The Economic Effects of Climate Change
Climate change is the long-term change in the average weather patterns which have come to define Earth's climate and has produced a broad range of observed effects on human life. This has been an ongoing issue for decades and it does not seem like it is getting resolved anytime in the near future. The effects of climate climate change are quite substantial and are highly detrimental to the quality of one's life in America. The growing problem of climate change negatively impacts the economy of American lives by disrupting agriculture production, damaging business activity, and increasing demand for energy.
Agriculture and climate change are inextricably linked as crop yield and animal health are directly affected by a changing climate. Agriculture is the backbone of American economy and holds immense value in society. Climate change poses a major challenge to U.S. agriculture because of the critical dependence of the agricultural system on climate and because of the vital role agriculture plays in social and economic systems. According to the USDA, over 25 extreme events have occurred in the past 30 years with a total economic loss of about 300 billion dollars. Every event was a clear result of the change of atmospheric weather patterns. The ultimate effect of rising heat depends on each crop’s range of temperature. If the temperature surpasses such a range it will decrease crop productivity leading to the decline of agricultural goods. According to a 2011 National Academy of Sciences report, “For every degree celsius that the global thermostat rises, there will be a 5 to 15 percent decrease in overall crop production.” Any negative alterations to production efficiency will not only lessen the economic gross of farmers, but put the multi-billion dollar industry in jeopardy. Along with the decline of crop cultivation, the livelihood of livestock are also put at risk in clear relation to climate change, ultimately adding to the instability of agriculture revenue in the U.S. The most significant direct impact of climate change on livestock production is derived from heat stress. According to an article published by Feedipedia, an informational resource on animals, “Heat stress results in a significant financial burden to livestock producers through decrease in milk component and milk production, meat production, reproductive efficiency and animal health.” Thus, an increase in temperature will reduce agricultural production and usher in catastrophic economic loss in America. Given the significant amount of dependence crops and livestock have on the rising temperature, it is of huge importance to construct a method to minimize the economic repercussions which erect from the growing climate crisis.
Changes in temperature and the frequency and severity of extreme weather related events will determine how much energy is produced, delivered, and consumed in the United States. Energy production and use is intertwined with many other facets surrounding day to day American life as it is crucial to water consumption, utilization of goods and services, and economic growth. Increases in temperature will likely boost our demand for energy, essentially leading to Americans having to pay thousands of more dollars to live in comfort. According to the article titled, “Climate Impact on Energy'' published by the United States Environmental Protection Agency, “net expenditure in annual heating and cooling could increase by 10% ($26 billion in 1990 dollars) with a 4.5°F warming by the end of the century, and by 22% ($57 billion in 1990 dollars) with a warming of 9.0°F.” Furthermore, climate change is likely to both increase electricity demand for cooling in the summer and decrease natural gas, heating oil, and wood demand for heating in the winter. New infrastructure is imperative to suffice with the spike in demand of energy, particularly throughout heatwaves nationwide. In reference to a big new federal report on the effects of climate changed, the text “Global Warming Could Increase Power Cost Billions” by Ben Geman explains that “by the end of the century, an increase in average annual energy expenditures from increased energy demand under the higher scenario is estimated at $32–$87 billion." Tens of billions of dollars coming out of American pockets annually is a daunting prospect in the evolution of the U.S. economy. Higher energy costs are one of many adverse potential outcomes in a warming world.
The U.S. is facing diverse and consequential economic risks from climate change. The by-products of human-induced climate change consist of but are not limited to rising seas, increased damage from storm surge, more frequent occurrences of extreme heat which all have distinct, measurable impacts on our nation’s current assets and ongoing economic activities. In relation to the negative effects brought about by the changing of climate, a national report published by Risky Business, mentions, “If we continue on our current path, by 2050 between $66 billion and $106 billion worth of existing coastal property will likely be below sea level nationwide, with $238 billion to $507 billion worth of property below sea level by 2100.” The article really amplifies the financial effects of climate change and puts into perspective the very much real possible future of American frugality. The increase in frequency and severity of natural disasters due to climate change lead to damaging losses for insurance companies, banks, and other financial intermediaries. In accordance with changing weather conditions negatively impacting the financial system in America, the article “Climate Change Threatens the Stability of the Financial System” by Gregg Gelzinis and Graham Steele mentions, “From 2016 through 2018, the United States experienced 45 natural disasters that each caused at least $1 billion in losses. Over the same time period, the average annual economic losses from natural disasters totaled about $150 billion.” Moreover, extreme weather conditions hold a great amount of power in the sense of being the underlying factor in determining the economic prosperity nationwide.
We are seeing the consequences of climate change right now on a national scale and if we continue on our current trajectory, many sectors of the U.S. face the unequivocal dire economic ramifications of climate change. The weather is affecting American economy by impacting both supply and demand for services of a particular industry. Not only does climate change disrupt agricultural distribution, but it adds a financial burden on Americans nationwide via increased demand of energy and asset manageability. However, if we act more urgently to both adapt to the changing of climate and to mitigate future impacts by reducing carbon emissions, we can notably reduce our exposure to the worst economic risks from climate change.