NEP-Economic Impact Global Worming

8/7/2019 NEP-Economic Impact Global Worming

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ECONOMIC IMPACT OF GLOBAL WARMING IS NOT A HOAX

A report submitted for internal assessment of

NATIONAL ECONOMIC PLANNING

Under the guidance of

Prof. ANKIT GHAI

PREPARED BY

Roll no. Name

10 Mr. Charan Rana

18 Ms. Kirti Janghu

35 Mr. Rajnish Bhoriya

43 Ms. Rubina Virdi

45 Ms. Sarla Yadav

49 Ms. Sonia Yadav

IIPM TOWER-1, BUILDING NO.79

GURGAON-122001 (HARYANA)


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ACKNOWLEDGEMENT

We thank Mr. Ankit Ghai in particular for assigning us this topic and

encouraging us to write in the first place. We owe much to him for his helpful

comments.Mere words will never be able to express the gratitude towards him,

who not only stimulated the idea of undertaking the project, but also interactedwith us frequently giving valuable advice during critical stages of work.

We are indebted to all those who have been helpful throughout the

process of writing this Report but as the clich goes, we are solely responsible for

any remaining errors of fact or judgment. Finally we would like to be grateful to all

those who directly or indirectly have been of great help and obliged us with their

support and have helped us in converting our collection of data and informationinto a finely polished project.


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ABSTRACT

We have all probably heard about the devastating physical effects thatglobal warming is projected to cause in the coming years. The basic effectsenumerated by most scientists include the warming of the earth, which will causevarious regional climate changes as well as a rise in sea level.

Indeed, it is projected that global warming will cause a number ofdevastating weather changes, including an increase in floods, drought, hurricanes,

earthquakes, tsunamis, and various other severe weather pattern. But did you knowthat global warming, if left unheeded and unchecked, may also cause several

devastating economic effects?

If the pattern of development of global warming continues as it has been,it seems doubtless that global warming will not only be a major physical event, butalso a major economic event in which several regions are devastated financially.

Here is a brief analysis of the potential economic effects that global warming maycause in several regions of the world.


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CONTENTS

1. Acknowledgment

2. Abstract

3. Introduction

4. Economic commission for Africa5. Warming called threat to global economy

6. Insurance company worried about global warming

7. Report on Indian impact

8. Kyoto protocol

9. Copenhagen summit

10.Cancum climate summit

11.Health effects

12.

Tourism13.Fishing facts

14.Conclusion

15.Bibliography


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ECONOMIC IMPACT

We have all probably heard about the devastating physical effects thatglobal warming is projected to cause in the coming years. The basic effectsenumerated by most scientists include the warming of the earth, which will causevarious regional climate changes as well as a rise in sea level.

Indeed, it is projected that global warming will cause a number ofdevastating weather changes, including an increase in floods, drought, hurricanes,

earthquakes, tsunamis, and various other severe weather pattern. But did you knowthat global warming, if left unheeded and unchecked, may also cause several

devastating economic effects?

If the pattern of development of global warming continues as it has been,it seems doubtless that global warming will not only be a major physical event, butalso a major economic event in which several regions are devastated financially.

Here is a brief analysis of the potential economic effects that global warming maycause in several regions of the world.

By far, the economic sector most affected by global warming will be theagricultural sector. This is because global warming is projected to cause seriousdisruptions in the weather, which will have a domino effect on other factors. Morespecifically, it is predicted that global warming will seriously affect the number ofrainfall that certain agricultural regions receive yearly. Without rainfall, agriculture

is simply impossible.

In the United States, it is projected that the American Southwest as well asthe entire arid Western United States will receive little rainfall. The drought willgrow longer and more severe until agriculture is no longer viable. Longer and moreintense wildfire seasons are also predicted for this area of the United States, which

will further compromise the ability to do agriculture in that area. Furthermore, adrought will lead to the loss of land, resulting in a scenario resembling thedustbowl of 1930s Depression-era America.


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In other areas, the opposite scenario may prove true: too much rainfall,leading to flooding. This will also make agriculture a challenge, if not impossible.Moreover, other areas with agriculture may also suffer from the extreme weatherwrought by global warming; this will devastate the agricultural sectors of manyregions around the world.

It is projected that as global warming continues to develop, some regionswill experience much wetter seasons, while other climates will experience muchdrier seasons. Many oceanographers and other researchers also fear that this couldcause shifts in the ocean's conveyor, which in turn will cause sudden shifts in landtemperatures.

Keeping these things in mind, it becomes clear that without some kind that aworld dominated by the effects of global warming lacks the ability to sustain anorganized and constantly flowing supply of agriculture, making the economic costs

of global warming too great to predict. However, it is clear that if no immediatesteps are taken by world leaders, global warming could prove much more than justan economic threat.

Report by Mr. Abdoulie Janneh, UN Under Secretary-

General and Executive Secretary of the Economic

Commission for Africa

Africa is widely acknowledged to be the most vulnerable region to theimpact of climate although it contributes less than 4% of global emissions. Theimpact of climate change in Africa will be through higher temperatures, changingrainfall patterns, rising sea levels and extreme climatic events such as droughts and

floods.

The economic impact of climate change in Africa will cut across sectorsincluding agricultural production, energy supplies, food security, health andshelter. Rain-fed agriculture contributes 30% of GDP in most African countriesand employs up to 70% of the populace.


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"There's just a very small part of GDP" in industrialized nations "that'saffected by weather in a direct or indirect way," said Jerry Taylor, a senior fellowat the libertarian Cato Institute, which accepts some contributions from fossil-fuelcompanies. "It's very difficult to sketch out this disaster scenario."

Yale University economics professor William Nordhaus, who hasestimated that climate change will cost developed countries less than 1 percent ofGDP over the next half-century, said the Stern report "appears to be an impressiveeffort to summarize the science and economics of climate change" despite thecontroversy surrounding its projections.

The report represents British Prime Minister Tony Blair's latest effort toenlist president Bush, a close ally, in his effort to make serious cuts in carbon

dioxide emissions. Bush has declined to sign the 1997 Kyoto Protocol, which

imposes mandatory reductions in greenhouse gases on most industrialized nationsbetween 2008 and 2012.

