Economic Concerns

One of the biggest unknowns about global warming, in fact, is what effect it will have on the world economy. Mitigating greenhouse emissions, many people fear, will add to the normal costs of doing business and slow the economies of many nations around the world. In addition, countries that are hit with the results of rising temperatures— such as agricultural declines, food and water shortages, rising rates of disease, or disasters caused by floods, fires, or droughts—will face other significant economic costs. These economic blows may be especially difficult for developing or newly emerging economies, which have lately helped improve the world economy.

In 2006 Gordon Brown, (left); Nicholas Stern, a former chief economist and vice president of the World Bank; and former British prime minister Tony Blair discuss Stern's report on the economics of climate change.

On the other hand, not doing anything to stop global warming may result in the destruction of the very resources on which the economy, and human life, depend—a scenario that could lead to even lower economic growth or even a worldwide recession or depression. In 2006, for example, Nicholas Stern, former chief economist and vice president of the World Bank (an international organization that provides loans and economic assistance to developing countries), prepared a report for the British government on this issue. The main prediction of the report was that if nothing is done to mitigate global warming, a major worldwide depression could occur that could lower the global economic output, or gross domestic product, by 20 percent. The widely cited report concludes, "Our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century."50 Although the Stern report has been criticized by some economists as too pessimistic, other economists praised it for providing a careful and realistic picture of the potential economic effects of climate change.

Even in the United States, economists say, the costs of unchecked climate change will be staggering. In 2007 a study by University of Maryland researcher Matthias Ruth found that climate impacts will be widespread, affecting various sectors of the economy—such as rising water costs for agriculture; added infrastructure costs for building and maintaining water and sewer facitilies; increased energy costs for more summer cooling; higher health-care bills; and repairing property damage caused by storms, fires, and rising seas. As Ruth explained, "Climate change will affect every American economically in significant, dramatic ways, and the longer it takes to respond, the greater the damage and the higher the costs."51

The most hopeful view, however, is that a prompt and effective global response to climate change could actually stimulate the world economy. The IPCC's 2007 report, for example, concludes that governments could slow and then reduce global emissions of greenhouse gases over the next several decades

Was this article helpful?

0 0
Solar Panel Basics

Solar Panel Basics

Global warming is a huge problem which will significantly affect every country in the world. Many people all over the world are trying to do whatever they can to help combat the effects of global warming. One of the ways that people can fight global warming is to reduce their dependence on non-renewable energy sources like oil and petroleum based products.

Get My Free Ebook

Post a comment