Economic Effects of Climate Change

Economic Effects of Climate Change

REPORT SUMMARY: Climate Change Background (causes, consensus), Impacts of Climate Change on Growth & Development, Estimated Costs in Developing Countries, Effects on Global Food Supply (agriculture, production), Diseases, Climate Change Policy, Technological Innovation, Carbon Tax, Low Carbon Economy

What is climate change?

Climatologists commonly refer to climate as the mean or average weather in a given place or region.

This description is usually stated in statistical forms showing variations such as averages and extremes. Climate comprises of humidity, patterns of temperature, wind, seasons, and rain or snow.  A recent science-based report shows that the quantity of carbon dioxide (CO2) and other forms of heat-trapping gases in the atmosphere continues to rise to such levels that the Earth get warmed resulting in a broad range of environmental effects such as melting ice and snow, rising sea levels, drought and wild fires, extreme storms, rainfall and floods.


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Causes of Climate Change

The earth’s climate is naturally variable on all time scales. However, its long-term state and average temperature are regulated by the balance between incoming and outgoing energy, which determines the Earth’s energy balance.

Any factor that causes a sustained change to the amount of incoming energy or the amount of outgoing energy can lead to climate change.

As these factors are external to the climate system, they are referred to as ‘climate forcers’, invoking the idea that they force or push the climate towards a new long-term state – either warmer or cooler depending on the cause of change.

Different factors operate on different time scales, and not all of those factors that have been responsible for changes in earth’s climate in the distant past are relevant to contemporary climate change.

Factors that cause climate change can be divided into two categories ­- those related to natural processes and those related to human activity. In addition to natural causes of climate change, changes internal to the climate system, such as variations in ocean currents or atmospheric circulation, can also influence the climate for short periods of time. This natural internal climate variability is superimposed on the long-term forced climate change.

Natural Causes

The Earth’s climate can be affected by natural factors that are external to the climate system, such as changes in volcanic activity, solar output, and the Earth’s orbit around the Sun. Of these, the two factors relevant on timescales of contemporary climate change are changes in volcanic activity and changes in solar radiation. In terms of the Earth’s energy balance, these factors primarily influence the amount of incoming energy. Volcanic eruptions are episodic and have relatively short-term effects on climate. Changes in solar irradiance have contributed to climate trends over the past century but since the Industrial Revolution, the effect of additions of greenhouse gases to the atmosphere has been about ten times that of changes in the Sun’s output.

Human Causes

Climate change can also be caused by human activities, such as the burning of fossil fuels and the conversion of land for forestry and agriculture. Since the beginning of the Industrial Revolution, these human influences on the climate system have increased substantially. In addition to other environmental impacts, these activities change the land surface and emit various substances to the atmosphere. These in turn can influence both the amount of incoming energy and the amount of outgoing energy and can have both warming and cooling effects on the climate.  The dominant product of fossil fuel combustion is carbon dioxide, a greenhouse gas. The overall effect of human activities since the Industrial Revolution has been a warming effect, driven primarily by emissions of carbon dioxide and enhanced by emissions of other greenhouse gases.

The build-up of greenhouse gases in the atmosphere has led to an enhancement of the natural greenhouse effect.  It is this human-induced enhancement of the greenhouse effect that is of concern because ongoing emissions of greenhouse gases have the potential to warm the planet to levels that have never been experienced in the history of human civilization. Such climate change could have far-reaching and/or unpredictable environmental, social, and economic consequences.


Short-lived and long-lived climate forcers

Carbon dioxide is the main cause of human-induced climate change. It has been emitted in vast quantities from the burning of fossil fuels and it is a very long-lived gas, which means it continues to affect the climate system during its long residence time in the atmosphere. However, fossil fuel combustion, industrial processes, agriculture, and forestry-related activities emit other substances that also act as climate forcers. Some, such as nitrous oxide, are long-lived greenhouse gases like carbon dioxide, and so contribute to long-term climate change.

Other substances have shorter atmospheric lifetimes because they are removed fairly quickly from the atmosphere. Therefore, their effect on the climate system is similarly short-lived. Together, these short-lived climate forcers are responsible for a significant amount of current climate forcing from anthropogenic substances.

Some short-lived climate forcers have a climate warming effect (‘positive climate forcers’) while others have a cooling effect (‘negative climate forcers’).

If atmospheric levels of short-lived climate forcers are continually replenished by ongoing emissions, these continue to exert a climate forcing. However, reducing emissions will quickly lead to reduced atmospheric levels of such substances. A number of short-lived climate forcers have climate warming effects and together are the most important contributors to the human enhancement of the greenhouse effect after carbon dioxide.

This includes methane and tropospheric ozone – both greenhouse gases – and black carbon, a small solid particle formed from the incomplete combustion of carbon-based fuels (coal, oil and wood for example).

Other short-lived climate forcers have climate cooling effects, most notably sulphate aerosols. Fossil fuel combustion emits sulphur dioxide into the atmosphere (in addition to carbon dioxide) which then combines with water vapour to form tiny droplets (aerosols) which reflect sunlight.

Sulphate aerosols remain in the atmosphere for only a few days (washing out in what is referred to as acid rain), and so do not have the same long-term effect as greenhouse gases. The cooling from sulphate aerosols in the atmosphere has, however, offset some of the warming from other substances. That is, the warming we have experienced to date would have been even larger had it not been for elevated levels of sulphate aerosols in the atmosphere.