Insurance company worried about global warming

Europe's leading insurance companies are now so worried by global warming, theyare likely to use their financial muscle to get governments and the world's oilcompanies to do more to cut greenhouse gas emissions.

A greenhouse gas conference organised by the reinsurer, Swiss Re, has beendiscussing a report backed by nearly 300 financial institutions, which argued thatglobal warming now poses a "serious threat" to the world economy.

The insurers have been drawing on the findings of the UN's Intergovernmental

Panel on Climate Change, which concluded we can no longer be in any doubt thathumans do affect the weather.

The result, say the insurers, is that in the next decade, the annual cost of globalwarming will hit $150bn a year - that's five times the annual earnings of the entirepopulation ofNigeria.


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Andrew Dlugolenski, who developed the report, said that there are now so manyassets, and so many people living in dangerous areas, like storm tracks or besidethe coast, that the economic damage from climate change is going to be huge.

The real problem will be in places like Bangladesh, some places in India likeMumbai (Bombay), Indonesia. These places are all the most exposed, because oftheir very low coast lines.

Influence

Insurers make up a big part of the financial services industry, which is not withoutinfluence since it manages $26 trillion of assets of companies, including of coursethose involved in the fossil fuel industry.

So will it use its influence to change government policies and the policies of thebig oil companies?

It may sound simple, but Europe's leading financial institutions know there are bigbarriers currently blocking any more radical action to cut greenhouse gasemissions. The barriers are both political - with countries unwilling to give upsecure supplies of energy in an uncertain international climate - and technical.

Switching fuels

Michael Marvin, president of the US business council for sustainable energy,admits that renewable energy sources will continue to make up a small proportionof energy demand for some time to come.

However, Mr. Marvin argues that America could reduce its greenhouse gasemissions dramatically simply by reducing its dependence on burning coal, whichis the dirtiest of fuel sources and yet generates 55% of America's electricity.According to Marvin, even fuel switching, from one fossil fuel to another, fromcoal to natural gas, will reduce emissions about 40% to 60% per unit of energy,

transition can be done anytime.

Mr. Marvin is critical of the decision by the world's biggest energy provider,Exxon Mobil, in the early 1990s to pull out of solar power after spending $500m

on research.


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"The idea that a marketplace can grow 30% or 40% year after year after year, acompany cannot make money in that or recognise the opportunities in that - maybethat says more about the company than the technology?"

Boycott

Exxon's rivals BP and Shell maintain active solar and wind divisions and in sodoing, have escaped much of the criticism of Exxon that has flooded in fromenvironmental groups. The lobby group, Greenpeace has launched a campaign topersuade consumers to boycott Exxon's fuel, which trades under the Esso name inEurope.

Greenpeace claims that lobbying from Exxon was behind President Bush's decisionto pull America out of the Kyoto Treaty aimed at cutting greenhouse gasemissions. Greenpeace also argues that Exxon has in the past downplayed the link

between increased burning of fossil fuels and severe weather.

Action

Gordon Sawyer, head of Exxon's public affairs in Britain, told World Business

Review their continued to be "well documented gaps in the climate science", butnonetheless Exxon took "the risk of climate change seriously".

Mr. Sawyer said that inaction was "totally inappropriate" and pointed to Exxon'sbig investment in energy efficiency in its own operations as well as the money ithas spent in cooperation with Toyota and General Motors on hydrogen-based fuelcell technology to reduce carbon emissions from cars.

The question ahead is whether Exxon's reaction to the fears about climate change -described by Mr. Sawyer as "learn as you go" type of action - will be fast enoughto appease the environmental critics and its investors.


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REPORT ON ECONOMIC IMPACT(worldwide)

The costs of Global Warming are tremendous, estimates of course vary butmost figures put out are in the trillions. So what does this mean for you and how

are you directly affected by these costs?

Its difficult to answer that question, because the first large-scale study of theeconomic impact of global warming wasnt released until recently. But lets look atsome of the data we do have.

In 2007, scientists at the Carnegie Institution measured, over the past 20years, the annual yields of the worlds six largest crops (which account for 55% ofnon-meat calories consumed by humans and 70% of total animal feed)and foundthat increasingly warmer temperatures led to lower crop yields. Those lower crop

yields amounted to a net economic loss of $5 billion a year.

Thats good information, but there was one problem with the Carnegie

Institutions study, however: It looked backward. But by the time the CarnegieInstitutions study was released, another report had begun to gain notoriety: TheStern Review In this 2006 report, Nicholas Stern, former chief economist of theWorld Bank, looked forward. His prediction: Climate change will have such aserious impact on economic growth that 1% of global gross domestic product(GDP) will be required to mitigate its effects. Thats a lot of money, given thatGDP was almost $70 trillion in 2008(World Bank sources)

Of course, that wasnt the end of the discussion. Since the CarnegieInstitutions study and The Stern Review came out, numerous other studies have

tried to quantify the economic impact of global warming. And most of thesestudies have focused on the negative economic impacts of global warming.

For example, in June 2008, the International Energy Agency (IEA) issued itsTechnology Perspectives report, which concluded that carbon dioxide emissionsshould be reduced by 50% from 2008 levels. To achieve this, the report projectsthat $45 trillion in financing will be needed over the next 40 years. That representsabout $1 to $2 trillion per year in commercial investment financing.

Another example: In July 2009, Oxfam International released Suffering theScienceClimate Change, People and Poverty. This reportwhich usedinformation gathered from the insurance industry to assess the economic impact ofglobal warmingconcluded that trade patterns will likely shift as climate change


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takes hold. Richer parts of the world will receive a boost, while poorer regionssuffer. For example, Oxfam predicted that American agricultural profits will riseby $1.3 billion annually because of climate change, while sub-Saharan Africa willlose $2 billion annually as the viability of one of the regions staple crops maizedeclined.

Some of these studies on global warming, however, point out thataddressing global warming could be more costly that not addressing it. In June2009, for example, Ben Lieberman, senior policy analyst for energy andenvironment at the Thomas A. Roe Institute for Economic Policy Studies at TheHeritage Foundation, testified before the U.S. Senate that the cap-and-tradeapproach to addressing global warmingin particular, the Waxman-Markey Cap-and-Trade Billinflicts economic pain.

