On September 27, 2016 a devastating typhoon caused Taiwanese highways, schools, and stock and foreign exchange markets to close. Taiwanese news agency Focus Taiwan, has explained that the Typhoon’s wind speeds reached up to 191 kph. This storm exemplifies the terrible consequences of climate change. In fact, climate change has caused tropical cyclones to increase in intensity for over the last 40 years. However, increasing world temperature not only affects weather patterns, it also affects the global economy.
The main problem that climate change creates in the world economy is the loss of resources. Due to climate change, sea levels are rising and the amount of flood, droughts, and wildfires are increasing. Wildfires have steadily increased in frequency and duration since the 1980s. Sea levels are rising at higher rates, 1.2 inches per decade. Rainfalls are much more intense than they were 50 years ago. And droughts have increased in length and extremity since the 1970s.
As storms, wildfires, floods, and droughts increase, highways, schools, and financial markets will be shut down more often and infrastructure will be damaged. This will result in the loss of time and productivity. Investment in certain areas will also decrease due to the perceived risk in areas that are severely impacted by climate change. This loss in investor confidence could even lead to more problems in the economy, such as more economic shocks.
But is it all really doom and gloom? Is there a way to reverse the deleterious effects of climate change? Well, unfortunately, no. There isn’t a way to reverse the effects of climate change. However, we can stop it from getting even worse by making greater efforts to lower our use of oil and other materials that hurt the environment. Companies could also participate in agreements to lower pollution, such as cap and trade and other market based approaches to improving the environment.
Image Source: The Daily Conversation