The Effects of Sea Level Rise and Climate Change

Strong evidence from scientific research obtained from core samples, tide gauge readings and satellite measurements show that global mean sea levels have been rising since the mid-19th century.

Available records indicate that during the 20th century, the global mean sea levels (GMSL) rose by about 15-20 centimeters which roughly equals 1.5 to 2.0 millimetre per year and the rate at which the GMSL increased towards the end of the 20th century was greater than at the early years of the century. The rate of increase of the GMSL in the first ten years of the 21st century has been found to be around 3.1 mm per year which is much higher than the average rate recorded for the 20th century.

Future projections estimate the GMSL to rise by around 1 meter by 2100 but if the rate at which Greenland ice sheet melt increases, sea level might rise by roughly 2 meters by 2100.

The three major processes leading to a rise in sea levels are:

  • Thermal expansion: Water expands normally as its temperature rises just like air and other fluids. Ocean temperature increases as climate change increases leading to sea level rise because of the expansion of its water through the application of heat (thermal expansion). Evidence suggests that thermal expansion could have contributed almost 2.5cm of sea level rise from mid-20th century. Projections by the IPCC in its Fourth Assessment suggests that sea levels will rise by about 17-28 cm (with an uncertainty rate of 50% plus or minus) over the 21st century.
  • Melting of glaciers and ice caps: Climate scientists say that melting of glaciers and ice caps are less likely contributors to sea level rise. The Fourth Assessment Report of the IPCC estimated that the melting of mountain glaciers and ice caps in the second half of the 20th century increased sea level by around 2.5cm and projected that melting of ice and ice caps will lead about 10-12cm (plus or minus of one third) increase in sea level in the 21st century.
  • Loss of ice mass from the Greenland and West Antarctic sheets: The West Antarctic sheet retains an equivalent of 5 meters of sea level while the ice on Greenland holds around 7 meters of sea level. If all the ice on Greenland and the West Antarctic were to melt away completely in a process that could last for many centuries, both will contribute about 12 meters of sea level rise. The West Antarctic ice sheet is highly vulnerable because it is rooted below sea level. Though the East Antarctic ice sheet holds around 55 meters of sea level but it is less vulnerable to loss of its ice.

The potential impacts of these three processes include more rapid coastal erosion, rising water tables, changes in tidal prism, slat water intrusion into aquifers and surface waters, increased storm damage to coastal infrastructure, and changes in shoreline including the possibility that protective natural barriers will be lost totally. 

Ocean chemistry will definitely change when ocean level rises due to climate change. Concentrations of carbon dioxide in the atmosphere could make water bodies to become more acidic and warmer sea water will have more carbon dioxide dissolved in it resulting in less oxygen. Sea level rise will cause harm to marine ecosystems, it will alter ocean’s biodiversity, and also affect the tiny plankton which produces much of the oxygen in the atmosphere.

More information on sea levels and climate change

The Scientific Consensus on Climate Change

There is an overwhelming level of scientific consensus on human-caused climate change. Over 95% of actively publishing climate scientists agree that the earth is warming and that human activity is the cause. In spite of this agreement, only about 50% the general public think that scientists have reached a consensus on human-caused climate change. Two sources of the discrepancy are the unbalanced portrayal of the situation in the media, and the Manufactured Doubt Industry. – source:

    Climate Change and the Media

    According to a poll done by (WPO) after the 2010 election, 45% of voting Americans think that most scientists do not agree that climate change is occurring. WPO goes on further to estimate that this percentage has actually increased over the past ten years. A recent Pew study found that an overwhelming majority of Americans like science, have a positive regard for scientists, and think that science "contributes a lot to society’s well-being." So if there’s obvious consensus among scientists, why is that information not making it to the public?

    Never Rarely Once a week 2-3 times a week Almost every day
    Fox News 30 37 45 36 60
    CNN 51 40 39 25 25
    MSNBC 49 34 35 35 20
    Network TV news broadcasts 59 37 41 36 35
    Public Broadcasting (NPR or PBS) 49 41 36 21 13
    Newspapers & news magazines (in print or online) 48 43 41 24 40


    Table 1. Of people who responded that they agree with the statement "most scientists believe that global warming is not occurring, " 60% watch Fox News almost every day. (Source)

    The Economics of Climate Change

    In their characteristic manner, economists generally weigh costs and damages. Therefore, economics of climate change focuses on identifying the economic implications of climate change and, hence, offer relevant, normative, and realistic policies for bringing the menace under control.

    Though the economics of climate change relates to other aspects of environmental economics but because of a number of factors such as the nature and extent of uncertainties involved with it, its distinctive and global nature, its international scope, its long term scale, and the possibilities of distributing policy benefits unevenly, it is often given a unique focus.

    Projections by Goulder and Pizer (2005) suggests that spending on energy infrastructure could exceed $16 trillion by 2030 leading to a rise in carbon emission by 60%. Therefore, the importance of looking at the economics of climate change now in order to develop the right choices for mitigating climate change cannot be overemphasized.

    In a working paper titled ‘Climate Change and Economic Growth’ and produced by the Commission on Growth and Development led by Nobel Laureate Mike Spence, the author, Robert Mendelsohn, remarked: ‘whereas the grim descriptions of the long term effects of climate change have led many to believe that the consequences of climate change will threaten long term economic growth but contrary to this impression, the impacts of climate change on the global economy will likely be very small over the next five decades and severe impacts by the end of the century is quite unlikely.’

