the economic measure of countries is determined by accounting. Industrialized nations tend to use Gross Domestic Product (GDP) as their chief economic indicator to allow for easier comparison with other countries standardized accounting systems. The GDP measures the value of all within-the-coun-try products and services, including production by foreign companies/individuals and excludes overseas income and investments. In comparison, the Gross National Product (GNP) is the total dollar value of all final products and services produced for consumption during a particular time period, including the country's global personal, industrial, and government spending and investments, with allowances factored in for depreciation and indirect business (sales and property) taxes. The GNP includes income from overseas sources that would be figured in the GDP of another country.
Climate change will affect the direct economy of a country through production, services, and resources, and will influence global trade and financial markets. The atmosphere is a global resource; it is not limited to one nation in terms of addressing greenhouse gas emissions, determining the economic consequences of climate change, but must factor in losses experienced by the economies of other countries.
In addition to disrupting weather patterns, with increased frequency of hurricanes and other extreme weather events in determining economic costs and benefits (losses in one nation may be a benefit in another nation with changing agricultural, migration and tourism, energy and heating/cooling). Economic costs must include damage associated with the impact of climate change including loss of land, loss of forested areas, loss of species, loss of water quality and supply, increased healthcare costs from heat, air quality issues, and the spread of tropical diseases. Economic benefits would factor in increased production of technology for wind, solar, and biogas energy production; and increased money flow in the construction sector for building dikes, levees, infrastructure, and buildings in previously uninhabited areas
According to estimates presented by the 2006 Stern Review, climate change could cause a 5 percent reduction in the global GNP, whereas only 1 percent of global GNP would be needed to stabilize green
house gas emissions. In general, economic models predict developing nations would experience greater economic losses (reduced GNP growth) by reducing the use of fossil fuels and substituting more expensive energy sources. A limitation of the economic models is putting a dollar amount on resources with more than a market value that cannot be assessed without difficulty and multiple value judgments of the extent of damage including social, cultural, and ecological values. To estimate these costs, economists use models that show how economic output is produced from inputs such as labor, capital, and resources.
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