Higher energy costs kick in as soon as the bill's provisions take effect in2012, Lieberman testified. For a household of four, energy costs go up $436 thatyear, and they eventually reach $1,241 in 2035 and average $829 annually overthat span. Electricity costs go up 90% by 2035, gasoline by 58%, and natural gasby 55% by 2035. The cumulative higher energy costs for a family of four by thenwill be nearly $20,000. But direct energy costs are only part of the consumerimpact. Nearly everything goes up, since higher energy costs raise productioncosts. If you look at the total cost of Waxman-Markey, it works out to an averageof $2,979 annually from 2012 to 2035 for a household of four. By 2035 alone, thetotal cost is over $4,600. Beyond the cost impact on individuals and households,

Waxman-Markey also affects employment, and especially employment in themanufacturing sector. We estimate job losses averaging 1,145,000 at any given

time from 2012 to 2035. And note that those are net job losses, after the much-hyped green jobs are taken into account.

Clearly, estimating the economic impact of global warming is no simpletask, and is fraught with political discourse. But there is one sure sign that globalwarming is having an economic impact: Investors are starting to consider it anopportunity.

Sophisticated institutional investors, typically the first to jump on a newinvestment trend, have already recognized the opportunities that exist in thealternative energy space. According to New Energy Finance, total new globalinvestments in clean energy were $33.4 billion in 2004, $58.7 billion in 2005 (76%growth), $92.6 billion in 2006 (58% growth) and $148.4 billion in 2007 (60%growth)and they will continue to increase through 2030. Indeed, Jane Mendillo,


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president and CEO of Harvard Management Company, told Smart Money in 2008that the next big thing in the endowment world could be alternative energy.

And now retail investors are getting involved as well. A number of mutual

funds allow average Joes and Janes to invest in companies that are seeking tomitigate the effects of climate change or helping the world adapt to them.

In fact, climate change could be the next big investing trend.

Restructuring in the global economy according to principles of ecology

represents the greatest investment opportunity in history, said Lester Brown,president ofChief Earth Policy Institute, in 2008.

REPORT ON INDIAN IMPACT

'The Economics ofClimate Change' a landmark report by SirNicholasStern has some dire predictions about the impact global warming will have onIndia's economic prospects. For instance, an estimated 100 cm rise in sea level

could lead to a loss of US$ 1,259 million or the equivalent of 0.36% of India'sGNP.

Global warming and subsequent changes in climate could severely hamperIndia's robust growth unless steps are taken to address the effects of increasedsurface temperature and its effect on monsoon patterns and river flow, according tothe recently released Stern review on the economic impact of climate change.

Some of the key predictions for India, over the next 100 years, in the 700-page British government-commissioned report are:

Regional climate models suggest a 2.5-5 degree Celsius rise in mean surfacetemperature. Within India, northern India will become warmer.

y A 20% increase in summer monsoon rainfall. Instances of extremetemperature and precipitation are expected to rise. All Indian states will


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experience increased rainfall, except Punjab, Rajasthan and Tamil Naduwhere rainfall will decrease. Extreme precipitation will increase, particularlyalong the western coast and west central India.

The country's hydrological cycle will most likely be altered. Drought and floodintensity will increase. The Krishna, Narmada, Cauvery and Tapi river basins willexperience severe water stress and drought conditions, and the Mahanadi,Godavari will experience enhanced flooding.

y Crop yields will decrease with increases in temperature and precipitation. Itis predicted that wheat crop losses will be greater, especially rabi crops. Thiswill threaten the country's food security.

y Coastal agriculture will suffer the most -- Gujarat, Maharashtra, Karnataka,

Punjab, Haryana and western Uttar Pradesh will face yield reduction West

Bengal, Orissa and Andhra Pradesh will gain marginally.

A 100 cm rise in sea level could lead to a loss of US$ 1,259 million theequivalent of 0.36% of India's GNP.

y There will be an increase in the frequency and intensity of tropical cyclonesin the Bay of Bengal, particularly in the post-monsoon period. Flooding willincrease in low-lying coastal areas.

y Malaria will continue to be endemic in traditionally malaria-prone states(Orissa, West Bengal, southern parts of Assam and North West Bengal). It

may also shift from the central Indian region to the southwestern coastalstates of Maharashtra, Karnataka and Kerala. New regions -- HimachalPradesh, Arunachal Pradesh, Nagaland, Manipur and Mizoram -- willbecome malaria-prone; the disease's transmission duration window willwiden in northern and western states and shorten in southern states.

India's economic losses due to increases in temperature are estimated to bebetween 9-25%. GDP loss may amount to 0.67% annually


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Reporting is done by Parties by way of submitting annual emission inventoriesand national reports under the Protocol at regular intervals.

A compliance system ensures that Parties are meeting their commitments and

helps them to meet their commitments if they have problems doing so.

AdaptationThe Kyoto Protocol, like the Convention, is also designed to assist countries inadapting to the adverse effects of climate change. It facilitates the developmentand deployment of techniques that can help increase resilience to the impacts ofclimate change.

The Adaptation Fund was established to finance adaptation projects andprogrammers in developing countries that are Parties to the Kyoto Protocol.

The Fund is financed mainly with a share of proceeds fromC

DM projectactivities.

The road ahead

The Kyoto Protocol is generally seen as an important first step towards a truly

global emission reduction regime that will stabilize GHG emissions, andprovides the essential architecture for any future international agreement onclimate change.

By the end of the first commitment period of the Kyoto Protocol in 2012, a newinternational framework needs to have been negotiated and ratified that can

deliver the stringent emission reductions the Intergovernmental Panel onClimate Change (IPCC) has clearly indicated are needed.


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Copenhagen summit

The results and its contribution to stop Global Warming?Copenhagen was planned to get a middle path/ solution between developing and

developed nations.

