Introduction
Climate has been defined as the weather conditions that prevail in an area. Climate change, therefore, is the change in weather patterns in a given area which is also referred to as global warming. Climate change started to occur in the early 19th century. It was in 1712 when the first known steam engine was invented and it used coal to operate. It was later in 1800 when the population of the world reached 1 billion and one century later, in 1927 where fuel fossil burning caused the carbon dioxide emissions to reach one billion tonnes a year. This paper will discuss the effects of climate change. It will further elucidate on how these results potentially affect businesses. It shall then give suggestions on how companies or economies can adapt to this new environment and achieve growth. A conclusion shall then be provided with regards to the paper.
Discussion
Climate change is mainly caused by greenhouse gasses which are emitted by human activities (Philander, 2012). The human population by 2011 was at seven billion people according to the UN (State of world population 2011, 2011). This population is a key factor in global warming. Emission of the greenhouse gasses is through various ways the main one being combustion of fossil fuels. This is through cars, factories and the production of electricity. During the onset of the industrial revolution, climate change became a consequence that had to be suffered. This is because the primary source of power at the time was coal. In Europe today many countries depend mainly on coal for the production of electricity (Gual i Sole, 2004). This continues to increase the concentration of gases like Carbon Dioxide and Methane.
The effects of global warming vary from the loss of sea ice, intense heat waves and accelerated rise of the sea level. Climate change further causes some natural mega-disasters among them, floods droughts and storms. These have an inextricable link with the economy and they bruise businesses in various ways. In 2008, Sothern China’s Guangdong province experienced the highest rainfall ever recorded. As a result, floods were experienced and 57 lives were lost due to this and 860,000 hectares of cropland were destroyed. In the same year, $25billion was lost to a hurricane Gustav. In 2010 an earthquake hit Haiti a lot of damages worth $8.5 billion were caused. In 2011 a flood in Mississippi USA left damages worth $2billion. It was in the same year that hurricane Irene hit and left a $45 billion total economic impact on top of losses worth $20 billion.
Japan experienced an earth quake and tsunami in March of 2011 caused the loss of $300 billion. Iceland experienced a Volcano that led to the loss of $1.2 billion in air traffic. In 2012 hurricane Sandy caused $50billion worth of economic destruction (The Balance, 2017). The state of California had experienced a prolonged drought for 6years which had affected the underground water reservoirs. This had led to the need for water restructuring for farmers and families. 15,000 jobs were lost due to that and the economic damages for the drought were around $2.7 billion. In 2017 hurricane Irma caused losses worth $100 billion and hurricane Harvey had created damages worth $180 billion (The Balance, 2017). These mega-disasters have been linked to altered weather patterns due to climate change.
Economies are affected in various ways by the climate change (Bloomberg, Paulson and Steyer, 2015). A campaign was launched in Europe to start facing out coal in the continent. The “Beyond coal” campaign was launched by environmentalists who want to lead a total phase-out of coal in EU by 2030. Closure of power plants has already begun and power producers in Europe agreed that no new coal powered power plants shall be constructed as from 2020. The shift from coal power to greener power will be expensive because jobs in the old coal powered plants will be lost, the tax outlet that existed will no longer be there and power restructuring will be more expensive. Air pollution which directly affects climate change continues to escalate and governments are spending more to try and mitigate it. In September 2017 German’s chancellor Angela Merkel doubled funding to $1biilion for cities in the country to help them fight the air pollution (the Guardian, 2017). The fight against any form of pollution is becoming more and more difficult and many resources are being put into it.
Various impacts of global warming on businesses are felt. The main effect is uncertainty in the business environment (Bloomberg, Paulson and Steyer, 2015). Companies will be more unsure of crisis that are yet to arise thus they will need more strategic plans that factor in a very uncertain. The prices of goods and services also change due to climate change. When drought strikes and food produce becomes expensive for purchase from farmers, meals at a local restaurant become affected because prices of the food will increase. As a result, the restaurant may experience a reduction in the numbers of customers affecting the business. In situations where legislations have been passed that corporations are to purchase emission credits according to the amount of emission they produce, profitability is affected. Changing in weather patterns and changing prices may lead to a change in the demand for certain goods. In the case that more cold weather is experienced the market for summer products will go down and vice versa.
Disruption of the economy is almost inevitable because if the prevailing weather conditions persist much damage will occur, this will, in turn, affect the economic growth. The main businesses that are affected by climate change are those that mainly rely on water. They may include beverage companies and farms. Tourism also is principally affected because if a particular destination’s weather is either hit by a heat wave or has very low temperatures tourists traffic will experience a significant reduction. Thus businesses need to factor in climate change as they look into the future.
Climate change is shaping the future of businesses across the globe. Green economies will need to be adapted in various parts of the world. This mainly translates to the use of cleaner sources of energies and fuels. Stricter legislations on the emission of greenhouse gases will need to be implemented. Individual companies will need to revisit their business plans and strategies to incorporate the long-term effects of global warming on their businesses. This will help them analyse their interests and see possible opportunities. Businesses also need to find new partners and ways to collaborate and efficiently address the climate change issue. Through strategic measures, economies and companies can thrive and grow in the new environment.
Conclusion
In conclusion, the paper efficiently explained what climate change is and the causes of climate change. It further covered the various economic effects that have been faced in multiple parts of the world due to disasters brought about by climate change. It explained that human activities have primarily affected the weather patterns through various activities among them the production of electricity, use of vehicles and the burning of fossil fuels. It explained how businesses are affected by climate change and cited some examples. The inextricable bound between the economy and climate change was illuminated. The paper finally provided recommendations on how businesses and economies could work in this new environment. The embracing of a green economy would help bring about a sustainable development which is safe. It explained that if businesses approached the future with an all-inclusive effective strategy, growth could be achieved even with this challenge.
References
State of world population 2011. (2011). New York: United Nations Population Fund (UNFPA).
Bloomberg, M., Paulson, H. and Steyer, T. (2015). Economic risks of climate change. New York: Columbia University Press.
Philander, S. (2012). Encyclopedia of global warming & climate change. Thousand Oaks, Calif.: SAGE Publications.
Gual i Sole, J. (2004). Building a dynamic Europe. Cambridge, UK: Cambridge University Press.
The Guardian. (2017). Merkel doubles funding to help German cities fight air pollution. [online] Available at: https://www.theguardian.com/business/2017/sep/04/merkel-doubles-funding-to-help-german-cities-fight-air-pollution [Accessed 29 Nov. 2017].
The Balance. (2017). What Has Climate Change Cost Us? What's Being Done?. [online] Available at: https://www.thebalance.com/economic-impact-of-climate-change-3305682 [Accessed 29 Nov. 2017].
