Economic Effects of Global Change


Climate change affects the key areas that are known to be economic accelerators such as agriculture, forestry and water resources. The cost of reversing the effects of climate change is too high. Therefore, climate change causes humongous economic losses to the economy. The major causes of climate change are deforestation and the use of fossil fuels. These factors raise the amount of carbon dioxide, a greenhouse gas, in the atmosphere (Oxlade, 2006) which accelerates climate change.

Effects of climate change on the economy

The general health of the citizens has a one to one correspondence with the economic stability, growth and development. Climate change has increased the ability of vectors- disease-carrying insects- to survive under areas that they were never able to (Ruth & Ibarra ran, 2009). Natural disasters caused by flooding, hurricanes, heat waves need billions of dollars to repair. These factors are a health threat to the potential workforce of many states (McMichael & World Health Organization, 2003).

The unpredictable weather patterns experienced in most parts of the world have led to food shortages. It is approximated that a decline in staple food crops production in sub Saharan Africa results in losses amounting to $2 billion yearly (Oxfam International, 2009). Moreover, elongated summers create a better environment for crop pests to multiply (Doering, 2002), causing low crops yield and hence marginal profits leading to alternatives that have better returns (Hardy, 2003).

The graph below shows the effects of climate change and their total cost in billions of dollars from 1980 t0 2008 across Europe. (European environmental agency, 2011)

Economic policy to mitigate climate change

The government can come up with legislation for the protection and conservation of natural resources and the environment. Preservation of forests through afforestation, re-afforestation and agro-forestry forest should be made a national-wide priority. In addition, research and innovation towards attaining clean energy and adoptability studies are being conducted in an attempt to control the number of greenhouse emissions (Piana, 2009) e.g. The usage of hybrid fuel-efficient (Harris, 2002).In addition, measures are being implemented to improve public transport e.g. using electric train systems, and heavy taxation is done to discourage usage of personal vehicles. This minimizes the number of gasoline users (Proost & Braden, 1998).

Economic policy to promote efficient adaptation

Countries have constructed improved city and town health centers, drainage, and barricades for areas projected to be or already prone to extreme weather conditions like floods, hurricanes, and earthquakes. In addition, the meteorological department has obtained the state of art technologies to detect these natural hazards before they happen. These have helped the country to adapt to the effects of climate change.

Other adaptation measures that have been applied by many countries include laws to assist in the management of natural resources, public training towards natural hazard evacuation, and crop farming of fast-maturing crops.

Challenging features of climate change policy

Climate change is a global phenomenon hence cannot be controlled by a single country. Therefore depending on the interests at the hand of other countries, one country may not succeed alone. In Countries for which oil is the main economic driver and source of energy, neither research towards safe energy nor adaptation measures will be a priority (Harris, 2002). Other countries are too poor to implement the agreed proposal which is a major challenge.


Doering, O. (2002). Effects of climate change and variability on agricultural production systems. New York: Springer

European environmental agency, (2011). Natural disasters in EEA member countries from 1980 to 2009.

Hardy, J. (2003). Climate change: causes, effects, and solutions. West Sussex, England: John Wiley and Sons.

Harris, P., (2002). Climate change and American foreign policy. Hampshire UK: Palgrave Macmillan.

Letcher, M. (2009). Climate change: observed impacts on planet Earth. Oxford, UK: Elsevier.

McMichael, A. & World Health Organization (2003). Climate change and human health: risks and responses. World Health Organization.

Oxfam International (2009). The economic impact of global warming.

Oxlade, C. (2006). Global Warming. Bloomington, USA: Capstone Press.

Piana, V. (2009). Innovative Economic Policies for Climate Change Mitigation. EWI.

Proost, S. & Braden, J. (1998). Climate change, transport and environmental policy: empirical applications in a federal system. Cheltenham, UK: Edward Elgar Publishing.

Ruth, M. & Ibarrarán, M. (2009). Distributional impacts of climate change and disasters: concepts and cases. Cheltenham, UK: Edward Elgar Publishing

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