Global warming will be the core topic of this research. In essence, global warming encompasses sudden changes in temperature of the earth's climate system. According to various scientific reports, the earth's temperature has been rising over the years. Contrary to the increasing degree of heat in the atmosphere, scientists have also discovered that the additional energy contained in the climate system has been dissipated into the oceans and other large water bodies. In the process, the melting of the ice warms the atmosphere and continents, which accelerates global warming.
The adverse implications caused by global warming continue to elicit many research and debate among scientists and environmentalists. The Intergovernmental Panel on Climate Change (IPCC) reiterated that human activities were the core catalysts of global warming in 2014 (Miller 8). Due to the detrimental effects of global warming on the social, economic, and political development of a nation, most countries have embraced sustainable environmental practices and introduced appropriate legislations to reduce the amount of pollutants emitted into the atmosphere. Without proper intervention measures, global warming will not only cause severe economic consequences but will also culminate into an imbalanced and unsustainable ecosystem.
Hypothesis and Literature Review
Economists and scientists predict serious environmental implications if people fail to mitigate the risks of global warming.
Authors Main Points and their Economic Translation
According to the research by Tol, global warming results in a massive destruction of property and infrastructure (30). For instance, this environmental condition increases the sea level, causes drought, wildfires, and catastrophic storms. Moreover, it leads to the obsolescence of infrastructures such as roads, railways, homes, power lines, and bridges. In most countries, infrastructural networks are essential constructs of economic growth and development. From an economic perspective, a destruction of these facilities limits the overall output, which in turn, reduces the Gross Domestic Product (GDP).
Furthermore, Tol discovered that global warming contributes to lost productivity, which is detrimental to economic advancement (31). In effect, this climatic condition interferes with daily life activities such as school work and trade, which are vital for the economic progression of a nation. Additionally, the extreme and unfavorable weather caused by global warming impairs transportation, agriculture, fisheries, and energy production, which are the core activities that define the economic advancement of a region. For instance, intense rain and snowfalls can cause power failures, traffic congestion, and delays in sowing and harvesting (Miller 10). As well, unfavorable weather conditions can cause inconveniences in air transportation, which is a primary method used by traders to move their products and services from one region to another. Health implications resulting from extreme weather conditions can also minimize the effective performance of the workforce. From an economic viewpoint, these scenarios reduce productivity that hinders the overall economic development of a particular region.
Specific References From the Textbook
According to Miller, global warming is more likely to cause mass migration and security challenges (11). In areas where the weather conditions are intolerable, people could vacate to other places to escape the adverse implications of the unfavorable weather. This relocation results in climate refugees as the homeless dessert their original homes to look for an adequate surrounding with ideal living conditions. In effect, the mass displacement of people and a disruption of the social order lead to civil unrest, which attracts military intervention (Tol 33). In most countries, such interventions are expensive due to the amount of resources required to facilitate the efficient deployment of such diplomatic relations. In a way, the civilians are forced to pay more taxes to finance such excursions, which sometimes, might be inconvenient for poor members of the society. From an economic viewpoint, increased immigration threatens the security state of a nation. As a result, it scares off potential investors that can have an immense influence on the cash inflows of a particular economy (Miller 14). Moreover, deficiencies in the security systems could climate into terror attacks, which jeopardizes major infrastructural networks that are critical for economic progress.
Despite the ability of an economy to embrace effective mechanisms that minimize global warming, it still incurs high costs to deal with this climatic condition. In fact, such expenses are high compared to the expenses incurred in accounting for such strategies. Some of the coping costs involve instances when farmers irrigate areas that experienced rain previously and rear cool vulnerable animals (Miller 16). Moreover, local and state governments could incur more expense in ensuring that every home is fitted with energy saving systems to minimize carbon emissions. In extreme cases, some nations are forced to construct sea walls, erect subways, strengthen bridges, and increase the efficiency of other transportation systems to minimize the adverse effects of global warming. An economic translation of these activities implies that a reduction of the specified expenses decreases the recurrent expenditure while at the same tome increasing the development expenditure (Tol 35). For this case, countries with increased development expenses than recurring costs experience rapid economic advancement.
