Climate change due to global warming will affect agriculture, fisheries, and tourism such as skiing. Furthermore, the amount of damage caused by extreme weather is expected to increase, leaving the insurance industry unable to cope. If agricultural yields decline, global food shortages will occur, prices will rise, and life will become difficult. There is also the concern that climate change will increase energy consumption, and possibly trigger even greater problems throughout society.

Most economic forecasts to date have not included the effects of global warming, even those that look five or so years into the future, because the economic impact was thought to be negligible. But that approach is outdated.

A study published in 2020 found that a 3°C rise in temperature by 2100 could result in a 21% decrease in global GDP.

For us to exist on Earth, we first need a livable environment. From this foundation we can build a society with a minimum level of security. With a society in place, an economy can also be established. If climate change caused by global warming destroys the global environment, neither a secure society nor stable economic activities will be possible.

In 2019, Typhoon No. 19, struck Japan causing approximately 1.6 trillion yen in damage. Of that amount, 340 billion yen was related to agriculture, forestry, and fisheries. A single giant typhoon can cause this amount of economic damage to our society. Economic losses due to natural disasters such as storms, heat waves, and floods amounted to nearly 3 trillion dollars worldwide over the 20-year period between 1998 and 2017. Amongst all countries, Japan ranks third in terms of losses accumulated over this period. Also, in 2019, the International Labor Organization reported that if the current trend continues to 2030, there will be an additional economic loss of about 250 trillion yen due to heat alone.

The effects of global warming are shared by the entire world. People in poorer countries stand to suffer the most, even though they are not themselves are not directly involved in causing global warming. When climate change causes damage, the poorer the country, the greater will be the economic costs.

episode 13
The Increasing Economic Impact of Climate Change