16 Dec 2022

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The Economics of Climate Change

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Academic level: College

Paper type: Research Paper

Words: 2339

Pages: 8

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The discussion of climate change makes a big difference in 2016 globally and specifically in the USA. Whereas weather-based disasters have been common in different areas of the nation in the past, catastrophes have been experienced across the nation contemporaneously (Dickinson, 2016). These different disasters have resulted in major loss of life, damage to property, and economic disruption and setbacks. The Northern parts of the USA received El Nino rains, which were both destructive and disruptive to economic and general life activities (Dickinson, 2016). The Southern side was affected by hurricanes, thunderstorms, and flash floods, which resulted in the loss of life and great damage to personal property and infrastructure. It is, however, the Eastern side of the USA that was mainly affected by droughts that resulted in the double tragedy of great famine and catastrophic forest fires (Dickinson, 2016). Scientists and weather experts cannot agree on whether this is a natural phenomenon or a result of human activities, mainly economic on weather patterns (Barker, 2008). This research paper looks at the scientific, economic and political perspective of weather changes in the near and distant future from the perspective of playing a neutral advisory role to America and the world. There are four main closely related and interdependent factors to consider in climate change projection. These are the climatic averages as determined by major weather patterns (Peacock, 2012: US EPA, 2016). These major weather patterns include projected temperatures, projected precipitation, and projected seasonality, which refer to changes in weather sequences (Peacock, 2012). The spatial projected temperature change above was published by The United States Environmental Protection Agency (EPA), an arm of the US federal government tasked with environmental protection and preservation. The climate is one of the major bearing factors in the environment hence the interest in EPA on environmental matters. The projections are calculated for both higher and lower emission scenarios of greenhouse gases. The temperature in 2025 is estimated to be around 1.12 0 C higher than the current amount and by 2050, this will have risen to 1.75 0 C higher than it is now. Finally, by 2100 the average temperature increase in the USA will stand at 2 0 C in the best-case scenario and 6 0 C at the worst-case scenario higher than the current trends (US EPA, 2016). It is worthy of notice as shown in the diagram above that some sections of the nation will be affected much more than others. The totality of the foregoing reflects a major transformation in seasonality (US EPA, 2016). 

Sea level changes 

Sea level rise is a greater variable compared to other effects of climate change as it entails both climatic and geological impacts (US EPA, 2016). With regard to climate, an increase in temperature will cause the melting of glaciers thus increasing sea volume and by extension sea level. However, the land level towards the sea may also rise or pitch depending on geological activities under the earth (US EPA, 2016). Considering the two factors, local rise in sea levels by 2100 is estimated at 2.3 feet higher in New York; 2.9 feet at Hampton Roads, Virginia; 3.5 feet at Galveston, Texas; and 1 foot around Neah Bay, Washington on the West Coast (US EPA, 2016). The average estimated general rise of the sea itself is estimated at less than one foot in 2025, almost 2 feet in 2050, and approximately 4 feet in 2100 (US EPA, 2016). The difference between the location figures above and the general sea level rise emanate from geological activities. 

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Impact on water and food resources 

With regard to water and food, there are several bearing factors that make predictions complicated (Peacock, 2012). The first regards water, which is determined by the amounts of precipitations, evaporation, and groundwater flows (Peacock, 2012; Irvine et al., 2016). These factors greatly determine the amount of freshwater naturally available in a given area. It becomes more complicated when it comes to food production as a consequence of water availability (Irvine et al., 2016). From an extremely mundane approach, the availability of water and food production has a direct proportion. Lack of water creates droughts, which may lead to famines and wildfires (Barker, 2008). The outbreak of these effects of water deficit reduces food production. Similarly, excess water may pose potential negative impacts on food production through flooding, storm, or heavy snowfalls (Irvine et al., 2016). Finally, water use and food production are relative to the rate of consumption. From the current approximation of 335 million people, America is estimated to have 344 million by 2025, 388 million by 2050, and 450 million by 2100 (Peacock, 2012). North America will experience an increase in precipitation through the 21st century. Average rainfall in the range of N 5 500 and N 5 1000 will increase gradually with about five more days per year in 2025, seven more days per year in 2050, and ten more days in 2100 (Peacock, 2012). This implies that the high population expected during these years will experience a food deficit (Barker, 2008). 

Emissions from fossil fuels 

Fossil fuels are still a major source of energy in the world especially in the USA today. The majority of transport is run on fossil fuel with electricity production and industrial use making substantial contributions (US EPA, 2016). Emission projections vary on how regulation will be through the 21 st century as shown in the graph above. Modest estimations however place emissions in 2025 at 550 parts per million carbon dioxide equivalent (parts). This will have increased to 600 parts in 2050 and 750 parts in 2100 (US EPA, 2016). The minimum projection at 2100 is 400 parts with the maximum being 1300 ppm (US EPA, 2016). Economics is a social science that deals with issues relating to the production, distribution, exchange, and use of goods and services by the various agents pertinent to a society or a geographical area (Burke, Hsiang, & Miguel, 2015). The correlation between climate change and economics is twofold and interdependent. Climate change affects the economy and at the same time, economic activities are a major bearing factor on climate change (Burke, Hsiang, & Miguel, 2015). There has been a wide-ranging debate on several levels with regard to the correlation between economics and climate change and what ought to be done to create harmony between the two. The major areas of focus include the following. 

