Economic impacts of climate change

Changes in temperature and precipitation patterns, as well as increased frequency of extreme weather events, are affecting crop yields and livestock productivity. This can lead to higher food prices, food scarcity, and reduced income for farmers, especially in regions where agriculture relies heavily on natural rainfall.

The increased prevalence of heatwaves, air pollution, and vector-borne diseases can lead to higher healthcare costs. Heat stress and new patterns of diseases can strain public health systems and increase mortality and morbidity rates.

Extreme weather events such as storms, floods, and sea-level rise can cause significant damage to infrastructure, including roads, bridges, buildings, and energy supply systems. The costs of repairing or replacing infrastructure and the associated economic disruptions can be substantial.

Climate change can alter energy demand patterns, with increased demand for cooling during hotter summers and potentially decreased heating needs during milder winters. This shift can affect energy prices and the stability of energy supply systems.

The increased risk of natural disasters can lead to higher insurance premiums and greater financial losses. Some areas might become uninsurable due to extreme risks, affecting property values and investment decisions.

Tourism can suffer in areas affected by extreme weather, heatwaves, or ecological degradation, such as coral bleaching or loss of glaciers. Conversely, some regions might see an increase in tourism due to milder climates.

High temperatures can reduce labor productivity, particularly in outdoor and non-air-conditioned environments, affecting sectors like construction, agriculture, and manufacturing.

Changes in ocean temperatures and acidity can impact fish stocks, affecting the livelihoods of fishing communities and leading to economic losses in the fishing industry.

Forests are vulnerable to increased wildfires, pest outbreaks, and diseases, which can affect timber supply and the forestry industry.

Altered precipitation patterns and reduced snowpack can lead to water scarcity, affecting industries that rely on water, such as agriculture, power generation, and manufacturing.

Areas prone to flooding, wildfires, or sea-level rise may see a decrease in property values, while areas less affected by climate impacts may see their values increase.

Climate change can contribute to social unrest and conflict by exacerbating resource scarcity. It can also lead to displacement and migration, which can have economic impacts on both the regions people leave and the regions to which they move.

Investing in adaptation measures to protect against climate impacts, such as building sea walls or upgrading infrastructure, requires significant financial resources. Similarly, transitioning to a low-carbon economy involves costs associated with changing energy systems and industrial processes.

The overall impact of climate change on economic growth and development can be negative, particularly for developing countries that are less able to cope with the changes. It can exacerbate poverty and hinder development goals.