How Will Global Warming Effect The Economy Environmental Sciences

Essay add: 20-10-2016, 20:00   /   Views: 30

Global warming is now a reality. Most of the observed increases in the globally averaged temperature since the mid-20th century is very likely due to the increase in greenhouse gas concentrations. According to the 2007 Intergovernmental Panel on Climate Change (IPCC) study, the "warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice and rising global average sea level" [] .

There is a wide range of consequences due to global warming, from the submergence of cities to the spread of various diseases. In this present work, the goal is to analyze the main - and different - impacts that global warming imposes to specific countries and to the world economy as a whole. The idea is to scratch not only on the negative challenges it brings to economic development, but also on the great opportunities it creates to companies and countries worldwide.

Climate Change: "Climate change refers to a change in the state of the climate that can be identified (e.g., by using statistical tests) by changes in the mean and/or the variability of its properties, and that persists for and extended period, typically decades or longer. Climate change may be due to natural internal processes or external forcings, or to persistent anthropogenic changes in the composition of the atmosphere or in land use." [] 

Global Warming: The increase in the average temperature of planet's near-surface air and oceans.

Greenhouse Effect: "Greenhouse gases effectively absorb thermal infrared radiation, emitted by the Earth's surface, by the atmosphere itself due to the same gases, and by clouds. Atmospheric radiation is emitted to all sides, including downward to the Earth's surface. Thus greenhouse gases trap heat within the surface-troposphere system. This is called greenhouse effect. Thermal infrared radiation in the troposphere is strongly coupled to the temperature of the atmosphere at the altitude at which it is emitted. In the troposphere, the temperature generally decreases with height. Effectively infrared radiation emitted to space originated from an altitude with a temperature of, on average, -19°C, in balance with the net incoming solar radiation, whereas the Earth's surface is kept at a much higher temperature of, on average, +14°C. An increase in the concentration of greenhouse gases leads to an increased infrared opacity of the atmosphere, and therefore to an effective radiation into space from a higher altitude at a lower temperature. This causes a radiative forcing that leads to an enhancement of the greenhouse effect, the so-called enhanced greenhouse effect." [] 

Sustainable Development (SD): "(…) a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations. SD integrates the political, social, economic and environmental dimensions." [] 


First of all, a large-scale impact is anticipated. Nowadays everyone has already heard about the large expected sea-level rises resulting from global warming, especially from widespread smelting of Greenland, which would contribute to a sea-level rise of 4-6 meters or more. Antarctic ice sheets imply major changes in coastlines and ecosystems, inundation of low-laying areas. Those shifts will cause the relocating of many populations and economic activities, which will have an enormous cost.

More specifically, in Polar Regions, we can list the enlargement and increased numbers of glacial lakes or the increasing ground instability in permafrost regions and rock avalanches in mountain regions. All these facts create changes in Arctic and Antarctic ecosystems, including those in sea-ice biomes and also predators high in the food chain (e.g. Polar bear).

Global warming reached hydrological systems as well due to increased runoff and earlier spring peak discharge in many glacier- and snow-fed rivers. Furthermore, the warming of lakes and rivers in many regions will have effects on thermal structure and water quality.

As a consequence of these hydrological shifts, marine biological systems are affected. In general, water on earth became 30 % more acidic because of higher concentration of CO2 in the atmosphere, which affects tens of thousands of marine species: There are changes in algal, plankton and fish abundance in high-latitude oceans or increases in algal and zoo plankton abundance in lakes. We can also talk about earlier migrations of fish in rivers. Moreover, the most important issue in this part is the fact that a temperature increase causes the reef's basic partnership between coral animals and algae to break down. With temperature stress, the coral animal ejects the alga and the ecosystems undergo 'beaching events'. The colorful reef essentially goes black and white as attendant diversity and productivity crash.

Aside from global warming's negative effects on the marine biological system, several adverse effects on terrestrial systems are also observed. We can notice earlier timing of spring events, such as leaf-unfolding, bird migration and egg-laying and consequently, longer thermal growing seasons.


Future impacts could be relevant for people and the environment. Indeed, frequently projected impacts are changes in precipitation and other climate variables in addition to temperature, sea level and concentrations of atmospheric carbon dioxide. Lots of experts forecast heavy precipitation events which are likely to increase in frequency and to augment flood risk.

In the course of the century, water supplies stored in glaciers and snow cover are projected to decline, reducing water availability in regions supplied by melt water from major mountain ranges where more than one-sixth of the world population currently lives.

So the magnitude and timing of impacts will vary with the amount of climate changes and the capacity to adapt.


Approximately 25% of plant and animal species are likely to be at increased risk of extinction if increases in global average temperature exceed 1,5-2,5°C. Other projected impacts are major changes in ecosystem structure with predominantly negative consequences for biodiversity, water and food supply.


