Climate Change's impact on the economy, health & world order

Key Takeways

1. Climate Change is real and continues to cause sea levels to rise, temperatures to increase & much more.

2. The effects of climate change go beyond "weather" and span to economic, health & geopolitical stability

3. By implementing aggressive climate action we can significantly limit global warming

   
   

David Wallace-Wells’ The Uninhabitable Earth: Life After Warming offers one of the most harrowing accounts of what the future could look like if we fail to address climate change. The book, known for its vivid and urgent prose, outlines the potential consequences of global warming that go far beyond rising temperatures. It paints a picture of a world that could become increasingly uninhabitable, with dire implications for humanity and the planet.

In this blog, we’ll explore some of the key points from Wallace-Wells’ book, highlight recent statistics that underscore the urgency of the climate crisis, and discuss recent news that reinforces the book’s message.

Let's start with climate change

Global Temperature Rise

According to NASA, the Earth’s average surface temperature in 2023 was about 1.2°C (2.2°F) above pre-industrial levels. The last decade has been the warmest on record, with 2023 setting new records for high temperatures. In July 2023, Southern Europe experienced unprecedented heatwaves, with temperatures soaring above 45°C (113°F) in parts of Italy, Greece, and Spain. These extreme temperatures led to widespread health crises, with hospitals overwhelmed by heatstroke cases. The heatwaves also fueled wildfires across the region, destroying homes and livelihoods. 2024 looks to be even warmer!

Carbon Dioxide Levels

In May 2023, atmospheric carbon dioxide levels reached 419 parts per million (ppm), the highest in human history. This is a significant increase from the pre-industrial level of about 280 ppm.

Sea Level Rise

Global sea levels have risen by about 8-9 inches (21-24 cm) since 1880, with the rate of increase accelerating in recent decades. The Intergovernmental Panel on Climate Change (IPCC) projects that sea levels could rise by an additional 1 to 4 feet (0.3 to 1.2 meters) by 2100 if current trends continue.

In August 2023, a study revealed that Greenland’s ice sheet is melting at a faster rate than previously thought. The meltwater from Greenland alone has already contributed to 10-15% of global sea level rise. If the entire ice sheet were to melt, it could raise sea levels by more than 20 feet, inundating coastal cities around the world.

Extreme Weather Events

The frequency and severity of extreme weather events have increased. For example, in 2023 alone, the U.S. experienced over 20 separate billion-dollar weather and climate disasters, including hurricanes, wildfires, and floods. These events are not only more common but also more intense, causing greater damage and loss of life.

Climate change is not just an environmental issue; it has far-reaching implications for the global economy, natural resources, geopolitical stability, and public health. Here’s an overview of the potential impacts in these areas:

The impact of climate changes goes beyond the weather

Climate change is not just an environmental issue; it has far-reaching implications for the global economy, natural resources, geopolitical stability, and public health. Here’s an overview of the potential impacts in these areas:

Economy

Recent studies estimate that a 1°C rise in global temperatures could reduce global GDP by approximately 12%. This damage is six times larger than previous estimates, highlighting the severe economic consequences of climate change. By 2050, climate change could reduce global GDP by up to 18% if no mitigating actions are taken. By 2100, rising sea levels could threaten assets worth $14.2 trillion globally, with significant implications for coastal infrastructure and economies.

1. Increased frequency & severity of natural disasters

Climate change is leading to more frequent and severe natural disasters such as hurricanes, floods, and wildfires. These events cause extensive damage to infrastructure, disrupt supply chains, and lead to significant economic losses. The cost of rebuilding and disaster recovery can strain public finances, especially in developing countries.

In 2021 alone, natural disasters driven by climate change cost the global economy over $343 billion, with the majority of these costs resulting from extreme weather events.

As the frequency of climate-related disasters increases, the insurance industry faces higher claims, which can lead to rising premiums or even the withdrawal of coverage in high-risk areas. This can further exacerbate economic instability.