Excess consumption and wastage of energy has to be prevented. More efficient

technologies have to be found. If possible, ways have to be devised to absorb

GHGs so that they don't accumulate in the atmosphere. Nature offers such a

solution in trees, which absorb carbon dioxide and are therefore very good carbon

sinks and are good for reducing GHG concentrations.

The Copenhagen meet is expected to fix bigger targets on these countries for a

period beyond 2012 and till 2020.

Why should the rich pay more? Well, it's only fair since they created the problem

in the first place. More than 80 per cent of the accumulated GHGs in atmosphere

have been emitted by these countries since they were the first ones to industrialise.

They continue to emit more, a handful of about 30 rich countries account for nearly

half the global emissions. Their average per capita emission is more than twice theworld average and at least ten times more than that of India. A lot of it results from

wasteful and luxurious consumption of energy.

But that doesn't mean the rest can just sit back and do nothing, does it? According

to the Bali Action Plan, every country needs to take steps to reduce its energy

consumption. But unlike rich countries, they do not have to affix targets and the

reduction targets are not legally binding. This has been done so that the developing

countries don't find themselves constrained in their effort to increase economic

activity and reduce poverty. Development and poverty reduction have been

recognised as the primary and overriding concern for these countries and that

includes India.

Rich countries, for example, want big, emerging economies like India and China to

also take some sort of targeted reductions in their rapidly growing emissions.


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Developing countries, on the other hand, are demanding more ambitious emission

cuts from the rich countries. They are also asking for transfer of technology and

money to cope with the effects of a problem that is essentially the making of rich

countries.

Copenhagen Summit India and climate change

The facts India is the fifth largest emitter of greenhouse gases, behind China, theUnited States, the European Union and Russia. Its annual carbon dioxide emissionis in the range of 1.2 to 1.4 billion tonnes. Its annual greenhouse gas emission(CO2 plus five other gases, including methane) is in the range of 1.6 to 1.8 billiontonnes. India's per capita emission is about 1.2 tonnes per year. That's about onefourth of the global average, about one-tenth of the emissions of developedcountries and about one-third ofChina's. Between 1990 and 2004, India's carbondioxide emissions grew by about 7 per cent a year on an average.

Copenhagen Summit India's traditional argument:

Development and poverty reduction is its primary and over-riding priority even asit shares responsibility for contributing to global effort s to contain temperature riseand climate change. It is, therefore, in no position to cap or reduce its emissions,though it is working towards slowing the growth of its emissions. Reducinggreenhouse gas emissions (mitigation) is the sole responsibility of Annex-I

countries (developed nations), as the Kyoto Protocol says. India will takemitigation efforts only if the developed world supports it with technology transferand finance. India has already come up with a National Action Plan on ClimateChange in line with its responsibility under the Bali roadmap. Several other steps,including a new building code, fuel efficiency standards and massive afforestation,have also been initiated. However, these domestic actions are not open to

international scrutiny. Prime Minister Manmohan Singh has given an assurancethat even as its total emissions grow, India will never allow its per capita emissionsto rise above the average per capita emissions of the developed world.


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Copenhegen after one year

Agreement made at Copenhagen and not kept in full

y The controversial Copenhagen accord asked the rich countries to provide

$30 billion of quick money to poorest countries for 2010-2012.

y It asked developed countries to provide $100 billion a year by 2020.

y Developing countries agreed to international consultation and analysis (ICA)

of their domestic and voluntary action to reduce emission which they would

list up with the UN framework convention on climate change.

y Trust break between countries with the Copenhagen accord being forced

through.

AFTER COPENHAGEN

US tried hard to make the Copenhagen accord the basis of all future

negotiation. Developing countries refused to let it happen. Allowed

the accord to influence the decision but not become the basic tablet of

discussions.

Japan and others refused to let Kyoto Protocol continue.

Some countries make a partial commitment to the $30 billion fast

track money but promises are false.

Show us the money

The promised money of $30 billion is about to come. One third of

the period is passed and no money is on the table.


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US has not officially announced its contribution to the fast track

fun. Obama is spending money but it is not new fund US already

invest in overseas development will be re named as climate money.

Other countries are doing the same-renaming exiting funds as green

funds.

How much of the money is through market and how much is real

public spending includes double counting of cash.

Cancum climate summit (mexico,2010)

The 2010 united nations climate change conference was held in cancum, mexico.

The conference is officially refered to as the 16th

session of conference ofparties(COP16) to the united nation framework convention on climate

change(UNFCCC). The outcome of summit was an agreement.

It recognizes that climate change represents an urgent and potentially irreversible

threat to human societies and the planet, and thus requires to be urgently addressed

by all Parties. Affirms that climate change is one of the greatest challenges of our

time and that all Parties share a vision for long-term cooperative action in order to

achieve the objective of the Convention, including through achievement of a global

goal. It recognizes that warming of the climate system is unequivocal, as assessedby the IPCC in its Fourth Assessment Report.

It further recognizes that deep cuts in global greenhouse gas emissions are

required, with a view to reducing global greenhouse gas emissions so as to hold the

increase in global average temperature below 2C above pre-industrial levels, and

that Parties should take urgent action to meet this long-term goal, consistent with

science and on the basis of equity; Also recognizes the need to consider, in the

context of the first review, strengthening in relation to a global average

temperature rise of 1.5C

. Realizes that addressing climate change requires aparadigm shift towards building a low-carbon society

The agreement includes a "Green Climate Fund," proposed to be worth $100

billion a year by 2020, to assist poorer countries in financing emission reductions

and adaptation. There was no agreement on how to extend the Kyoto Protocol, or

how the $100 billion a year for the Green Climate Fund will be raised, or whether


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developing countries should have binding emissions reductions or whether rich

countries would have to reduce emissions first. Reuters Environment

Correspondent Alister Doyle reported that to most delegates, though they approved

it, the agreement fell woefully short of action needed.

The New York Times described the agreement as being both a "major step

forward" given that international negotiations had stumbled in recent years.

The REDD+ initiative (Reducing Emissions from Deforestation and ForestDegradation), which attracted a lot of attention at COP 16, calls for rich countriesto finance forest-saving actions in developing countries, benefitting local actors,

and rural and indigenous communities in particular.