Costs and benefits of climate change for industry, settlement and society will vary widely by location and scale but net effects will tend to be more negative the larger the change in climate is. The most vulnerable societies are generally those whose economies are closely linked with climate-sensitive resources and those in areas prone to extreme weather events, especially where rapid urbanization is occurring. Poor communities can be especially vulnerable as well, in particular those concentrated in high-risk areas. They tend to have more limited adaptive capacities and are more dependent on climate-sensitive resources.

The social and economic costs of extreme weather events will increase and these increases will be substantial in the areas most directly affected. Unfortunately, global warming impacts will spread from directly affected areas and sectors to other areas and sectors through extensive and complex linkages.


Global warming is going to affect the health of millions of people with low adaptive capacity, causing malnutrition and increasing the frequency of cardio-respiratory diseases due to higher concentration of ground-level ozone. However, critically important factors will be those that directly shape the health of population such as education, health care, public health initiatives and economic development.



Agricultural production, including access to food, in many African countries is projected to be severely compromised by climate variability and change.

First, it will affect food security and worsen malnutrition, which has already reached a high level in the major part of Africa. Local food supplies will be affected by decreasing fisheries resources in large lakes due to rising water temperature and by the fact that the suitable area for agriculture, the length of growing season and yield potential from rain-fed agriculture, particularly along the margins of arid areas, are expected to decrease and could be reduced by up to 50% by 2020. [] 

With regard to economic aspects, the cost of adaptation could amount to 5 - 10 % of Gross Domestic Product GDP due to sea-level rising, among other things. In addition, degradation of coral reefs would have important consequences for tourism. In Nigeria, for example, studies show that 22.6% of the national population lives along the coastal zone, the most vulnerable region of the country. "Most of the economic activities that form the backbone of the national economies are located within the coastal zone. Coastal areas also form the food basket of the region. Offshore and inshore areas, as well as estuaries and lagoons, support industrial fisheries accounting for more than 75%of fishery landings in the region. As populations are displaced and climatic and vegetational belts migrate away from the traditional geographical location, a general disruption in food production is expected to be the outcome." [] 

What is worse is that Africa contributes virtually nothing to the current level of carbon emissions. Present greenhouse gases emissions from Africa are negligible on a global scale since the problem is caused mainly by highly industrialized countries. In fact, the whole continent itself contributes only 3.8% of the greenhouse emissions in the world. [] 


Southeast Asia is said to be one of the regions most vulnerable to climate change due to the high economic activity along its long coastlines and its heavy dependence on agriculture, forestry and other natural resources. According to a study conducted by the Asian Development Bank (ADB), global warming may cause economies in the Southeast Asian region to lose as much as 6.7% of combined gross domestic product (GDP) yearly by 2100, more than twice the global average loss. [] In the Philippines, the Department of Agriculture has projected more than $250,000,000 in damages due to the severe dry spell caused by the El Nino phenomenon. If nothing is done globally to fight climate change, research shows that Southeast Asia could suffer a decline in rice output potential of about 50 percent on average by 2100 against 1990 levels. [] 

Southeast Asia, however, is not the only region severely affected by global warming. In Northern Asia, particularly in China, drought has caused a significant decrease in farm output, thus resulting to a tightened food supply in the market. This decrease in produce has inevitably affected the prices in the market, causing inflation and a surge in the country's consumer price index. Furthermore, rising sea levels all over the world continue to threaten the tourism-dependent-economy of other Asian countries such as the Maldives. Tourism accounts for 28% of the country's GDP and for more than 60% of its foreign exchange. [] If sea levels continue to rise uncontrollably, both the Maldives' economy and its very existence as a nation would inevitably be in grave danger.


Nearly all European regions are anticipated to be negatively affected by some future impacts of global warming and many economic sectors will be as well.

In Southern Europe, we can forecast a decrease of water availability, a decrease of summer tourism or still a decrease of crop productivity among other things. Moreover, one of the impacts we can already observe is the increase of the frequency of wildfires. For example, in the summer of 2003 the south of France (Le Var) has experienced the largest number of wildfires with 40,000 Ha of burned land.

In Central Europe, increase of health risks are anticipated due to heatwaves because countries such as Belgium, Germany or England are used to raining and average cold weather.

In Northern Europe, the ground instability could increase, thus making life in those regions risky. A second negative impact and not the less substantial, is the possible decrease of winter tourism, which is an important source of foreign revenue for Scandinavian regions.