    While this statement may sound quite puzzling, it does make a lot of sense to economists and to clarify further, the author says: ‘the greatest danger that climate change poses to the global economy in the long term arises from potentially excessive near-term mitigation efforts’ meaning that there is the need to keep up with the current global economic growth while allowing the greening of the economic growth strategy.

    The priority of many of the economists concerned with climate change advocate developing the ‘right economic choices’ for mitigating the potential impacts of the global phenomenon but this position is at variance with the views of scientists and environmentalists who advocate that more extreme mitigation policies be applied in the near term.

    The Impacts of Climate Change on Economic Growth and Development

    One of the main drivers of climate change is economic growth.

    As the demand for energy and goods that uses fossil fuels intensively increases, the economy expands and the quantity of greenhouse gas released into the atmosphere will also increase.

    However, economic growth may bring about a change in technological know-how leading to the inventions of more products that are energy efficient and, hence, slow down the concentration of carbon dioxide in the atmosphere.

    Some impacts of climate change are directly linked to market transactions and invariably affect gross domestic product (GDP) while some are non-market impacts because the effects could only be noticed on human health and ecosystems and not on market transactions.

    Climate change impacts that are market impacts could be measured as economic cost but it is difficult to calculate non-market impacts on an economic scale.

    The uncertainties in scientific measurement about how climate change will unfold makes estimating the economic impacts of climate change rather difficult. Nevertheless, economists have attempted making economic analysis of the potential impacts climate change would have on growth and development of a state and the global economy.

    • Smith et al., (2001) warns that climate change would further widen economic inequities between individuals and nations. Smith also says that a slight increase in global mean temperature of about 2oC over the 1990 levels could lead to net negative market sector and net positive market sector in many developing and developed nations respectively.
    • Pearce et al., (1996) suggests that based on available economic research, only a limited sector of the market economy such as agriculture, tourism, energy, coastal resources, forestry, and water is susceptible to climate change but in contrast, Stern (2006) claims that the entire global economy and the well-being of people across the globe may be at risk.
    • Mendelsohn (2009) reasoned that even if the impact of climate change turns out to be severe, it is doubtful if climate change can hurt the global economy that much since the sectors listed above make up around 5 percent of the global economy and it is expected that the share of each sector will shrink over time. The thinking is that most sectors of the global economy are not sensitive to climate change. However, Mendelsohn holds the view that on a comparison basis, the economies of some nations would be more susceptible to climate change when compared with the global average. Those countries that might be hit harder are countries that have a larger share of their economies in agriculture and forestry. In general, Mendelsohn says developing countries are more vulnerable. This is probably because many developing countries appear to be in the low geographical latitudes where the impacts of climate change on the market economy sectors earlier mentioned will be the most severe. Already, the major economic sectors of some countries in Africa have been noted to be vulnerable to observed changes in climate conditions meaning that future climate change could impact these countries further more. However, Smith et al., (2001: p. 940-941) predicted that a number of the developing nations would have the wherewithal to efficiently cope with the challenges of climate change.

    Though the uncertainties over climate sensitivities may pose difficulties in calculating the real economic impacts that climate change could have on growth and development yet analysts consider these uncertainties as the only important factor needed to determine the costs of carbon in the atmosphere, and, hence, climate sensitivity is important as an economic measure of climate change impacts.

    Low-income countries will remain on the frontline of human-induced climate change over the next century, experiencing gradual sea-level rises, stronger cyclones, warmer days and nights, more unpredictable rains, and larger and longer heatwaves, according to the most thorough assessment of the issue yet.

    East Africa can expect to experience increased short rains, while west Africa should expect heavier monsoons. Burma, Bangladesh and India can expect stronger cyclones; elsewhere in southern Asia, heavier summer rains are anticipated. Indonesia may receive less rainfall between July and October, but the coastal regions around the south China Sea and Gulf of Thailand can expect increased rainfall extremes when cyclones hit land.

    Estimates of the incremental costs of adaptation in developing countries ($bn per annum)

    Study 2010-2015 2010-2020 2030 2010-2050 Method
    World Development Report (2010) 30-100 Compiled several estimates of adaptation costs (including others in this list) with scenarios of 450ppm, 2005 US$
    World Bank EACC (2010) 70-100 Average annual adaptation costs from 2010 to 2050 in the agriculture, forestry, fisheries, infrastructure, water resource management, and coastal zone sectors, including impacts on health, ecosystem services, and the effects of extreme-weather events. In 2005 US$.
    Project Catayst (2009) 13-38 Estimates only public funding needs in vulnerable countries using costs from NAPAs, increased funding of public goods and disaster support. Assumes 450 stabilization, $1.25 to €1 exchange rate
    UNFCCC (2007) 27-67 Including: agriculture, forestry and fisheries, water supply, human health, coastal zones, infrastructure, and ecosystems. Excluded: mining and manufacturing, energy, retailing, tourism and ecosystems. In 2005 US$ between 450 and 550ppm
    Oxfam (2007) >50 Based on World Bank (2006), plus extrapolation of costs from NAPAs and NGO projects
    UNDP HDR (2007) 86-109 Builds on World Bank (2006), plus cost of adapting Poverty Reduction Strategy Papers and strengthening disaster response
    World Bank (2006) 9-41 Costs of climate proofing ODA, foreign and domestic investment
    Stern Review (2006) 4-37 Aiming for 450ppm stabilisation


    Additional Resources on The Economics of Climate Change:

    Economics of climate change

    The Impacts of climate change on growth and development

    How climate change will affect people around the world

    Implications of climate change on development

    Costs of climate change in developing countries

    Projecting the Growth of Greenhouse Gas Emissions

    It is the standard practice of the U.S. Environmental Protection Agency (EPA) to use future emissions projections of non-carbon dioxide greenhouse gases as a basis for determining how cost-effective short-term mitigation alternatives and future policy can impact greenhouse gas emissions.

