Economic impact of climate change is substantial
There is a shift in weather patterns that is causing lakes and rivers to dry up, forest fires, floods and droughts, heat waves, and other natural disasters all at the same time. Call it global warming, climate change or whatever — it is real!
The economic impact of climate change can be divided into two major categories: market and nonmarket costs. Market costs can be put in dollars, and nonmarket costs are not easily put in dollars. Some market costs include: the costs of cooling and repairing buildings as a result of heat waves, storms, floods and other disasters. A damaged ecosystem like a coral reef is an example of a nonmarket cost; it is not something that can be measured or expressed in dollars.
Let’s first consider market costs — mostly measurable in dollars:
Agriculture: Changes in temperature and rainfall impacts crop production. In some areas there will be more or less water and heat, affecting crop and animal yields.
Forestry: Forest fires are devastating entire regions, reducing forestry and animal life and destroying trees which give off oxygen that we need to breathe. Trees reduce stormwater runoff, erosion and pollution in our waterways and may also reduce the effects of flooding. Many species of wildlife and humans depend on trees for habitat, food, protection and clothing. The consequences of climate change in the forestry sector of the economy will vary from place to place, much of this is measurable.
Fisheries: Runoff water, pollution of our waterways, drying up lakes and rivers will all have negative effects on fisheries, coral reefs and much that we depend on. Water is becoming more of a scarce resource. In some regions, the dependence of fisheries on a broader ecosystem such as coral reefs will increase warming and acidification.
Insurance: Due to numerous weather catastrophes, insurance companies are challenged to effectively insure people against climate-related damages. The industry is adapting and paying close attention to the relationship between global warming and more frequent severe weather events. In the future, this will mean higher premiums and a greater cost to the economy.
Public Infrastructure: Global warming and consequent sea level rise will place burdens on the system of roads, pipelines, water supply, water treatment, power transmission lines, etc. that make up the infrastructure of countries. Governments will have to spend more to keep these systems running and this will cause a drag on the economy.
Energy: As the climate changes, we will use more electricity/energy for cooling and heating, which will vary globally. For the U.S., the Environmental Protection Agency estimates that for a 1-degree Celsius rise in temperature, we will use 5-20% more energy for cooling and 3-15% less energy for heating.
Tourism/Recreation: In mountainous areas around the globe, more snowmakers are appearing, as ski resorts try to keep themselves viable for longer snowless seasons. There are vast economic stakes in tourism based on recreation of this type. Also, beach resorts face challenges from rising sea levels.
Next, let's look at nonmarket costs, which are not measurable in dollars:
Human Health: As climate changes there will be a toll on human health and life due to various diseases, other health risks and lost lives.
Ecosystems: Coral reefs and many other marine ecosystems are threatened by warming and acidification; coastal terrestrial ecosystems are threatened by sea level rise; polar ecosystems are threatened by loss of ice and warming. All of these are challenges whose costs to the global economy are nearly impossible to determine.
Freshwater Resources: Melting glaciers and winter snows are diminished, an important source of freshwater will decline; as precipitation patterns change, surface water will decrease and groundwater aquifers will become depleted even faster. These are significant costs which are difficult to measure.
Summing up the costs
Numerous economists and organizations have tried to sum up the costs of global warming, it is estimated to be between 2% and 5% of the global economy as global warming continues. https://www.e-education.psu.edu/earth103/node/717
We will have to wait and see how all this will be impacted by recently passed federal legislation. Whether you believe in global warming or not, climate change is happening, and the more we remain cognizant of this fact and take measures individually (recycling, less waste, conservation) and collectively to mitigate the effects, the better for us and future generations.
Kojo Quartey is president of Monroe County Community College and an economist. He may be reached at kquartey@monroeccc.edu.
This article originally appeared on The Monroe News: Kojo Quartey: Economic impact of climate change is substantial