In Latin America, increases in temperature and decreases in salty water are likely to lead to gradual replacement of tropical forests by savanna in Amazonia and so it would create a substantial risk of significant biodiversity loss through species extinction as it is well-known that Amazonia forest stands for the largest and richest forest in the world. In addition, changes in precipitation patterns and disappearance of glaciers are expected to affect water availability for human consumption, agriculture and energy generation.

In Northern America, a decrease of snow pack is expected as well an exacerbated competition for over-allocated water resources. Paradoxically, an extended period of high fire risk could appear in West coast and the lower part of Northern America. In An Inconvenient Truth, Al Gore uses no euphemism to describe the negative impact that Global Warming is having and will continue to have in the world, especially in the US. He cites hurricane Katrina, which completely devastated New Orleans and cause billions of dollars of losses, as an example of extreme conditions that are worsening in terms of intensity and periodicity. Furthermore there's a nasty impact due to dramatically increase wildfires, the intensity of tropical storms increase, cities that currently experience heat waves will increase in number, intensity and duration of the heat waves during of the course of the century.

There is a wide range of effects in the economy of America countries. Some will face more rain, some will lack rain, some will suffer from spreading diseases, some from collapsing crops and etc, but the common bottom line to all of them is that there will be no country spared from the negative impacts of Global Warming.


The fact that Global Warming imposes a huge challenge to human kind, in terms of economy, health and even survival does not mean that it imposes a completely "all bad" situation. Actually it brings on a great deal of opportunities, in a countries framework and in an enterprises context as well. Common sense has that "great crisis brings great opportunities" and in this case it already proves truth.

Companies that have identified the opportunity of implementing a "green idea" to their products and associating its identity with sustainable development are growing on large scale with consumers reputation and, therefore, improving it's branding. Furthermore, due to all the scientific pressure, the people are urging its politicians to take some action on the matter the countries, as well are feeling the need to change. In that sense, considering a global market where countries trades with each other, the countries that adapt to the "green tendencies" and develop resources and technologies to solve the problem are going to face a huge opportunity to export to other countries, because the market has created opportunities to it. The bottom line is that we also have to look to all the positives outcomes that come from a huge drift on the business world worldwide. The subtopics bellow we analyze how these positive outcomes would specifically develop in Europe and in America.


Regarding the case of Scandinavia, global warming could bring benefits by reducing demand for heating and by increasing crop yield and forest growth since usually the major part of Scandinavia has a snowy landscape and for a time longer than half a year.

With regard to the economic aspect, we can analyze the case of Belgium, which is regarded as the center of Europe and is a general reflection of what happens in East Europe. Indeed, when speaking about a positive impact of global warming on Belgian economy, we can highlight the booming market of renewable energy technologies that has been created, which is an alternative for reducing fuel consumption and greenhouse gas emissions then. And the most important technology that has been developed this year is the one of solar panels. Particularly in 2006, panels sales reached a record as panels installing grew by 61 % in one year. Moreover new fiscal advantages should increase the record sales within next years. For example the fiscal deductibility ceiling will be risen from 2.000 to 2.600 € for the investment of solar panels for domestic hot water or electricity production and currently it is calculated that the half of solar system price for a family - approximately - +/-6000 €- is paid off by public authorities. The figures are optimistic for environment as it is said that with this kind of system a household can save 60% of energy consumption for domestic hot water.

In a majority of countries from North Europe the whole building construction industry and housing patterns has been modified since a minimum level of thermal isolation is required for new constructions in order to reduce energy consumption as well. In Belgium near 75% of new constructions are based on the low energy consuming house pattern.

Finally, emission-targets might involve adopting new taxes on activities that generate gases. It is what the European government understood and what made it introduce a single common policy to reduce gas emissions called the "carbon-tax", which is a tax on fossil fuels in proportion to the amount of carbon they emit when burned. It is no need to mention that this tax has impacts on the whole Economy. Actually it is supposed to be a right incentive since a fuel owner is a principal pollution maker. Pigou (1920) pointed out that a person did not have the right incentive to try to resolve a situation that did not directly affect himself. So Pigou's solution to this was a tax on that factory owner equivalent to the cost inflicted on environment thus giving him the appropriate incentives. Yet it requires a deal more complex than Pigou to actually solve the problem perfectly but an appropriate tax would improve the situation in the way that it would encourage conservation and the development of alternative transport modes.


The United States of America has always succeeded due to its vanguard in new technological trends, and after pioneering its development, exports it worldwide and continues to play its role as a high-tech exporter (highly aggregated value on exportations). Although the USA is very criticized for not joining the Kyoto Protocol in 1997 (the USA was the biggest polluter in the world and its denial to join the protocol actually meant the failure of it), there is a growing pressure for a change in the country's policy over the issue, and president Obama has taken as one of his strong presidential slogans the focus on alternative energy resources and a "greenish" approach over the world.