    This is because though carbon dioxide (CO2) are the main constituents of greenhouse gas emissions, there are other non-CO2 gases like nitrous oxide, methane, and fluorinated greenhouse gases that are major contributors to climate change. When considered on a per-ton basis, these non-CO2 greenhouse gases contribute more to climate change impacts than CO2 and some of these gases have significant effects on a short-term basis than carbon dioxide.

    There are series of reports published by EPA that projects the growth of greenhouse gas emissions. EPA usually provide greenhouse gas (GHG) emissions reports by gas and by sector.

    The sectors commonly reported include

    • transportation
    • energy
    • industrial processes
    • agriculture
    • land use
    • land-use change
    • waste
    • forestry


    The common gases in most reports are carbon dioxide (CO2), methane (CH4), hydrofluorocarbons (HFCs), nitrous oxide (N2O), and sulfur hexafluoride (SF6).

    The quantities of future GHG levels are highly uncertain but there are a wide range of data illustrating emission projections that have been generated quantitatively. A number of emissions projections combined anthropogenic emissions as a single figure which is termed carbon dioxide equivalent (CDE). The CDE describes the quantity of global warming that could be caused by a given type of GHG by using the concentration of carbon dioxide as the reference.

    Using the baseline scenarios of emissions projection, it is projected that by 2030, there will be an increase of 25% and 90% in greenhouse emissions relative to the 2000 level.  It was also projected that for carbon dioxide only, two-thirds to three-quarters of the increase would be recorded in developing nations of the world.  But the same report also projected that the average per capita carbon dioxide emissions in developing nations would remain significantly lower than those in the developed world.

    The projections of carbon dioxide equivalents for 2100 varied from a reduction of about 40% to an increase in GHG emissions of 250% above the levels recorded for 2000.
    Source: SRES Final Data (version1.1, July 2000)

    A research report says that the estimated total atmospheric concentration of long-lived greenhouse gas emissions was about 455 parts per million (ppm) of carbon dioxide equivalent .  When deduction is made for the effects of deforestation and other land-use changes and aerosol, then the physical effect which is also referred to as radiative forcing reduces the carbon dioxide equivalent to between 311 and 435 ppm. The estimate recorded for 2011 carbon dioxide equivalent concentrations is 473 ppm.

    Six of the IPCC’s (Intergovernmental Panel on Climate Change) SRES emissions scenarios, that is the base line scenarios, have been used to project the possible future changes in atmospheric carbon dioxide concentrations equivalent. For example, the emissions projections for 2100 has been fixed between 540 to 970 parts per million (ppm).

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    Global Food Supply and Climate Change

    Though crops, livestock and fisheries depend on specific weather conditions, it is difficult to understand the overall effect that climate change could have on food supply.

    In some instances, slight warming and high concentration of carbon dioxide may help some crops to grow faster yet agricultural yields may reduce with severe warming and floods and drought can cause further damage to agriculture and, hence, reduce food supply.

    The potential effects that climate change could have on world food supply and security have been documented , and some of the risks posed by concentrations of carbon dioxide in the atmosphere include negative effects on grain, fruit crops, vegetable, livestock and fisheries among others.

    • Vietnam is one of the hot spots where climate change through potential global sea level rise threatens rice production.
    • The Yakima River which is in the south central and eastern Washington state annually produces mostly perennial crops valued around $1 billion but many of the crop growers around this basin have been facing water shortages. In fact, reduced water allocation from the Yakima Basin that occurred in 2001 led to economic losses worth between $140 million and $195 million.

    Some of the practical effects of climate change on agriculture and food supply include reduction in yields, the need to deploy irrigation more than before, decreased arability; he possibility that insect and pests may reproduce more when the atmosphere becomes warmer, delay in planting and harvesting, and untold risks to fisheries.

    It’s not economic development that matters in this case, it’s the location on the surface of the Earth. Without better crop varieties or other agricultural technology improvements, irrigated wheat yields, for example, will fall at least 20 percent by 2050 as a result of global warming, and south Asia as well as parts of sub-Saharan Africa will face the worst effects.

    Potential Effects of Climage Change on Agriculture and Food Production

    The potential effects that climate change could have on agriculture and food production are many. For example, the rate of production of food crops, livestock, and dairy yields, may decline when temperature rises or due to drought-related stress. Several parts of the world that have been depending on natural and regular supply of water from rainfall each year during planting seasons may now require artificial supply of water through irrigation leading to higher costs for the farmers and possibly communal conflict when access to water becomes a battle for the fittest.

    In another scenario, climate change may make warmer conditions to shift to higher latitudes, where the soil lack adequate nutrients that could support crop production, making farmers to contend for lower-latitude areas that are less productive. Also, if the seasonal rainfall patterns continues to be irregular due to climate change, that could lead to more severe precipitation events such as flooding resulting in delay in planting and harvesting agricultural crops.

