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Effects of Global Warming on the Economy

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Depiction of New York if the seas rise due to global warming.

Photo: Images Etc Ltd/Getty Images
hurricanes

Global warming results in more frequent and larger hurricanes.

Photo: NOAA
tornado

Tornados could become more destructive thanks to imbalances caused by global warming.

Photo: NOAA

What Is Global Warming?:

Global warming is, quite literally, when temperatures of the world's atmosphere rises. Between 1956-2005, the average earth's temperature rose .13°C per decade. This might not seem like much, but it was double the rate for the 100 years from 1906 to 2005. Temperatures in colder areas, like the Arctic, rose twice as fast as the average.

The increase of temperatures on the land doesn't tell the full story. That's because the ocean absorbed 80% of the heat. This resulted in the ice caps melting at a rate of 2.7% per decade since 1978. it also caused sea levels to rise at an average rate of 3.1 mm per year between 1993-2003, nearly double the rate between 1961-2003. (Source: IPCC Climate Change 2007)

Research on global warming in Antartica confirmed that its glaciers 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.

Research done by the British Antarctic Survey revealed that the average rate over the last 4,700 years was only 3.8 centimeters a year. In other words, the glacier was losing mass at a rate 42 times faster than the average over the preceding 5,000 years. (Source: Der Spiegel, “New Research Confirms Antarctic Thaw Fears,” March 7, 2008)

What Causes Global Warming?:

A large number of scientific and government organizations have agreed that global warming is caused by a man-made increase in greenhouse gases, which include carbon dioxide, hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). These gases sit in the earth's atmosphere, absorbing the sun's radiation. Current levels are at 370 parts per million volume (ppmv), up from 280 ppmv 100 years ago. These gases are released by deforestation, factory farming, and the burning of oil in all its forms. (Source: About.com, Global Warming FAQ)

What Are the Positive Effects of Global Warming on the U.S. Economy?:

In the colder areas of the U.S. farm belt, global warming allowed a longer growing season. Polar caps melting along the the Northwest Passage allowed for cheaper shipping costs.

What Are the Negative Effects of Global Warming on the U.S. Economy?:

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. (Source: IPCC Climate Change 2007)

Longer summers have led to an increase in the allergy season and increased health care costs for asthma and allergy sufferers. In addition, increased air pollution kills 1,000 U.S. residents for every 1°C increase in temperatures. (Source: AmMedNews.com, "Health risks heating up?" April 21, 2008)

Increased Hurricanes Cost U.S. Billions:

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

How Do Efforts to Curb Global Warming Affect the U.S. Economy?:

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 that global warming means the U.S. economy must begin 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.
(See Der Speigel, The Al Gore Factor) The article raises the point that the U.S. economy is unsustainable both financially and environmentally. The argument is supported by the following facts:
  • The budget deficit and looming crisis in Social Security and health care costs have been well documented, and remain a concern for 2010 and beyond.
  • The U.S. owes over $8 trillion in debt. It would take over a year and a half of total U.S. production to pay it back.
  • The U.S. current account deficit was $856 billion in 2006. The massive foreign holdings of Japan, China and the oil-producing countries means that the U.S. economy is living on borrowed money.

Of course, if our financiers all came calling at once, it would destroy both the U.S. and the global economy. However, these countries are, in fact, slowly diversifying out of U.S. Treasuries, puts a damper on U.S. economic growth. The first effect has been this year's decline in the value of the dollar.

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% 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: Department of Energy, Biomass 2008: Fueling Our Future, April 2008; MIT Technology Review, The Price of Biofuels, January/February 2008)

If you want to support efforts to reduce global warming, the way you drive and maintain you 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.. For more great tips, see The Economist, Mean Machine, April 9, 2007

Article updated September 20, 2008

 

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