources of everyday use. 

Mitigating climate change offers numerous benefits like environmental protection, health improvement of the general public, stimulation of economic growth, security of energy, food, and water, reduced disparities, and long-term sustainability ensuring a green and just future for all upcoming generations.

Inaction on climate change directly harms global trade. It disrupts supply chains due to extreme weather conditions that halt production facilities. In addition, increases operational costs and creates imbalances in trade due to declining productivity. 

Furthermore, there is resource scarcity and displacement that creates unrest in the social and political system of the world too.

Albeit the condition of climate change today cannot be reversed back entirely, progressive efforts and proactively collective action to scrub off the culmination of the aftermath of what we currently experience.

As we progress in this fast-paced world, we need to be conscious of the Earth and its well-being. Having an understanding of climate change by addressing causes and impacts will be overall beneficial and will promote resilience and ensure a sustainable future for all.