Much of the impacts of climate change or global warming have mainly centered on the impacts of the phenomenon on the environment. In particular, many of the advocates and supporters of climate change policies have focused on the impacts of wanton pollution of the planet on the Earth’s biodiversity and atmosphere. Countless forums and policy conferences have been joined in the hope of averting what many call the development of an uninhabitable planet in the future. However, there is one area that has not generated that much interest in the global media and that is the effect of global warming on the conduct and operation of global trade.
In the report of the Massachusetts-based Copenhagen Consensus Center, the disclosure sought to assess the economic carnage resulting from global warming and other climate change issues. In the opinion of the group, by the year 2070, the phenomenon of global warming will inflict a net expense on the global community, which will legitimize the need strong and effective climate change action policies.
The manifested effects of global warming are increased amounts of carbon dioxide in the atmosphere “feeding” the plants, increasing agricultural output. Nevertheless, the positive effects of this higher concentration of carbon dioxide in the atmosphere are quickly being displaced by the negative effects, and owing to a higher global temperature, global heat-associated fatalities are seen to rise (Nuccitelli 1).
The economic effects of climate change related shifts are not new to this century. In the 9th to the 14th century, global temperatures rose by 2° C that made the temperatures in other areas conducive for abundant harvests, and in others, experience extended periods of drought that rattled civilizations to their very foundations. For example, in this time, Northern Europeans and Inuits greatly gained from the rise in temperature; on the other hand, the Mongols and “Mesoamerican” civilizations were inflicted severe economic losses ranging from having limited expansion opportunities for their societies, to almost eliminating them from existence.
It can be averred that the world as it operates in this present time was the result of these global temperature shifts. However, it must be noted here that this development was not due to the decrease in the available resources or land in this time; the shifts in the locations were due to the appropriateness of the location for maximum production and commerce. However, given present costs, moving people as well as goods will not only be prohibitively expensive, and the impact on trade of temperature change will be heavily dependent on the scope of the interactions of climate change and trade (Desmet, Hansberg 2).
However, as adverse the effects of climate change will inflict on the global economy, implementing policies that will restrict carbon emissions will have the same deleterious effects on the global economy. Embracing carbon emission limitation policies with size and scope of the Lieberman-Warner and Waxman-Markey “cap and trade” legislative proposals or the Boxer-Sanders “carbon tax” bill not only would economically damage the American economy, but that of the global economy as well. Here, it must be asked what kind of damage the US and the global economies will sustain if these proposals were to be adopted.
In the context of the Lieberman bill, this would not increase global income levels, but actually work to decrease it, even with the factoring in of the conservative benefits gained from the adoption of these policies. The damage would outstrip the benefits by an estimated $100 trillion over the rest of the 21st century. The negative impacts of the climate policy would even be amplified if the major industrialized powers were to enact similar climate control policies akin to that of the United States. In addition, the cumulative adverse impact would rise exponentially, resulting in the infliction of losses on those working for the last two decades to experience losses on an annual basis. These losses would be dramatically greater than the collective losses suffered during the early years of the implementation of the climate control regime (Kreutzer 1).
Reports state that the positive effects of climate change control policies will be experienced until the latter stages of the 21st century, and the negative effects will come into force by 2025. Simply put, after 2025, the economic benefits gained from the adoption and operation of climate change and control policies will gradually lessen until such time that these climate control policies will become a liability to the global economy. Global temperatures must be stabilized to 1900 levels by 2025 at 1° C by 2025 (Nuccitelli 1).
Future global change policies
In the event that the United States is the sole country that enacts carbon control policies, the result will be a huge net loss for global GDP. The measurements will show that developing countries will gain; the losses in the United States will be more than enough to displace the benefits generated in other countries. Advocates of climate control invoke the interests of the future global citizens to legitimize the enormous costs associated with them. Ironically, the future generation will sustain enormous losses over the time that the new carbon control emission control laws come into force than those in the early stages of these laws. To cite an example, should all Annex 1 states participate, then net losses to the global GDP will come to $500 billion annually until 2030. From 2031-2050, net losses will come to $5.5 trillion on an annual basis. In the final two decades of the calculations, the losses would be $100 trillion annually.
It is seen here that though global warming will still cause negative effects, restricting emissions will not solve the problem. Cutting carbon emissions is translated to reducing economic activity; here, reducing economic activity will mean lesser trade and commerce, decreasing global economic activity. Losses that will be generated by the bills will result in losses amounting to hundreds of trillions of dollars by the end of the century (Kruetzer 1).
Desmet. Klaus, Rossi-Hansberg, Esteban, “On the spatial economic impact of global warming,” <https://www.princeton.edu/~erossi/SEIGW.pdf
Kruetzer, David W., “A cure worse than the disease: global economic impact of global warming policy,” <http://www.heritage.org/research/reports/2013/05/a-cure-worse-than-the-disease-global-economic-impact-of-global-warming-policy
Nuccitelli, Dana, “More global warming will be worse for the economy, says the Copenhagen Consensus Center,” <http://www.theguardian.com/environment/climate-consensus-97-per-cent/2014/jan/24/more-global-warming-worse-economy