Global Warming Effects on the Economy

Winners and Losers

Polar bear
United States, Alaska, Arctic National Wildlife Refuge, Kaktovik, polar bear (Ursus maritimus). Photo: CORDIER Sylvain / Images

Definition: Global warming is the rising average temperatures of the world's atmosphere and oceans. The warmest 30-year period in the Northern Hemisphere over the last 1,400 years was between 1983 and 2012.  Each of the past 16 years was among the warmest on record. 

How much has it warmed? Between 1970 and 2015, the average earth's temperature rose 0.17 degrees Celsius per decade. This might not seem like much, but it was three times the rate for 1880 to 1970.

Temperatures in colder zones rose twice as fast as the average in the prior 100 years. In Alaska, they’ve risen 2 degrees Celsius between 1958 and 2008. (Source: "Climate Change: Global Temperature,", April 19, 2017.)

Glaciers in Antarctica were losing their mass at an "unusually rapid" rate. Satellite pictures taken between 1992 and 1996 showed that the Pine Island Glacier lost thickness at a rate of 1.6 meters per year. That’s 42 times faster than 3.8 centimeters annual loss over the last 4,700 years. (Source: “New Research Confirms Antarctic Thaw Fears,” Der Spiegel, March 7, 2008.)

Melting ice caps are one reason sea levels are rising. They’ve increased 3.1 mm each year between 1993 and 2003. That's double the 1961-2003 rate. (Source: Intergovernmental Panel on Climate Change, 2014.)

Does Man Cause It?

A large number of scientific and government organizations have agreed that global warming is caused by a manmade increase in greenhouse gasses.

These include carbon dioxide, hydrofluorocarbons and perfluorocarbons. These gasses sit in the earth's atmosphere and prevent the sun's radiation from going back into space like normal. The heat builds up like it does in a greenhouse.

Current levels are at 370 parts per million volume, up from 280 ppmv 100 years ago.

These gases are released by deforestation, factory farming, industrial procedures like aluminum smelting and the burning of oil in all its forms. (Source: "Global Warming FAQ," Union of Concerned Scientists.)

Who Benefits?

The colder areas of the U.S. farm belt will receive a longer growing season. Alaska could become open to new development. The same goes for Scandinavian countries. Already, the growing season in Greenland is two weeks longer than in the 1970s. Washington, DC has an earlier tourist season, as the cherry trees have started blossoming a week earlier than 20 years ago.

Russia and Canada might become the biggest benefactors because they have the largest frozen land masses. That could significantly change the balance of power.

Shippers along the Northwest Passage will benefit from the melting ice cap. New channels will create cheaper shipping costs.

Who Loses?

Forests throughout the United States have been suffering for years. A shorter winter means that many pests, such as the pine bark beetle, are not dying off in the winter. As a result, they are killing millions of trees. Warmer summers have led to an increase in forest fires. The dead trees have increased the intensity of these fires, leading to destruction of timber and danger to people, property and wildlife.

(Source: Intergovernmental Panel on Climate Change, 2014.)

Longer summers have lengthened the allergy season. Asthma and allergy sufferers will pay for increased health care costs. Stanford University professor Mark Jacobson estimated that 1,000 people would die from air pollution for every 1 degree Celsius rise in global temperatures. (Source: "Health Risks Heating Up?", April 21, 2008.)

The National Academy of Sciences predicted that melting ice caps will cause the ocean to rise at least four inches by 2100. That would be enough to flood coastal Florida and the Carolinas. It said that waters could rise as much as four feet. That would be enough to wipe out Shanghai, Hong Kong, the Netherlands and Bangladesh.

Warmer and rising oceans could shift the North Atlantic current away from Europe.

Most of Europe is north of the state of Maine. Without the warm waters of the current, Europe will become as cold as Newfoundland.

Increased Hurricanes Cost Billions

Many experts believe that global warming increases the size and frequency of hurricanes and other extreme weather events. In 2005, Hurricane Katrina created $125 billion in damage, with $66 billion in insured losses. It caused GDP to decline from 3.8 percent in Q3 to 1.3 percent in Q4 2005. In 2008, Hurricane Gustav and Hurricane Ike hit the United States. Though they did not cause as much damage, they support the trend of more frequent and more severe hurricanes caused by global warming.

In 2012, Hurricane Sandy flooded New York City at its 500-year flood mark. It cost $50 billion in damage. On a personal note, flood insurance could increase by $2,000 per person per year. (Source: "Coping With Trump and Climate Change," The West Side Spirit, April 14, 2017.)

Does America Really Want to Curb Global Warming?

An article in Der Speigel observed that the Nobel Committee awarded Al Gore a Peace Prize to send a signal to U.S. policy makers. It warned the U.S. economy to live within its means. 

But the Gore factor is having its most powerful effect in a sphere beyond partisan politics, penetrating deep into the insecure American middle class. Its way of life – and this is the real message behind the Nobel Committee's decision – is no longer sustainable.

(Source: "The Al Gore Factor," Der Spiegel.) 

In 2016, America's "insecure middle class" rebelled against the "Gore factor." It elected Donald Trump to the presidency. On June 1, 2017, he announced that the United States would withdraw from the Paris Climate Accord. His 2018 budget slashed funding for climate change research. It cut the Environmental Protection Agency's budget by 31 percent. He ordered the EPA administrator to reverse standards on tailpipe emissions. (Source: "Trump Lays Plans to Reverse Obama's Climate Change Legacy," The New York Times, March 21, 2017.)

In 2007, the Department of Energy invested $1 billion to spur the biofuels industry to reduce greenhouse gases. Last year, over 100 biofuel factories produced 6.4 billion gallons of ethanol using 18 million acres of corn. This was 20 percent of total U.S. corn production, which drove corn prices to a record $4 per bushel. Since most of corn production is used to feed livestock, this caused food prices to increase four percent. (Source: "Biomass 2008: Fueling Our Future," Department of Energy, April 2008. "The Price of Biofuels," MIT Technology Review, January/February 2008.)

Many believe sustainable practices will hinder economic growth. But others, like Newt Gingrich in his book A Contract with the Earth, argue that environmental sustainability and economic prosperity are far from mutually exclusive. In fact, "if environmental quality declines enough, the economy won’t be able to function at all.”

What You Can Do

If you want to support efforts to reduce global warming, there are some simple steps you can take. Cut your heating bill by living in a small house and ensuring it has good insulation. Buy EnergyStar home appliances. Eat less meat. Purchase more local products to cut down on emissions from shipping. Turn off lights and unplug appliances when not in use. 

The way you drive and maintain your car can significantly improve mileage. Keep the tires inflated, change the air filter, accelerate slowly after a stop, and drive under 60 miles per hour. That will reduce your emission of greenhouse gases. For more great tips, see "Mean Machine," The Economist, April 9, 2007.