2. Impact on Agriculture and Food Security

Climate change can reduce agricultural productivity due to changes in temperature, precipitation patterns, and the increased frequency of extreme weather events. This can lead to food shortages, higher prices, and increased food insecurity, particularly in regions that are already vulnerable. Extreme weather events can disrupt global supply chains, affecting the availability of goods and leading to price volatility.

Climate change could decrease global agricultural productivity by up to 17% by 2050, with developing countries being the most affected.

3. Loss of Productivity & Heat Stress

Rising temperatures can reduce labor productivity, particularly in sectors like agriculture, construction, and manufacturing. In regions where temperatures are already high, further increases can make it difficult for workers to function effectively, leading to economic losses.

The increase in climate-related health issues, such as respiratory diseases, heat-related illnesses, and the spread of vector-borne diseases, can lead to higher healthcare costs and loss of workdays, further impacting the economy.

4. Widening Gap Between Rich & Poor

The economic impacts of climate change are often more severe for poorer communities and countries that lack the resources to adapt. This can exacerbate existing inequalities, both within and between nations, leading to increased social and economic instability.

Rising temperatures are projected to increase global energy demand, particularly for cooling, leading to an estimated 25% rise in energy costs by 2050.

Climate change is expected to amplify economic inequality, with the poorest 40% of the world’s population expected to experience the most significant economic losses, potentially doubling the gap between rich and poor countries.

Natural resources

1. Water scarcity, droughts and floods

Climate change is expected to alter precipitation patterns, leading to water scarcity in many regions. This can affect drinking water supplies, agriculture, and industry, leading to competition for this vital resource. Increased frequency of droughts can lead to water shortages, while more intense rainfall can cause flooding, both of which can disrupt access to clean water and agricultural production.

2. Habitat loss and ocean acidification

Rising temperatures, changing precipitation patterns, and extreme weather events can lead to habitat loss for many species. This can reduce biodiversity and disrupt ecosystems that provide essential services, such as pollination, water purification, and carbon sequestration.

Increased CO2 levels are leading to ocean acidification, which affects marine life, particularly organisms with calcium carbonate shells or skeletons, like corals and some shellfish. This can disrupt marine ecosystems and the fishing industry, which many communities rely on for food and income.

3. Deforestation and wildfires

Climate change is increasing the frequency and intensity of wildfires, leading to the loss of forests, which are crucial for carbon sequestration. Deforestation also reduces biodiversity and can contribute to further climate change by releasing stored carbon into the atmosphere.

War & geopolitical stability

NATO’s 2024 Climate Change and Security Impact Assessment highlights that climate change is increasingly impacting military operations and strategic stability. The assessment warns that climate-induced resource scarcity could heighten tensions and trigger conflicts.

1. Competition for food, water and an increase in climate refugees

Scarcity of natural resources like water and arable land can lead to conflicts between countries and within regions. Climate-induced resource scarcity can exacerbate existing tensions, leading to violence and displacement. As regions become uninhabitable due to rising sea levels, extreme weather, or resource depletion, large populations may be forced to migrate. This can lead to tensions and conflicts in receiving areas, as communities struggle to accommodate the influx of people.

2. Arctic geopolitics and failed states

The melting of Arctic ice is opening up new shipping routes and access to untapped natural resources, leading to increased geopolitical competition in the region. Countries with Arctic coastlines, such as Russia, the United States, and Canada, are increasingly vying for control, raising the potential for conflict.

Climate change can exacerbate conditions that lead to state failure, such as poverty, food insecurity, and resource scarcity. Failed states can become breeding grounds for terrorism, organized crime, and other forms of violence, which can spill over into neighboring regions.

Impact on health

1. Heatwaves and increased mortality rates

Climate-related health impacts, such as increased incidence of diseases and heat-related illnesses, could cost the global economy up to $4 trillion by 2030.

Rising global temperatures are leading to more frequent and severe heatwaves, which can cause heatstroke, dehydration, and exacerbate cardiovascular and respiratory diseases. Vulnerable populations, such as the elderly and those with pre-existing health conditions, are particularly at risk. Extreme heat can increase mortality rates, particularly during prolonged heatwaves. In regions without adequate infrastructure or access to cooling, the impact can be devastating.