    The IBSNAT crop models were used to estimate how climate change and increasing levels of carbon dioxide may alter yields of world crops at 112 sites in 18 countries. (Figure 9.1). The crop models used were CERES-Wheat (Ritchie and Otter, 1985; Godwin et al.,  1989), CERES-Maize (Jones and Kiniry, 1986; Ritchie et al.,  1989), CERES-Rice (Godwin et al.,  1993) and SOYGRO (Jones et al.,  1989).

    The IBSNAT models are comprised of parameterizations of important physiological processes responsible for plant growth and development, evapotranspiration, and partitioning of photosynthate to produce economic yield. The simplified functions enable prediction of growth of crops as influenced by the major factors that affect yields, i.e., genetics, climate (daily solar radiation, maximum and minimum temperatures, and precipitation), soils, and management practices. The models include a soil moisture balance submodel so that they can be used to predict both rainfed and irrigated crop yields. The cereal models simulate the effects of nitrogen fertilizer on crop growth, and these were studied in several countries in the context of climatic change. For the most part, however, the results of this study assume optimum nutrient levels.

    The IBSNAT models were selected for use in this study because they have been validated over a wide range of environments (e.g., Otter-Nacke et al.,  1986) and are not specific to any particular location or soil type. The validation of the crop models over different environments also improves their ability to estimate effects of changes in climate. Furthermore, because management practices, such as the choice of varieties, planting date, fertilizer application and irrigation, may be varied in the models, they permit experiments that simulate adaptation by farmers to climate change.

    Insect and Pests

    The problem that insect and pests constitute may be higher when the atmosphere becomes warmer on a prolonged term because they are known to survive or even reproduce more rapidly each year if the warm weather conditions persist.

    Crop growers in Canada and the NE Washington know that this is already happening because pine bark beetles are multiplying rapidly and are causing devastation to large tracts of forests .

    Migration of insect and pests from one region to another is possible when climate changes leading to changes in humidity and temperatures.

    Commercial fisheries may also be affected when different type of fishes shift from one region to the other in response to changes in weather conditions and temperature.

    Really, the threats of global food supply won’t affect countries and regions of the world equally. If a country loses its arable land due to climate change, the resources or favorable weather to pursue cost-effective alternatives and maintain its food security may be lacking. Though we hope that advancement in technology would bring succour to humanity in the worst case scenarios of climate change but since some countries are more susceptible to unfavorable international trade agreements than others, food distribution may be disrupted in some parts of the world.

    Additional resources:

    Climate Change and Diseases

    The health effects of climate change is one of the most important nonmarket impacts of climate change.

    Stress induced by a rise in heat level may increase heat strokes, dehydration, and deaths resulting from changes in weather . Allergies and respiratory health may also be triggered by climate change .

    Vector borne diseases (VBD) often thrive more rapidly due to the effects of climate change. Life-cycles of pathogens can be affected by changes in climate. For example, drought and hot summer temperatures have been found to rapidly increase the number of West Nile virus incidents. California could be at risk of a break out of exotic vectors like those responsible for yellow fever and dengue fever if raining season gets unduly prolonged.  

    In addition, VBDs may cross geographical boundaries and extend beyond current ranges making more people to be at risk of contracting VBD. Extreme events occasioned by severe changes in climate could threaten lives and where people fail to adapt, untold suffering may occur.

    The deadly dozen that may increse due to climate change:

    • Bird flu: H5N1 infections are becoming the rule rather then the exception in farmed poultry worldwide, and even wild birds are showing signs of infection more often. It has forced the culling of millions of ducks, chickens and geese globally—and has killed more than 240 people—resulting in at least $100 billion in economic losses.
    • Babesiosis: This malarialike disease carried by ticks is endemic in the tropics, but has cropped up everywhere from Italy to Long Island, N.Y. It is rare in humans at present and seldom deadly (treatable with antibiotics) but may become more problematic as the globe warms, providing more welcoming environments.
    • Cholera: This bacterium thrives in warmer waters and causes diarrhea so severe that it can kill within a week. Without improved sanitation, rising global temperatures will increase deadly outbreaks.
    • Ebola: This virus is lethal to humans and other primates, and has no cure. In addition, it is unclear where the disease, which causes fever, vomiting and internal or external bleeding, comes from—though scientists suspect fruit bats. What is clear is that outbreaks tend to follow unusual downpours or droughts in central Africa—a likely result of climate change.
    • Parasites: Many spread easily between humans, livestock and wildlife. Higher average temperatures and more rainfall will help many parasites, such as the tiny worms known as Baylisascaris procyonis that are spread by raccoons, to thrive in the wild before finding a host.
    • Lyme disease: This bacterium-caused disease will spread as climate changes extend the ranges of the ticks that carry it.
    • Plague: Changes in temperature and rainfall will affect rodent populations globally as well as the infected fleas they carry.
    • "Red tides": Poisonous algal blooms in coastal waters may increase as a result of warming temperatures or changes in littoral sea life.
    • Rift Valley fever: A newly emergent virus, carried by mosquitoes that causes fever and weakness, has spread quickly through Africa and the Middle East, killing people, along with camels, cattle, goats and sheep.
    • Tuberculosis: Both the human and livestock varieties of TB are likely to increase, particularly the latter as droughts bring livestock and wildlife into closer proximity at watering holes.
    • Yellow fever: Mosquitoes spread this disease, which causes fever and jaundicelike symptoms, between wildlife and humans, and will likely spread into new areas as the climate changes.

    More resources:

    Climate Change Policy

    Evolving a climate change policy that works can take many forms that includes individual action, political action government action and actions of watchdogs like the environmental protection agency (EPA).

