Effects on Economy

1. Damage to property and infrastructure

Global Warming can cause damage to property and infrastructure which would result in losses incurred to companies and the government. Natural occurrences brought upon by Global Warming such as ‘Sea-level rises, floods, droughts, wildfires, and extreme storms’ require extensive repairs of essential infrastructures such as railways, homes, bridges, airport runways, power lines, dams, and seawalls (Armdt, Baringer, & Johnson, 2009). Such damage in infrastructure also results in intangible losses as productivity is also affected. The economy would be affected indirectly as shares of air freight companies/airlines/tourism will fall rapidly, leading to a crash in the stock market and jobs will be lost, leading to a vicious cycle.

Retrieved from : http://blogs.ft.com/photo-diary/2013/06/forest-fires-continue/
Retrieved from : http://blogs.ft.com/photo-diary/2013/06/forest-fires-continue/

2. Productivity & Coping Costs

Climate Change in the long term, can result in disruptions in daily life can translate to lost work and school days. Furthermore, other aspects of the economy can be affected too (e.g. trade, transportation, agriculture, fisheries, energy production, and tourism). Productivity is also affected when the air quality becomes poor and workers in various sectors fall ill, which results in medical leave. This loss in productivity is passed on to companies who have to sustain a team of fewer workers to complete jobs and hospitals/clinics have to cope with a surge in patient traffic resulting in lesser quality of healthcare for all patients.

Coping costs are also incurred when societies are searching for appropriate ways to prepare for and cope with some climate effects (e.g. flooding). Monetary resources are needed to build new infrastructure to cope with such effects.

3. Loss in Tourism

As mentioned earlier, Global Warming causes the loss of biodiversity which would adversely affect the tourism sector. For instance if corals were to be bleached and die out, the tourism for countries who offer snorkeling/diving would suffer heavy losses as tourists would not want to patronize their companies anymore.

Likewise if beautiful nature sites go through irreversible damage from climate change, the country’s tourism sector will suffer losses as a result too. Ultimately, tourists want to view ‘beautiful nature sights’ and not ‘damaged or diseased animals or plants’. Furthermore, climate change may lead to damaged airport runways which affects the aviation industry and indirectly the tourism industry as individuals will be unable to travel.

Read more on how Global Warming can affect tourism


 

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