2. Spread of Infectious Diseases

Climate change is altering the habitats of disease-carrying vectors, such as mosquitoes and ticks, leading to the spread of diseases like malaria, dengue fever, Lyme disease, and Zika virus into new regions. Increased flooding and changes in water quality can lead to the spread of waterborne diseases, such as cholera and other gastrointestinal infections, particularly in regions with poor sanitation infrastructure.

3. Respiratory and Cardiovascular Diseases

Climate change is exacerbating air pollution, which can lead to an increase in respiratory and cardiovascular diseases. Wildfires, which are becoming more frequent due to rising temperatures, also contribute to poor air quality and associated health problems. Changes in climate can affect the prevalence of allergens, such as pollen, leading to an increase in allergic reactions and asthma cases.

4. Mental health, climate anxiety, displacement and trauma

The growing awareness of climate change and its potential impacts is contributing to climate anxiety and stress, particularly among younger generations. This can lead to a range of mental health issues, including depression and anxiety. Communities affected by extreme weather events, loss of livelihoods, or displacement due to climate change are at risk of experiencing trauma, leading to long-term mental health challenges.

A call to action

These statistics underscore the multifaceted impact of climate change, affecting not only the economy and health but also environmental stability and global security. Addressing these challenges requires comprehensive and collaborative action across all sectors.

On a more positive note, there have been significant shifts in global climate policy. In November 2023, the COP28 summit in Dubai saw unprecedented commitments from major economies to phase out fossil fuels and invest in renewable energy. However, as Wallace-Wells would argue, these measures, while promising, may still be too little, too late unless backed by immediate and substantial action.

The cost of inaction on climate change is estimated to be as high as $1.7 trillion per year by 2100, compared to the significantly lower cost of implementing climate mitigation strategies today.

Ways to measure the impact of climate change

1. Economic: Measure the reduction in Gross Domestic Product (GDP) attributable to climate-related factors like natural disasters, reduced agricultural output, and increased energy costs.

2. Health: Monitor the number of deaths caused by climate-related events such as heatwaves, floods, and the spread of vector-borne diseases.

3. Food & Water Security: Measure the availability and access to essential resources like food and water, which can be strained by climate change and lead to conflict.

The choices we make today will shape the world for generations to come. It is up to us to decide whether we will continue down the path of inaction or whether we will rise to the challenge and work towards a more sustainable and equitable future.

By implementing aggressive climate action, such as reducing carbon emissions by 50% by 2030, we can significantly limit global warming and prevent an estimated 2.5 million deaths annually from air pollution-related causes.

The question is not whether we can afford to act, but whether we can afford not to.

Sources: 1. Global GDP Impact: Swiss Re Institute. (2021). 2. Cost of Climate Disasters: Aon. (2022). “Weather, Climate & Catastrophe Insight: 2021 Annual Report.” 3. Agriculture Losses: IFPRI. (2019). “Climate Change and Agriculture: Impact and Adaptation.” International Food Policy Research Institute (IFPRI) 4. Energy Costs: IEA. (2021). “Global Energy Review 2021.” International Energy Agency (IEA) 5. Insurance Costs: Lloyd’s of London. (2018). “Striking the Balance: How Insurers Can Contribute to Climate Resilience.” Lloyd’s 6. Infrastructure Damage: IPCC. (2021). “Climate Change 2021: The Physical Science Basis.” Intergovernmental Panel on Climate Change (IPCC) 7. Employment Impact: ILO. (2019). “Working on a Warmer Planet: The Impact of Heat Stress on Labor Productivity and Decent Work.” International Labour Organization (ILO) 8. Economic Inequality: World Bank. (2020). “Poverty and Shared Prosperity 2020: Reversals of Fortune.” World Bank 9. Health Costs: WHO. (2021). “Climate Change and Health.” World Health Organization (WHO) 10. Cost of Inaction: Stern, N. (2007). “The Economics of Climate Change: The Stern Review.” UK Government