    The EPA is saddled with many responsibilities that include:

    • collecting and publishing emissions data
    • developing regulatory framework geared towards promoting a clean energy economy
    • gathering and evaluating policy options
    • forming international partnership towards advancing minimizing carbon footprint
    • advancing the science

    This agency also helps communities prepare for climate change and how adapt to it.

    In 1988 the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP) set up theIntergovernmental Panel on Climate Change (IPCC), an expert body that would assess scientific information on climate change. As a reaction to the concerns raised in the IPCC’s First Assessment Report the UN General Assembly established the Intergovernmental Negotiating Committee for a Framework Convention on Climate Change. The UN Framework Convention on Climate Change (UNFCCC) was adopted in May 1992 and entered into force in 1994. The convention included the commitment to stabilise greenhouse gas emissions at 1990 levels by 2000.

    Agreed in 1997, the UNFCCC’s Kyoto Protocol is a first step towards achieving more substantial global emission reductions. It sets binding emission targets for developed countries that have ratified it, such as the EU Member States, and limits the emission increases of the remaining countries for the first commitment period from 2008 to 2012. The 15 pre-2004 EU Member States (the EU-15) have a joint emission reduction target of 8 % below 1990 levels. Through the internal EU "burden-sharing agreement", some EU Member States are permitted increases in emissions, while others must decrease them. Most Member States that joined the EU after 1 May 2004 have targets of -6 % to -8 % from their base years (mostly 1990).

    Individual Action on Climate Change

    The individual action involves making various choices that limit and/or reduce the potential impacts posed by climate change on our environment. For example, choosing a diet low on carbon will minimize carbon footprint on the long run.

    A research report gave an estimate of the carbon footprint from the U.S. food system to be about 20 percent of the aggregate of the greenhouse emissions from the entire nation.  This estimate might be very conservative since it was based on the direct sources in the U.S. without considering food imported into the U.S. Industrial meat, industrially produced food and dairy among others constitute high carbon diet. The carbon footprint for food is not only measured based on waste of food but also on the entire chain involving production, processing, packaging, transport, and the actual stages involved with the preparation of food.

    Vegan Choices: A report by the United Nations Environment Programme advocated a shift from high carbon food choices to vegan diet where less fossil fuel would be required to complete the chain from production to the point where the consumer prepares the food and, hence, less carbon dioxide will be released to the atmosphere.

    Political Actions on Climate Change

    There are many ways political action could be deployed to save the Earth from carbon dioxide concentrations in the atmosphere.

    • Direct lobbying
    • Protests
    • Letters to representatives
    • laws on greenhouse gas emissions limits
    • Tax incentives
    • Regulations that specify market-based approaches and grant economic incentives for controlling emissions of pollutants
    • Government policies

    The U.S. and the Challenge of Climate Change Policy

    Recently President Barack Obama endorsed a long-term measure meant to reduce emissions of greenhouse gases considerably by 2050 to 80% below the levels recorded in 1990.

    The American Clean Energy and Security Act which target 2050 and advocate for 83% reduction below 2005 levels was recently passed by the U.S. House but the bill has not yet received the consent of the U.S. Senate.

    The U.S. Environmental Protection Agency (EPA) continues its regulatory duties on environmental issues with a new regulatory framework on minimizing carbon footprint launched in 2011.

    In addition, several billion dollars are being proposed by the Obama administration towards developing green energy technologies to help mitigate the effects of climate change.

    More Resources:

    Climate Change Technological Innovation

    Experts have claimed that embracing technological innovation can reduce the cost of minimizing the impacts of climate change. Egg heads in Silicon Valley are working round the clock to discover cheap and reliable clean energy that would reduce dependence on fossil fuels.

    Concerted efforts are being made to design technological systems that would make one of the commonest green energy options – solar, wind or nuclear – energy relatively cheap and reliable.

    Some of the technological innovations:

    The Organisation for Economic Co-operation and Development suggests

    Provision of long-term policy signals that are sustainable to enable potential innovators and adopters of climate mitigating technologies gain the confidence to embark on the investments.

    Placing a price on greenhouse gas emissions through tradable permits or taxes to provide incentives to complete the stages of the innovative idea.

    Provision of a mix of relevant policy measures to strengthen innovators to face all barriers to the development and diffusion of all climate change limiting technologies.

    Innovation in the energy sector

    The way in which some of these basic principles of innovation play out in practice varies radically between different sectors. Information technology and pharmaceuticals, for example, are both characterized by high degrees of innovation, with rapid technological change financed by private investment amounting typically to 10-20% of sector turnover (Neuhoff, 2005). However this offers a dramatic contrast with power generation, for example, where the same fundamental technology has dominated for almost a century and private sector RD&D has fallen sharply with privatisation of energy industries to the point where it is under 0.4% of turnover (Margolis and Kammen, 1999).

    There may be several reasons for this low inherent innovation-intensity. Processing large amounts of energy may inherently involve big capital investment and long timescales, which naturally increases risk and deters private finance; each stage in the innovation chain can take a decade, and diffusion is equally slow. Perhaps more fundamentally however, the R&Dintensive sectors (like IT and pharmaceuticals) are ones in which competition is essentially all around product differentiation (a better computer / mobile phone; a better drug) whereas innovation in power generation is basically about efficiency and price in delivering the same product (electrons). This is a far weaker driver. And compared to a new product that captures public imagination and commands a large market combined with a high price premium, price-based competition has dramatically less scope for offsetting big risks against the prospect of huge rewards.