When a forest is included in the mechanism, it will prevent the local communities

from utilising it as they have for their livelihood, "because whoever is in the forestwill have to assure that the carbon stock would be retained. It means extractingcarbon dioxide, one of the leading greenhouse gases, and sequestering it in "sinks,"deep in the oceans, in forests and underground. Those investing in such dealswould then be able to trade emissions credits on the carbon market.

Carbon capture and storage technology has not been proved yet. It is not ready tobe put into practice. It is a further way of moving away from renewable energies,moving away from mitigation, to some kind of technology that would not solve theproblem. Better idea is to leave the carbon where it belongs.

Even the country which hosted summit (mexico) saying- We are the coldestcountry in the world, so global warming is good for us. The warmer it is, the bigger

the harvest.They talk about stopping deforestation of the tropical jungles to fightclimate change, but we don't have tropical jungles. So, cancum summit also endswithout solving the emission puzzle.

Health Effects

A. Past Research

In the early 1970s, the U.S. Department of Transportation sponsored a series ofconferences on climate change that examined, among other things, the effect ofclimate on health care expenditures and on preferences of workers for various


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climates. At that time, the government and most observers were concerned aboutpossible cooling of the globe. The Department organized the meetings because itplanned to subsidize the development and construction of a large fleet ofsupersonic aircraft that environmentalists contended would affect the worldsclimate.The third gathering, held in February 1974, examined the implications of climatechange for the economy and peoples well-being and included a study of the costs

to human health from cooling, especially any increased expenses for doctorsservices, visits to hospitals, and additional medication. For that meeting, theDepartment asked the researchers to consider a cooling of 2C and a warming of0.5C. Robert Anderson, Jr., the economist who calculated health care outlays,made no estimate of the costs or savings should the climate warm; but his numbersshow that for every 5 percent reduction in the annual number of degree days, ameasure of heating costs, health care costs would fall by $0.6 billion (1971

dollars).1 In his paper summarizing the various studies on economic costs andbenefits of climate change, Ralph DArge (1974), the principal economist involvedin the DOT project, indicated that a 10 percent shift in degree days would beequivalent to a 1C change in temperature. Thus the gain in reduced health costsfrom a warming of 2.5C would be on the order of $3.0 billion in 1971 dollars or$21.7 billion in 1994 dollars, adjusting for population growth and price

changes (using the price index for medical care). Other studies of the influence ofclimate change on human health have examined a rather narrow set of potentialmedical areas. The underlying research has generally referred to Lyme disease,malaria, dengue and yellow fevers, and encephalitis, none of which is a majorhealth problem in the United States. The IPCC has asserted that the geographicalzone of potential malaria transmission in response to world temperature increasesat the upper part of the IPCC-projected range (3-5C by 2100) would increase fromapproximately 45% of the world population to approximately 60% by the latterhalf of the next century. Work concerned with killer heat waves has generallyignored the reduction in mortality that warmer winter months would brin.Interestingly cities with the highest average number of summer deaths arefound in the Midwest orNortheast while those with the lowest number are in theSouth. Perhaps people adapt to warm weather.

II. Human Well-Being

In The Wealth ofNations, Adam Smith pointed out that workers must be paidmore to work in an unpleasant place or to do nasty jobs. A casual examination ofthe job market illustrates the truth of that proposition. Oil companies must paytheir workers premiums to cope with the climate on the North Slope of Alaska.


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Even in central and southern Alaska, labor commands higher wages than it does inthe lower 48 states. These differentials reflect the desirability of jobs in one areaover another. For example, those who have the least distaste for cold and darknesscan be lured for the smallest premium to Prudhoe Bay, Alaska, to work in the oilfields. The differential in this case reflects the marginal valuation of theunpleasantness of work in that harsh environment of those with the least aversionto the conditions.

A. Theory of Amenity Values

There is a large and growing economic literature on such amenity values.Locational advantage can be reflected in the willingness of workers to accept lowerwages or in the bidding up by business and home owners of land values.7 If landvalues are raised enough, wages could even be forced higher to maintain real

incomes. However, it is likely that if workers willingly work for less in a regionwith positive amenity values, this sum understates the benefits of the location.Some benefits have probably been capitalized into land values and are reflected inrents. Thus living costs are raised, making the reduction in wages that workers willaccept smaller.

B. Studies of the Effect on Rents

Roback found that none of the climate variables had any statistically significantrelationship to land values, although heating degree days had a positive coefficient.Blomquist et al (1988) reported that precipitation, humidity, heating degree days,and cooling degree days were negatively related to housing expenditures aproxy for land values while wind speed, sunshine, and being close to the coastwere positively related. Even though statistically significant, both cooling andheating degree days had very small effects on housing expenditures. Taking intoaccount the effects of heating and cooling days on both wages and housing costs,the full implicit price of these variables was trivial. Gyourko and Tracy (1991)reported that the more precipitation, the greater the number of cooling degree days,the more heating degree days, and the higher the wind speed, the lower their

measure of housing expenditures. On the other side, they also found that the higherthe relative humidity and the closer to the coast (t=1.94), the higher the housingcosts. In sum existing studies have reported mixed correlations between housingcosts and weather-related amenity values. Gyourko and Tracy (1991, p. 784)conclude their analysis of amenities by finding that "for many city traits, the fullprice largely reflects capitalization in the labor rather than in the land market." Therest of this paper, therefore, will assume that climate amenities do not affect


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production costs and, as a result, any wage reduction underestimates the benefitsfrom warming, although most of the amenity values do appear in the labor market.

C. Studies of the Effect on Wages

The DOTs third conference on global climate change, referred to above, useddifferences in occupational wages among urban areas to estimate the value of

climate to humans. One of the tables, presented by Ralph C. DArge in hisoverview of the economic research, drew on the work of Irving Hoch to supplyestimates of the costs and benefits of a 0.5C warming. Hochs work (1974)implies that a rise in temperature would have bestowed on workers an implicit gainof $1.6 billion in 1971 dollars. In other words, workers would have been willing toaccept $1.6 billion less in wages for employment in regions that were 0.5Cwarmer. Roback found that heating degree days, total snowfall, and the

number of cloudy days was positively correlated with wages, suggesting these aredisamenities. As expected, the number of clear days was negatively correlated withwages. Gyourko and Tracy reported that heating degree days were positivelycorrelated with weekly hedonic wages. The coefficient for cooling degree dayswas also positive but not significantly different from zero. Both precipitation andwind speed were significantly negatively correlated with the hedonic wage

variable, a somewhat puzzling result. Blomquist et al , on the other hand,found that both heating degree days and cooling degree days were negativelycorrelated with their hourly wage equation, implying that workers prefer both coldand hot weather.

