- August 30, 2021
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The phenomenon of global warming has been extensively studied in recent decades and remains at the top of the environmental agenda of more or less all countries of the world. The Intergovernmental Panel on Climate Change (IPCC), an international scientific committee under the sponsorship of the United Nations, has been set up to monitor it and its effects.
Its effects are not just environmental. They are not limited to rising air temperatures, or the occurrence of extreme weather events. Its consequences affect every aspect of human activity, from a country’s tourism infrastructure and agricultural production to heart disease.
By the middle of the century, the average temperature of the planet will increase; the average rainfall will decrease, while the sea level will rise significantly. Climate change is a global phenomenon, extremely important and unfortunately, in progress.
However, the feeling that the poorest people in the world are suffering the most is not wrong. In terms of per capita income, the figures may show large losses in rich economies, but in terms of day-to-day effects, the effects on underdeveloped and developing economies are dramatic. Lack of access to drinking water and food crises are the “normality” that their citizens face and which is exacerbated by climate change.
According to a 2020 study conducted by Christian Aid, climate change is now having a disproportionately large impact on the food adequacy of those countries that are less responsible for pollutant emissions and global warming. The world’s hungry are suffering from climate change without causing it. The 10 countries with the highest rates of malnutrition all produce less than half a ton of CO2 per capita and account for only 0.08% of global pollution. The top ten includes Burundi, the Democratic Republic of the Congo, Madagascar, Yemen, Sierra Leone, Chad, Malawi, Haiti, Niger and Zambia.
In a report, the International Labor Organization (ILO) warns that 1.2 billion jobs depend entirely on a stable and healthy environment. The agricultural sector, fisheries and forestry are facing the greatest impacts of climate change, but they are not the only ones affected. The impact on tourism, but also on health services, is also strong.
According to ILO experts, the profit from achieving the goals of the Paris Agreement will be 18 million jobs. Although 6 million jobs will be lost, 24 million new ones will be created, which will ensure a fair transition. An additional 6 million jobs can be created by the adoption of the so-called circular economy.
This is a new trend in the production and consumption process that has already launched new investments of 550 billion euros in Europe and aims to reduce the footprint of economic activity in raw materials and the environment.
It focuses on reducing the waste of resources used in the production process, emphasizing the utilization of renewable resources, plant and animal by-products and biodegradable materials, the recovery and reuse of products, but also the production of energy from waste production processes, conservation of a product in good working order for a long time and the economic utilization of products to provide services to multiple users.
At the same time in India millions of poor people are finding it increasingly difficult to find drinking water as large areas suffer from severe drought.
To understand the ways in which businesses around the world are dependent on climate change, one must look in the long run: extreme weather events are capable of destroying infrastructure and disrupting the productive cycles of any industry, from agriculture and livestock up to travel and tourism. Even if the affected areas seem to be far from your business, the global consequences are not insignificant: migration for environmental reasons and social unrest can lead to economic and political instability in many parts of the world.
Although it is very difficult to accurately predict the extent to which the global economy will be hit and many studies have come to different conclusions, it is clear that companies have an important role to play in maintaining the economic stability. Typically, one of the most important surveys conducted to analyze the economic losses and opportunities that will arise – the Stern report – states that well-timed action to reduce greenhouse gas emissions would require only 1-2% of the global Gross Domestic Product, while the costs of the effects of inaction could reach 20% of Gross Domestic Product.
And while the Stern report was published some years back, more recent research shows that we still have a long way to go. Very few companies are making long-term plans to reduce emissions and protect the environment. Nearly half of the companies are unable to work with their supply chains to develop a common environmental strategy. According to the Climate Vulnerability Monitor: A Guide to the Cold Calculus of a Hot Planet conducted by DARA, climate change (combined with other harmful effects of carbon offsets) is already causing losses of 1.6% of global GDP, which translates to $1.2 trillion a year and a human cost of 400,000 lives. By 2030 it is estimated that this percentage will reach 3.2% of world GDP. 250 million people are affected by rising water levels, 30 million by extreme weather events – especially floods – 25 million by melting ice and 5 million by desertification. According to the same research, the cost of inactivity in human lives is estimated at 100,000,000 by the end of the next decade.
The dilemma of development or prevention to deal with the effects of climate change no longer arises. It is understandable that the biggest cost for a business in the long run, is the inaction of the present.