    More Resources on climate change and technological innovation:

    Creating a Global Price for Carbon

    Carbon pricing which is also known as cap-and –trade is the climate change mitigating measure most preferred by business leaders and economists .

    This strategy of curbing greenhouse emissions is hinged on the idea that those who emit carbon dioxide and pollute the atmosphere should be made to pay a price for their actions. Carbon pricing is either a direct carbon tax or an allowance paid for permits to emit carbon. Where a permit is granted, it is tradable privately and emissions are limited to the cap (the total number of permits granted), hence, carbon pricing is also cap-and-trade system of minimizing carbon emissions.

    A few international businesses like Walmart, Google and Shell have started introducing the use of internal carbon pricing into their investment planning as an incentive and a tool for strategic planning that could give them competitive edge in the long-term. Though internal carbon pricing being practiced now by a few global companies won’t significantly lead to a reduction in global emissions yet it is a good decision that would create significant impact if embraced on scale.

    Monetary Value of Carbon Emissions

    A recent World Bank report shows that 39 national and 23 sub-national jurisdictions have implemented or about to implement carbon pricing strategies that includes carbon taxes and emissions trading systems. In addition, the global emissions trading schemes have been estimated to be worth around $30 billion with the second largest carbon pricing market now sited in China with about 1, 115 million tons of CO2 emissions.

    The World Bank reported the total value of the global carbon market to be $176 billion in 2011 which illustrates a rapid growth rate from $11 billion reported for 2005 . Countries, companies and sub-national jurisdictions around the world are being encouraged by the World Bank to be a part of the growing movement that supports carbon pricing.

    More resources on pricing carbon

    Transitioning to a Low Carbon Economy

    There are great opportunities and enormous challenges ahead as the world strives to transition to a low-carbon economy. In the first instance, the emerging eco-friendly technological innovations will present an opportunity for commercialization which can further catalyze global economic growth while also carving out a niche market.

    On the other hand, it will require a significant capital investment to transition from the present state where the global economy is largely dependent on carbon energy supply. The challenge is even greater when we consider the extent of the transition we will have to undergo from our present state.

    To give you an order of magnitude of the capital required, the International Energy Agency (IEA) estimates we need $10.5 trillion in incremental investment globally in low-carbon energy technologies and energy efficiency by 2030. This estimate is across all sectors, including power, transport, residential and commercial building equipment, and industrial sectors, in order to limit global temperature increases to 2 degrees Celsius, the threshold that the United Nations Intergovernmental Panel on Climate Change has identified as necessary for “avoiding catastrophic climate change.”

    The literature after the IPCC’s Third Assessment Report explored in much more depth the role of technological change in economic modelling and how policies might induce and accelerate such change. The models suggest that international coordination could lead to faster technological change and more benefits. In particular, the Innovation Modelling Comparison Project (IMCP)1 co-ordinated modelling teams in a study of the achievement of 450 ppm CO2-only stabilisation, which (under special assumptions about the abatement of the non-CO2 GHGs) can be converted to 550 ppm CO2-e. The key feature of the study is that it compared scenarios with and without induced technological change (ITC).


    There are three central aspects of the problem:

    Urgency – the critical constraint on avoiding a 2ºC degree warming will be the time taken to develop and deploy the industries of the low-carbon economy.

    The Catch 22 of low-carbon industrial development – many zero and low emission commodities are currently low volume and therefore high cost. They will naturally increase in volume and decrease in cost – even to the point of being cheaper than fossil fuels (as has already occurred with solar hot water, biomass and wind power in several countries). But the issue of urgency means that this process has to be short-circuited so that high volumes are developed and deployed even at high cost.

    Developing countries are where the climate challenge will be won or lost, but the deployment of high cost, low-carbon solutions represents a real opportunity cost compared to short term poverty eradication, and a competitive disadvantage to third party funders.

    Addtional resources, papers and discussion on transition to low carbon economy:


    Committee on Surface Temperature Reconstructions for the last 2, 000 years, Board on Atmospheric Sciences and the Climate, and Division on Earth and Life Studies (2006). Surface temperature reconstructions for the last 2, 000 years, National Academies Press, Washington DC.

    Kaufman, D.S., Schneider, D.P., McKay, N.P., Ammann, C.M., Bradley, R.S., Briffa, K.R., Miller, G.H., Otto-Bliesner, B.L., Overpeck, J.T., Vinther, B.M., and Arctic Lakes 2k Project Members (2009). Recent warning reverses long-term Arctic cooling, Science 325, 1236-1239.

    Mann, M.E., Zhang, Z.H., Hughes, M.K., Bradley, R.S., Miller, S.K., Rutherford, S., and Ni, F. B. (2008) Proxy-based reconstructions of hemispheric and global surface temperature variations over the past two millennia, Proceedings of the National Academy of Sciences of the United States of America 105, 13252-13257.

    The 2007 Report of the Intergovernmental Panel on Climate Change (IPCC) to the United Nations.

    Scientific Consensus on Climate Change.

    William Collins, Robert Colman, James Haywood, Martin R. Manning and Philip Mote (2008): The Physical Science behind Climate Change.

    National Geographic: Sea Level Rise.

    Climate Institute: Oceans and Sea Level Rise.

    Strategic Environmental Research and Development Program (SERDP): Climate Change and Impacts of Sea Level Rise.

    Carl Zimmer (2010): A Looming Oxygen Crisis and its Impact on World’s Oceans.

