Trade

Climate Change Will Devastate The Global Economy

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

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The Danger in Trump’s Trade Proposals

Are Donald Trump’s international trade proposals really that bad? Yes, yes they are. Let’s take a look at a few of Donald Trump’s international trade proposals.

  1. 20% tax on imports
  2. 15% tax for outsourcing jobs
  3. Donald Trump appointing himself as the United States Trade Representative

20% tax on imports
A 20% tax on imports is a tariff. Tariffs may sound like they would protect American jobs and industries, but tariffs are actually harmful. High tariffs decrease foreign competition and protect inefficient industries which leads to industries becoming even more inefficient. This means that tariffs basically bail out inefficient industries. This bail out is paid by Americans through the increased costs of goods and services. The increased costs of goods and services could lead to a decrease in the demand of goods which could cause people to lose their jobs.

15% tax for outsourcing jobs
A 15% tax on companies that outsource jobs may sound like a good idea. After all, it would help to ensure that people don’t lose their jobs to outsourcing. However, this tax would have effects similar to a tariff. It would promote inefficiency and keep prices high.

Donald Trump appointing himself as the United States Trade Representative
If Donald Trump became president, it would be a terrible idea for him to appoint himself as America’s trade representative. Besides him not having enough time to be the United States Trade Representative due to various presidential duties, Donald Trump does not have the expertise to be the United States Trade Representative. The current United States Trade Representative, Michael Froman, has extensive experience in international economics and public policy. Donald Trump on the other hand is a business man, he does not have much experience in international economics or public policy.

Image: Mr Donald Trump New Hampshire Town Hall on August 19th, 2015 at Pinkerton Academy in Derry, NH by Michael Vadon https://www.flickr.com/photos/80038275@N00/20724485306