Tourism feels the heat of global warming

Climate is an essential 'resource' for tourism, especially for beach, nature andwinter sport tourism, and the phenomenon of global warming already gravelyaffects the industry and an increasing number of destinations. In 2003, the Madrid-based UN World Tourism Organisation (UNWTO) convened the 1st InternationalConference on Climate Change and Tourism in Djerba, Tunisia, to help the travel

and tourism industry to respond to these issues. The UNWTO, which became aspecial UN agency only a few years ago, is traditionally driven by a strongBusiness Council that aggressively advances the interests of the world's mostpowerful tourism-related corporations.That the UNWTO declared climate change a priority issue shows the growingawareness among industry leaders and policymakers that the impacts of globalwarming pose a serious threat to tourism - one of the world's largest and fastest-


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growing industries, generating over 10.4% of world GDP, according to the WorldTravel and Tourism Council (WTTC).Notably, the Djerba conference recognised that the relationship between climatechange and tourism is two-fold: not only is tourism affected by a changing climate,at the same time it contributes to climate change through the consumption of fossilfuels and resulting greenhouse gas emissions. It was concluded that there was an'urgent need for the tourism industry, national governments and international

organisations to develop and implement strategies to face the changing climateconditions and to take preventive actions for future effects, as well as to mitigatetourism's environmental impacts contributing to climate change' (DjerbaDeclaration 2003).The burgeoning international ecotourism industry is also feeling the heat. At theGlobal Ecotourism Conference 2007 (GEC07) that was jointly organised by TheInternational Ecotourism Society (TIES), Ecotourism Norway and the UN

Environment Programme (UNEP) in Oslo, Norway in May, it was agreed that'Climate change has increasingly become a major threat affecting the veryresources on which ecotourism depends - natural areas and local and indigenouscommunities around the world....Stronger leadership and strategies are needed inorder to substantially decrease ecotourism's carbon footprint generated frommultiple sources including facility operations and transport-related greenhouse gas

emissions.'There are a couple of reasons why travel and tourism leaders are now feverishlyworking on the climate change front. Firstly, the economic costs of climate changefor the industry will rise inexorably if it takes a business-as-usual attitude.Secondly, tourism relies more than other industries on a good image, but itsreputation as a beneficial and environmentally acceptable activity has rapidly fadedduring recent debates on the causes of global warming.

Economic factors

Critics have always pointed out the fickle nature of tourism, and indeed theindustry's special vulnerability to bad news and events has been proven many timesin recent years; just consider the slumps following terrorist attacks such as 9/11

and the Bali bombings, the threat of diseases such as SARS and avian flu orenvironmental crises. The Indian Ocean tsunami in 2004 and Hurricane Katrinathat hit New Orleans in 2005 exacted an immeasurable toll on the travel andtourism industry. What needs to be calculated here are not only the costs of lostproperty and the reconstruction of tourist infrastructure in the wake of disasters,but also the costs of tourists staying away from crisis-hit destinations for a long


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'Warming stops global roaming,' wrote the Australian newspaper Daily Telegraphrecently. A survey in Australia done by a holiday website found that nearly 20%of respondents considered giving up air travel as it causes irreparable harm to theenvironment, while only 16% said they do not care about climate change and itwould not affect their travel choices at all. Similarly, a study prepared forGreenpeace in the UK showed a clear shift in consumers' perception: 61% of therespondents were of the opinion that 'We should limit our air travel voluntarily',

33% agreed that 'Air travel is now too cheap', 52% agreed that 'There should be atax on fuel for air travel', and 61% of the respondents supported the idea that 'Thereshould be a pollution warning on air tickets'.Apart from aviation, the booming cruise-ship industry has also come under fire.Cruise ships that can carry up to 5,000 tourists are not only notorious forgenerating tremendous amounts of waste and sewage but also rank among thebiggest contributors to greenhouse gas emissions within the travel and tourism

industry. The US BluewaterNetwork that campaigns against the pollution of theworld's oceans by ships has found that in one port visit, a single cruise ship cangenerate the emissions of more than 12,400 cars. The ships' smokestacks releasetoxic emissions that lead to acid rain, global climate change, and damaging healtheffects to communities situated near ports. Despite the fact that ocean cruise linersare more energy-efficient than other forms of commercial transportation, marine

engines operate on extremely dirty fuels, known as 'bunker oil'. To compound theproblem, engines on these ocean-going ships are currently not required to meet thesame strict air pollution controls as cars and trucks are required to do.Global travel and tourism could only grow by leaps and bounds because thetransport networks that enable the movement of people and goods around theworld are heavily subsidised. Tourists can enjoy travelling around the world atincredibly low prices. As the New Economics Foundation study 'Up in Smoke?'explains, '...much international trade lives in a bubble. International aviation andmarine fuels are immune from any kind of taxation that would indicate andinternalise the real environmental cost of freight and shipping. Greenhouse gasemissions from international freight are also exempt from the emissions targets setfor rich countries to meet under the Kyoto Protocol of the UNClimate ChangeConvention.'

Growing consumer awareness on these issues and a burgeoning citizens' movementcalling for fuel taxes and stricter regulation of the transport industry can severelycurb future tourism growth targets and, thus, cut deep into the profits of plane-makers, airlines, travel agencies, cruise-ship operators and other tourism-relatedbusinesses. No wonder, then, that companies are now scrambling to talk abouthard-earned environmental advances and new initiatives to protect theenvironment.