As mentioned, the strong scientific vanguard the USA has developed has shown itself as both a crucial politician and a private companies' issue. In the article The Future of Biofuels - The post-alcohol world [] , the magazine The Economist analyzes many new technologies that American companies are developing that will make possible the usage, with better efficiency, of ethanol as a major green energy resource. Known as "drop-ins", these technologies are lab-made hydrocarbons - molecules chemically much more similar to those that already power planes, trains and automobiles - and the article points out as the good option it represents, once it has significant advantages over ethanol (the current main source of alcohol). The fact that that American companies such as Codexis, Amyris and Gevo (companies mentioned in the article) would pioneer this new market would represent a major global competitive advantage to the United States economy and with that the country could, maybe, change from a "climate evil" as it is seen today towards a "planet's savior".


Brazil is absolutely enjoying a unique situation on the Global Warming dilemma. Known for its vast areas of agricultural lands, the country has always been blessed with its natural resources. In the 70's the country borrowed lots of money (mostly with the FMI) to finance what was called as the "Economic Miracle" and consisted basically in huge public investment in infrastructure projects. The result was that the country grew around 10% per year for a while. However, the petrol wars in the international market (specifically the boom on the price due to the creation of OPEC (Organization of the Petroleum Exporting Countries) that officially created an international cartel that control the commodity's price) crashed the ability of the Brazilian government to pay its recent - an increasing - debt. That was fundamental to Brazil entering the "lost decade" (the 80's), which was mostly characterized by an economic moratorium. The bottom line of this story was that the Brazilian government invested heavily on the development of an alternative fuel option that, by the time the possible technology lead to ethanol (alcohol). This was know as "Projeto Pro-Alcool", or "project pro alcohol" and the government subsidized the production, lending cheap money to farmers, to sugarcane plants be built, to the technology shift necessary on the cars, and etc. The result was that the country, in the 80's, developed an efficient alternative market that was completely "green" and recyclable.

With the heating of the Global Warming discussions that was succeeding in the beginning of the XXI century, the chase of green energies alternatives was crucial for the necessary changes. Scientists spoke about hydrogen cars, electric cars etc., the only viable, efficient and 20 year-old technology was the Brazilian ethanol-moved car industry. The result was that President Luis Inácio Lula da Silva (Brazil president from 2003 to 2010) saw the opportunity of bringing lots of foreign direct investment (FDI) to Brazil that has a huge, and barely explored, ethanol potential. Nicknamed as "biofuel propaganda boy" (picture below, beside George Bush) by the national opposition the President really engaged on bringing investments in the sector and he succeeded: the national production of ethanol boomed (from 2004 to 2008 the production grew almost 80%) [] and was responsible for the increase in the world production in the period (chart below [] .)

The case of Brazil is interesting to illustrate the big opportunities than arises due to a major global economic change such as the referred one. With the world focus on green alternatives and all the contributing elements made Brazil the best option for betting in ethanol, and that's why there was so much attention called to the matter. This represents a great deal to the country's economy because many cities in the interior saw its revenues boom due to the implementation of plants and large plantation areas. The country as a whole is benefiting from it.


Even the most stringent mitigation efforts cannot avoid further impacts in the next few decades, which makes adaptation essential, particularly in addressing near-term impacts. Yet adaptation alone is not expected to cope with all the projected effects of global warming. Hopefully the array of potential adaptive responses avoidable to human societies is very large, ranging from technological to behavioral and policy. Effective adaptation measures are highly dependent on specific, geographical factors as well as political and financial constraints. Indeed, the effectiveness of these efforts is outweighed by a lack of basic information, monitoring systems, building capacities and appropriate political policy.

Adaptation to climate change and especially to global warming is likely to benefit from experience gained in reaction to extreme climate events, particularly by implementing proactive global warming risk management adaptation plans.

To finish, we can add that in fact there is some irony in the description of global warming as problematic since it is not unreasonable to view human history as a struggle to stay warm. Even now, human populations tend to migrate toward warmer areas. It is difficult to believe that warming would not benefit countries like Canada or the Soviet Union, even in the slightest sense. The problem, however, is that global warming is more than just a simple increase in the world's overall temperature. Its effects are indeed far greater and more alarming than that. It affects not only the weather, but the livelihood and more importantly, the very existence of mankind as well. Al Gore once mentioned that we are now "….entering a period of consequences." Global warming is no longer an issue we could easily ignore or neglect. The consequences of our inaction in the past are now clearly affecting our lives. What the world could do now is to continue in its global mitigation efforts while at the same time, adapting to this irreversible change the ignorance of mankind has caused.

Article name: How Will Global Warming Effect The Economy Environmental Sciences essay, research paper, dissertation