    Graeme C. Hays, Anthony J. Richadson, and Carol Robinson (2005): Climate Change and Marine Plankton.  Trends in Ecology and Evolution Vol. 20 No. 6 June 2005.

    Lawrence H. Goulder and William A. Pizer (2006): The Economics of Climate Change. National Bureau of Economic Research.

    Robert Mendelsohn (2009): Climate Change and Economic Growth. A working paper produced by the Commission on Growth and Development.

    Sathaye, J. et al. (2007). "Sustainable Development and Mitigation" in B. Metz et al. Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, UK, and New York, N.Y., U.S.A.

    Smith, J. B.,  et al. (2001). "Vulnerability to Climate Change and Reasons for Concern: A Synthesis. In: Climate Change 2001: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Third Assessment Report of the Intergovernmental Panel on Climate Change (J.J. McCarthy et al. Eds.)". Cambridge University Press, Cambridge, UK, and New York, N.Y

    Pearce, D., W. Cline, A. Achanta, S. Fankhauser, R. Pachauri, R. Tol, and P. Vellinga. 1996. “The Social Cost of Climate Change: Greenhouse Damage and the Benefits of Control.” In Climate Change 1995: Economic and Social
    Dimensions of Climate Change. Intergovernmental Panel on Climate Change. Cambridge, UK: Cambridge University Press

    Stern, N. 2006. The Stern Review Report: The Economics of Climate Change. London:
    HM Treasury.

    Robert Mendelsohn (2009): Climate Change and Economic Growth. A working paper produced by the Commission on Growth and Development.

    Boko, M.,  et al. (2007). M. L. Parry et al. Eds., ed. "Africa. In: Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change". Cambridge University Press, Cambridge, UK, and New York, N.Y. pp. 433–467.

    Hope, C. (14 January 2005),  "Economic Affairs – Minutes of Evidence (HL 12-II), 18 January 2005",  Memorandum by Dr Chris Hope, Judge Institute of Management, University of Cambridge (low-resolution html). High-resolution PDF version: pp.24-27. In: HOL 2005. Referred to by: Yohe, G. W.,  et al., Ch 20: Perspectives on Climate 

    Fisher, B. S.,  et al., ‘Issues related to mitigation in the long-term context’ Sec 3.1 Emissions scenarios

    Rogner, H.-H.,  et al., "1. Introduction", Total GHG emissions

    Munasinghe, M.,  et al., Applicability of Techniques of Cost-Benefit Analysis to Climate Change

    Banuri, T.,  et al., Equity and Social Considerations", 3.3.3 Patterns of greenhouse gas emissions.

     USGCRP (2009). Global Climate Change Impacts in the United States Karl, T.R., J.M. Melillo, and T.C. Peterson (eds.). United States Global Change Research Program. Cambridge University Press, New York, NY, USA.

    Gunther Fischer, Klaus Frohberg, Martin L. Parry, Cynthia Rosenzweig: The Potential effects of climate change on world food production and security. Natural Resources Management and Environmental Department

    Canada’s Action on Climate Change

    Rosenzweig, C., M.L.Parry, G. Fischer, and K.Frohberg, 1993. Climate Change and World Food Supply. University of Oxford.

    Agriculture Breakout Session:

    Joseph H. Casol, Jennifer E. Kay, Amy K. Snover, Robert A. Norheim, Lara C. Whitely Binder (2005): Climate Impacts on Washington’s Hydropower, Water Supply, Forests, Fish, and Agriculture.

    CCSP (2008). Analyses of the effects of global change on human health and welfare and human system. A Report by the U.S. Climate Change Science Program and the Subcommittee on Global Change Research. Gamble, J.L. (ed.), K.L. Ebi, F.G. Sussman, T.J. Wilbanks, (Authors). U.S. Environmental Protection Agency, Washington, DC, USA.

    USGCRP (2009). Global climate impacts in the United States. Karl, T.R., J.M. Melillo, and T.C. Peterson (eds.). United States Global Change Research Program. Cambridge University Press, New York, NY, USA.

    NRC (2010). Adapting to the Impacts of Climate Change. National Research Council. The National Academies Press, Washington, DC, USA.

    California Department of Health. Vector-Borne Diseases and Climate Change.

    P.R. Woodhouse. Why Do More People Die in Winter?

    Stacie Stukin, ‘’The Low Carbon Diet’’, Time Magazine, Oct.30, 2006., 8599, 1552237, 00.html

    Felicity Carus. UN urges global move to meat and dairy-free diet. The Guardian, 2 June 2010.

    Brunnermeier, S.B. and M.A. Cohen (2003), ‘’Determinants of environmental innovation in US manufacturing industries’’ Journal of Environmental Economics and Management, Vol. 45. pp. 278-293. 

    Robert Kunzig in Meridian Mississippi National Geographic: Clean Coal Test: Power Plants Prepare to Capture Carbon.

    Andy Jones et al., (2013) The Impact of abrupt suspension of solar radiation management (terminal effect) in experiment G2 of the Geoengineering model Intercomparison Project (GeoMIP).

    Lenny Bernstein (2013). Sicentists studying solar radiation management as a way to cool planet. Washington Post.

    Promoting Technological Innovation to Address Climate Change. Organisation for Economic Co-operation and Development.

    Why Business Leaders Support a Price on Carbon. World Bank Feature Story August 11, 2014.

    State and Trends of the Carbon Market 2012; World Bank


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