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At the Paris Air Show in June, for example, Airbus' top salesman John Leah told apress conference that Airbus is 'saving the planet, one A380 at a time'. Thecompany's promotional brochures featured a silhouette of the new two-deck A380super-jumbo - dubbed the 'gentle green giant' - set against images of dolphins,rainforests and fishing boats on a misty pond. Boeing representatives were alsokeen to display their ecological bona fides and claimed the industry has reducedfuel consumption by 70% since the jet age began, reported Dow Jones Newswires.

Image is all

While the global travel and tourism lobby has adopted the rhetoric of corporatesocial and environmental responsibility, reality checks on the ground show thattourism's environmental performance has remained very poor. Neither the UN-initiated International Year of Ecotourism 2002 nor multilateral environment

agreements such as the Tourism Guidelines under the Convention on BiologicalDiversity (CBD) have achieved anything to stop tourism from pervading pristinecoastal areas, islands, forests and mountainous areas.On the contrary, more fragile ecosystems and biodiversity are being destroyed,local communities displaced and traditional livelihoods decimated - all for theestablishment of huge exclusive resorts, golf courses and marinas. These massive

tourism complexes are also notorious for high per capita consumption of energyand water. But however damaging and wasteful these projects may be, with theright PR efforts, they can still pass off as 'ecotourism' developments and even raisetheir profile thanks to eco-accreditation schemes, or environmental best practicesawards.As long as no proper legally binding frameworks are in place to check and redressexcessive and damaging tourism activities, such 'green-washing' will continue andclimate change culprits are likely to get away scot-free.Ecotourism promoters' intention to help minimise tourism's carbon footprint islaudable. The GEC07 Oslo Statement, for example, outlines an action plan thataims at 'encouraging adapted travel patterns (e.g. increase length of stay per trip);promoting more energy-efficient, alternative or non-motorised transport options;utilising reduced and zero-emission operation technologies; and increasing

participation in reliable high-quality carbon offsetting schemes'.But many of the new initiatives that promote 'zero-carbon' or 'carbon-neutral'tourism businesses need to be subjected to critical examination because they mayjust be marketing gimmicks. For instance, The Guardian (UK) announced inJanuary that Per Aquum, the brand behind some of the world's most luxuriousresorts, was the owner of the first 'zero-carbon' five-star beach resort, designed byarchitects in London. The developers of the resort, due to open in 2008, claim the


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project will have no negative environmental impact and will be totally self-sufficient, using only energy from the sun and wind and producing little waste orcarbon emissions. 'The only drawback, environmentally speaking, is its location -thousands of fuel-guzzling miles away [from London] in Nungwi, Zanzibar,'cautioned The Guardian.Six Senses Resorts and Spas, a Bangkok-based luxury hotel chain with propertiesin Thailand, Vietnam and the Maldives, now specialises in 'carbon-cutting

getaways' for millionaires who do not want their 'vacation dampened by globalwarming guilt'. Apart from introducing energy-saving innovations at the luxuriousisland resorts, all visitors are required to pay a tax for their flight, which goes into acarbon offset fund. The project owners say the fund will be spent on renewableenergy projects for villages in Sri Lanka and India, thus offsetting among the poorthe carbon emissions caused by jets transporting the rich to their holidaydestination. Yet, can Six Senses really be called an environmentally friendly

company considering that it consumes exorbitant amounts of water to run its spafacilities, for example?

Controversial carbon offsetting and trading schemes

A growing number of airlines have included carbon offsetting into the price of

tickets. However, there are increasing reports about shady 'think green, see cash'carbon trading businesses that are trying to take advantage of well-intentioned airtravellers. When Lufthansa earlier this year was looking for a partner to offer acarbon offsetting scheme to customers, half of the 13 studied companies wereconsidered unreliable.Last year, the activists Timothy Byakola and Chris Lang exposed a Dutchcompany called GreenSeat which promised to invest airline passengers' carbonoffset contributions in climate-friendly projects in poor countries. For the paltrysum of US$28, one would be able to cover the costs of planting 66 trees to'compensate' for the CO2 emissions of a return flight from Frankfurt to Kampala.But looking closer at one of these projects, in Mount Elgon National Park inUganda, the activists found that local people were harassed and even driven fromtheir land to pave the way for the tree plantations. GreenSeat has since stopped

selling carbon credits from Mount Elgon because of the problems there. Earlier thisyear, farmers cut down half a million of the project's trees and planted crops andfruit trees on the land.Carbon trading that enables companies and consumers to buy their way out ofresponsibility are highly controversial. It 'dispossesses ordinary people in the Southof their lands and futures without resulting in appreciable progress towardalternative energy systems', argues Larry Lohmann of the UK-based The Corner


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House, who has co-edited the bookCarbon Trading: A Critical Conversation onClimate Change, Privatisation and Power. 'Tradable rights to pollute are handedout to Northern industry, allowing them to continue to profit from business asusual. At the same time, Northern polluters are encouraged to invest in supposedlycarbon-saving projects in the South, very few of which are actually helping to haltdependence on fossil fuels.'Linking climate change and 'pro-poor' tourism

If the goal is to effectively decrease greenhouse gas emissions in the travel andtourism sector, there seems to be no way around curbing the growth of theindustry. It thus would make sense if governments rethink tourism as adevelopment solution and offer alternatives to tourism in order to at least reducethe over-dependence on this industry in developing countries. But whenever suchproposals come up, the tourism world is quick to argue that tourism is a top

industry in the battle against world poverty.The UNWTO has declared that the global tourism sector offers solutions to the'twin challenges of climate change and poverty', in response to UN Secretary-General Ban Ki-moon's call for action on climate change to be taken in closecoordination with global action on poverty alleviation and the MillenniumDevelopment Goals. A major aspect of UNWTO's submission to the UN climate

change summit in Bali in December will be to demonstrate that the agency 'iscommitted to ensuring that this coherence is applied to the tourism sector generallyand particularly in regard to the world's poorest countries, for whom tourism is adriver of jobs, livelihoods, exports and competitiveness'.The focus on tourism as a viable foreign exchange earner for poor countries hasalways been rebuffed by critical analysts due to tourism's high leakages, forexample. But tourism's benefits become even more questionable in today's carbon-constrained world, as Becken convincingly illustrates in her case study on Fijiantourism. She concludes that the 'eco-efficiency of tourism is possibly low whenthe total of greenhouse gas emissions are weighted against the economic benefitsfor Fiji, especially when about 60% of tourism foreign exchange leak out of Fiji'.The argument of tourism as a poverty alleviation strategy is even more doubtful inview of the increasing number of foreign takeovers of tourism businesses as a

result of globalisation and liberalisation. To stay with the case of Fiji, investmentstatistics show that 94% of the 132 tourism projects put into operation between1988 and 2000 were foreign-owned. That means less tourism revenue tricklesdown to the local economy, but Fijian residents, including those who do notparticipate in the tourist trade at all, have to bear the high costs of tourism's energyuse, greenhouse gas emissions and other environmental impacts. According toBecken, tourism within Fiji contributes at least 7.4% to national energy use and