From a personal perspective, I concur with the research by Miller that global warming has negative effects on the global economy (18). The consequences discussed imply that global warming limits a nation from achieving its strategic objectives, which culminates into the provision of poor goods and services. As a result, the living standards reduce, which limits the productivity of the workforce and the resultant gross domestic output. Moreover, I believe global warming causes unequal distribution of resources in an economy. Such a scenario leads to poverty due to the unequal spread of income among the population.
Particularly, areas experiencing global warming might have damaged infrastructure due to extreme rains, snow, drought, or a rapid sea-level rise. Thus, resources present in this area might be scarce due to the unavailability of a perfect platform to foster their exploitation. However, this limitation is not the case for regions with favorable temperature and other effective weather conditions. As a result, the resources become scarce, which is a potential cause of poverty (Miller 18). Finally, global warming causes inflation due to the shortage of essential goods and services, which in the end, increases the demand for them despite the reduced supply. Although most governments have formulated policies to prevent global warming, I believe human activities need close consideration since they are the primary causes of global warming.
Based on the economic consequences of global warming, this research focuses on the effect of this climatic condition on inflation. In this sense, inflation embodies the extreme increase of the prices of commodities and services over a particular period. From the literature concerning this topic, it will be evident that global warming increases the rate of inflation within a given economy. In some cases, regions with sustainable environmental practices and measures of embracing diverse climatic conditions, global warming has a minimal effect on the cost of commodities of goods and services, which reduces its connection to inflation.
According to most current literature on global warming and inflation, this climatic condition is likely to influence economic progress in the end. Despite the existence of winners and losers from climatic variation at different levels of warming, the influence of increasing temperatures is still widespread due to the financial, political, and economic integration of various economies. As stated earlier, global warming interferes with economic growth as it causes a destruction of infrastructure, mass migration, security challenges, and reduced productivity. In a way, the uniformity among the winners and losers becomes increasingly negative as the earths temperatures increase. Tol asserts that global warming in most regions of the world enhance the frequency and severity of catastrophes, which result in the loss of property and infrastructure (36). For instance, the Hurricane Sandy that caused massive havoc in New York is an example of an extreme weather condition, which causes adverse economic implications.
In other regions, increasing seal levels is gradually becoming detrimental to economic output, which is hazardous to businesses. While the economic response to mitigate such risks is helpful in enhancing the gross domestic product (GDP) of a country, a recognition of such events as permanent environmental features pose a threat to the world economy (Miller 21). For instance, most people will consider it necessary to replace capital stock unless there exits appropriate policies to curb against future damages. In the short term, businesses relocate to accommodate the changes in economic conditions. However, a permanent loss of capital and stock occurs in the long term as the temperatures continue to rise. For this case, commercial entities succumb to economic pressures in the surrounding, which influence the prices of their products and services. In extreme cases, such a scenario leads to increase inflation rates.
Miller contends that global warming has the potential of minimizing productivity and capital stock in the global economy (23). In effect, a reduced capital stock caused by the damage inflicted by global warming leads to a decline in the production capacity of the world. Consequently, such a situation results in the downward movement in the world productive function since each labor unit culminates in a reduced output. In a way, increased global heat interferes with food security, causes health implications, and affects the efficiency of outdoor workers. As a result, it minimizes their productivity and the effectiveness to produce the desired output that offsets the current demand in the market.
According to Tol, the biggest challenge of global warming to economic advancement entails the incorporation of aggressive and inadequate mitigation policies (39). Such a situation cases an economic shift from consumption to investment. From this perspective, the government perceives the costs of inaction to be higher than mitigation expenses. A shift to an investment economy reduces the cost of capital to offer potential investors the required incentive. Thus, a reduction of the interest rates increases the circulation of money in the economy, which offers a perfect platform for inflation to thrive.
Miller observed that global warming is likely to cause shortages primarily in the agricultural sector, which accelerates the inflationary tendencies of global warming in the world economy (25). In essence, most agricultural products are sensitive to slight alterations in the weather conditions. Therefore, extreme heat is more likely to cause poor yield and shortage. From an economics perspective, scarcity of the agricultural commodities reduces their supply and increases their demand in the market. Such a situation results in the rapid increase of food prices. Moreover, increasing sea levels limits land availability, which is also a potential catalyst of inflation due to reduced productivity. Finally, Tol suggested that the energy costs incurred in embracing renewable and efficient energy systems causes inflation (41). Extreme...
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