Population 

The most ordinary definition of the population is all the individuals found in a particular geographical area (Burke, Hsiang, & Miguel, 2015). This can be as large as the globe and as small as a neighborhood. As indicated earlier, the American population will grow to the tune of 344 million by 2025, 388 million by 2050, and 450 million by 2100. The expanding population has several bearing factors on the economic argument relating to climate change. It is the increase in population that resulted in the advent of industrialization and urbanization (Burke, Hsiang, & Miguel, 2015). These two concepts continue to increase to date and are projected to keep growing through 2100. Urbanization and the advent of cities have been found to increase the general global temperature. Further, bringing so many people together creates a higher need for power, transport facilities, water, and sewerage amenities (Burke, Hsiang, & Miguel, 2015). This exponentially increases land use, water, and air pollution; factors that have been found to adversely impact climate, resulting in negative change. Secondly, to serve the large population, it has become necessary to increase the industrial capacity of industries in the nation, a fact that exponentially increases pollution as aforesaid. The United Nations places the global population at 7.3 billion currently which is estimated to rise to 8.5 billion in 2030, 9.7 billion in 2050, and 11.2 billion in 2100 (UN, 2010). Many of these individuals are in the developing world and bear the brunt of climate change as their economies are not equipped to handle the current and projected changes. The American population amounts to approximately 5% of the global population yet it is the second highest emitter of greenhouse gasses in the globe. The nation has a social contract with the other 95% to protect and preserve the environment for them currently and in the future. Gross domestic product (GDP) is the measure, from a pecuniary perspective of all the final goods and services produced by a nation per unit period; either quarterly or annually (Burke, Hsiang, & Miguel, 2015). It would be appropriate to consider GDP as the overall health of the economy of a nation generally and particularly the nation’s populace. According to economic experts, the effects of climate change will adversely affect the GDPs of all nations on earth (Burke, Hsiang, & Miguel, 2015). From a global perspective, climate change will lead to an approximately 4% decrease in global GDP by 2025, a 10% decrease in 2050, and an immense 25% decrease in 2100 (Burke, Hsiang, & Miguel, 2015). The GDP projected impact on the US GDP is as depicted in the graph below. The changes are expected to be a negligible reduction by 2015, a decrease of over 5% by 2050, and a decrease of about 35% by 2100 (Burke, Hsiang, & Miguel, 2015). The interim effects of climate change compared to the US GDP with the world create the impression that the nation has the capacity to withstand the impact of climate change. Inevitably, however, in the long run, climate change will affect the US GDP even more than the global average (Burke, Hsiang, & Miguel, 2015). The extenuation of climate change and its kindred adverse consequences is pertinent to the US GDP. 

Economic opportunities 

Economic opportunities refer to the capacity of individual members of a population to achieve a better future from an economic perspective. This entails getting better jobs, businesses flourishing and having a higher purchasing capacity. 

Among the best instruments for measuring economic opportunities is the growth rate of per capita GDP (Burke, Hsiang, & Miguel, 2015). This reflected in the middle graph above and from a general overview is catastrophic in nature. By 2025, with or without climate change, the per capita GDP growth rate will be reducing (Burke, Hsiang, & Miguel, 2015). Growth rate estimates with climate change will be at 1.5% and without climate change is about 1.7% (Burke, Hsiang, & Miguel, 2015). By 2050, climate change will have a higher impact on growth rates with climate change being at 0.7 percent, yet if climate change is properly mitigated, this would have been 1.3%. By 2100, factoring climate change brings growth rates down to 0.3% yet without climate change it would have been 1.6% (Burke, Hsiang, & Miguel, 2015). This means that climate change will have a devastating effect on economic opportunities. 

Costs versus Benefits 

At its zenith towards 2100, climate change will be costing America 1.8% of its GDP estimated at 1.9 trillion dollars annually (Fankhauser, 2013). This ought to be the greatest determining factor in the debate with regard to climate change issues with the main question being whether or not the sacrifices necessary to curb climate change are worth the benefits (Fankhauser, 2013). From a purely economic perspective without political inferences, the damages to the economy that would result from climate change make whatever cost that the nation would need to pay to extenuate climate change to be viable (Fankhauser, 2013). Further, the changes that are necessary are not crippling to the economy, most of them involve the most efficient use of energy and utilization of natural energy which is already available in the world. Indeed, albeit the expenses involved may be steep in the interim, in the long run, the economy will benefit from the changes made over and above extenuating climate change. The costs of limiting climate change will be the amount it takes to establish greener sources of energy and reduce the use of fossil fuels (Fankhauser, 2013). This also includes the development of cleaner use of fossil fuel in areas where it cannot be avoided. The benefits include the economic benefits of reducing climate change. Further, there is the secondary benefit of the perpetual use of cleaner, thus cheaper energy once the infrastructure is in place (Fankhauser, 2013). 

