The Economy

Agriculture and Forestry

Many Midwestern states in the U.S. have already been affected by agricultural changes.  Increased flooding has caused economic losses of livestock and fields.  As production decreases, prices of animal feed and ethanol are expected to rise.  In addition, as increasing temperatures decrease crop yields, farmers will likely increase prices, affecting businesses and consumers. 

Businesses 

The frequency and intensity of extreme weather can disrupt supply chain operations, factories, and transportation.  For example, drought will likely increase the value and cost of water, raising the price of raw materials and production.  More drastically, businesses, such as skiing or coal mining, may be wiped out entirely in some areas.  A study done in 2018 by the Carbon Disclosure Project found that 215 of the world’s 500 largest companies could lose $1 trillion due to climate change, beginning within 5 years, unless preemptive measures were taken. 

Health and Productivity

Extreme temperature-related deaths alone are projected to cost the U.S. $140 billion annually.  Also, a decrease in labor hours could result in a $160 billion loss in wages. 

Tourism

A decrease in tourism in the winter due to less snow and ice could lead to a two billion dollar loss for the U.S., affecting mostly local economies dependent on it.  Wildfires, worsened air and water quality, the submersion of islands and coasts, and deforestation all are making tourist destinations less attractive, harming local and international economies. 

Global Impacts

Poorer countries and people will suffer first and more extreme consequences.  Poorer nations tend to have warmer temperatures and more variable rainfall already, and further warming will only bring higher costs and little benefits.  In addition, land degradation threatens more than 3.2 billion people around the world, many of whom live in poor regions, which tend to be more dependent on agriculture.  The lower incomes of poorer countries and people also make them less able to adapt and adjust to climate and agricultural changes.   Based on research done by the Swiss Re Institute, Asian economies will be hit the hardest, with a 5.5% decrease in GDP in the best case (2.0°C increase by 2050), and 26.5% in the worst (3.2°C increase by 2050).  Regional variation within this data shows South Asian Nations suffering the most, while advanced Asian economies are less affected.  Even at 2.0°C, the economic growth of Malaysia, the Philippines, and Thailand would be limited by 20% by 2050.  Similarly, the study shows a 4.7% drop in the best case scenario for the Middle East and Africa, and a 27.6% in a severe case scenario.