The Politics of Climate Change 

It would be correct to argue that climate change lost the just concluded presidential elections pitting Hillary Clinton and Donald Trump. Clinton had made commitments to climate change and assured climate change campaigners that in her presidency, she will take steps to ensure its extenuation (Dickinson, 2016). President-elect Trump, on the other hand, is on record as having called global warming a hoax used by purveyors for financial gain (Dickinson, 2016). Trump is also reported to have promised to get the USA out of the Paris Climate Agreement and roll back instruments of fighting climate change. This includes the Clean Power Plan which is poised toward the reduction of greenhouse gasses (Dickinson, 2016). Among the main organs of government that take the forefront in research on climate change is the National Aeronautics and Space Administration (NASA) and Trump is reported to have indicated an intention of curtailing any funds towards that end. The Democrats, who form a majority in both parties are for climate change programs while the GOP, which has control of both houses and the White House is against them (Funk & Kennedy, 2016). Climate change extenuation programs in America are under siege if what the president-elect is to go by. From the point of view of climate change in the USA, there are two main general perspectives of politics. The first is the administrative aspect which deals with the enactment and implementation of laws and the development of policies. It entails the federal government through the presidency, Congress, state governments, and the Supreme Court (Sachs, 2012. The second aspect involves the parallel but more powerful political power vested in the American corporate sector. Sachs (2012) defines the American form of governance as a corporatocracy where the most powerful political force lies in the corporate sector. This makes corporate America dominant in political issues that bear on the economy such as climate change over and above any government. Unfortunately, after the just concluded presidential elections, the corporate sector took over the white house when Trump was elected president. This has eliminated the capacity of the government to check the excesses of the corporate sector to extenuate climate change. It is, therefore, left to the international community to apply economic pressure on the two main political organs towards better policies and laws with regard to climate change (Funk & Kennedy, 2016). 

Conclusion 

Evidence of climate change has been observed in various parts of the world with the US experiencing near-devastating impacts. Mitigation and resilience need to be enhanced as the most important question are what is to be done about the recent changes in weather patterns. This is the essence of the climate change movement and the subject of the global climate change debate. The arguments usually take three main perspectives. The first is the scientific perspective that deals with the actual weather patterns, their trends, the changes thereto, and their causes as well as projections for the future. The second is the economic perspective that seeks to balance mitigating climate change by improving the level of human interference with the weather. This is balanced with trying to minimize the capacity to debilitate or adversely affect economic processes. Finally, there is the political perspective which regards laws, policies, and governmental directives and positions with regard to the climate change debate and the way forward with regard to the same. From the totality of the foregoing, climate change is a major threat to the American economy from a micro and macroeconomic perspective. There is, however, a need for political will and concerted efforts to combat it. 

References 

Barker, T., Scrieciu, Ş., & Taylor, D. (2008). Climate change, social justice and development.  Development51 (3), 317-324. 

Irvine, D., Kurylyk, B., Cartwright, I., Bonham, M., Post, V., Banks, E., & Simmons, C. (2016). Groundwater flow estimation using temperature-depth profiles in a complex environment and a changing climate.  The Science of the total environment. 574, 272–281. 

Peacock, S. (2012). Projected Twenty-First-Century changes in temperature, Precipitation, and snow cover over North America in CCSM4.  Journal of Climate25 (13), 4405–4429. doi:10.1175/jcli-d-11-00214.1 

US Environmental Protection Agency. (2016). Future of climate change. Retrieved from https://www.epa.gov/climate-change-science/future-climate-change 

Burke, M., Hsiang, S., & Miguel, T. (2015). Climate change and economic production by country. Retrieved from https://web.stanford.edu/~mburke/climate/index.html 

Fankhauser, S. (2013).  Valuing climate change: the economics of the greenhouse. London: Routledge. 

United Nations department of economic and social affairs. (2010). World population projected to reach 9.7 billion by 2050. Retrieved from http://www.un.org/en/development/desa/news/population/2015-report.html 

Dickinson, T. (2016). Summer of hell and high water shows climate change is here. Rolling Stone. Retrieved http://www.rollingstone.com/politics/features/summer-of-hell-and-high-water-shows-climate-change-is-here-w441345 

Funk, C., & Kennedy, B. (2016). The politics of climate. Retrieved from http://www.pewinternet.org/2016/10/04/the-politics-of-climate/ 

Sachs, J. (2012). A price of Civilization.  Science335 (6073), 1146–1146. doi:10.1126/science.335.6073.1146-a. 

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StudyBounty. (2023, September 16). The Economics of Climate Change.
https://studybounty.com/the-economics-of-climate-change-research-paper

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