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take more decisive steps to curb relentless tourism expansion that exacerbates theclimate change crisis.More cooperative efforts to combat the negative impacts of climate change shouldbe made by the academic community, development aid agencies and non-governmental organisations (NGOs) that are specifically concerned with tourismdevelopment. The Indian NGO Equations (Equitable Tourism Options) made agood start when it released a 'Call for Action on Climate Change, Biodiversity and

Tourism' on the occasion of International Biodiversity Day on 22 May 2007.Among other things, it called on the tourism industry to come up with an authenticresponse to climate change. 'We recognise that [effective measures] may require asignificant transformation of current forms of mass tourism and urge a seriousengagement on this issue to reduce tourism's climate change footprint,' says thestatement. Furthermore, Equations demands 'climate justice' by phasing outunsustainable growth strategies. It states, 'The responsibility of seeking viable and

sustainable solutions to avert the climate crisis must take into account particularlythe plight of the most vulnerable communities around the world.'

Fishing FactsThe oceans have been fished for thousands of years and are an integral part ofhuman society. Fish have been important to the world economy for all of

these years, starting with the Viking trade of cod and then continuing withfisheries like those found in Lofoten, Europe, Italy, Portugal, Spain and India.Fisheries of today provide about 16% of the total world's protein with higherpercentages occurring in developing nations. Fisheries are still enormouslyimportant to the economy and wellbeing of communities.

The word fisheries refers to all of the fishing activities in the ocean, whether they

are to obtain fish for the commercial fishing industry, for recreation or to obtain

ornamental fish or fish oil. Fishing activities resulting in fish not used for

consumption are called industrial fisheries. Fisheries are usually designated to

certain ecoregions like the salmon fishery in Alaska, the Eastern Pacific tuna


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fishery or the Lofoten island cod fishery. Due to the relative abundance of fish on

the continental shelf, fisheries are usually marine and not freshwater.

The amount of fish available in the oceans is an ever-changing number due to

the effects of both natural causes and human developments. It will benecessary to manage ocean fisheries in the coming years to make sure the

number of fish caught never makes it to zero. A lack of fish greatly impactsthe economy of communities dependent on the resource, as can be seen inJapan, eastern Canada, New England, Indonesia and Alaska. The anchovyfisheries off the coast of western South America have already collapsed andwith numbers dropping violently from 20 million tons to 4 million tonstheymay never fully recover. Other collapses include the California sardineindustry, the Alaskan king crab industry and the Canadian northern codindustry. In Massachusetts alone, the cod, haddock and yellowtail flounder

industries collapsed, causing an economic disaster for the area.

Due to the importance of fishing to the worldwide economy and the need forhumans to understand human impacts on the environment, the academicdivision of fisheries science was developed. Fisheries science includes allaspects of marine biology, in addition to economics and management skillsand information. Marine conservation issues like overfishing, sustainablefisheries and management of fisheries are also examined through fisheriesscience.

In order for there to be plenty of fish in the years ahead, fisheries will have to

develop sustainable fisheries and some will have to close. Due to the

constant increase in the human population, the oceans have been overfished with

a resulting decline of fish crucial to the economy and communities of the world.

The control of the world's fisheries is a controversial subject, as they cannot

produce enough to satisfy the demand, especially when there aren't enough fish left

to breed in healthy ecosystems. Scientists are often in the role of fisheries

managers and must regulate the amount of fishing in the oceans, a position not

popular with those who have to make a living fishing ever decreasing populations.

In many countries, commercial fishing has found more temporarily economical

ways of catching fish, including gill nets, purse seines, and drift nets. Although fish

are trapped efficiently in one day using these fishing practices, the number of fish

that are wasted this way has reached 27 million tons per year, not to mention the


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may not be congenial for their growth. The economical effects of global warming

are vividly described by various programs conducted by the concerned agencies of

the world.

The extreme heat and unwanted changes in climate will surely trigger the loss of

global gross domestic product by up to 1%. The economists all around the world

do predict that the global warming will have an adverse effect on the growth of

infrastructure of the world. If people get affected by poor health and suffer form

various diseases, it ultimately harms their potential and that leads to waste of

human resources. The United Nations Environment Programs put emphasis on the

fact that the prevalence of global warming in the world is capable of doing great

harm to the insurers, re-insurers and bank. When it comes to other economic

sectors, the economical effects of global warming will have a deep impact on

agriculture and transport. Developing countries are considered to at larger

economic risk than their developed counterpart.

As is obvious, the predictions of global warming are dire. They project a world

in which the droughts become longer and more intense, where dramatic whether

becomes more extreme, where the wet seasons become wetter, and where there can

be sudden shifts in the land temperature. Keeping these things in mind, it becomes

clear that without some kind that a world dominated by the effects of globalwarming lacks the ability to sustain an organized and constantly flowing supply of

agriculture, making the economic costs of global warming too great to predict.

However, it is clear that if no immediate steps are taken by world leaders, global

warming could prove much more than just an economic threat.


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BIBLIOGRAPHY

1. Climate Change Dispatch - Time To Hold Environmental And Climate

Doomsayers To Account.

2. BBCNEWS Business The economic impact of global warming.

3. Climate Change Economics World Resources Institute.

4. COP16Cancn Climate Conference Global Issues.

5. Global warming could rain on Indias growth parade Stern report.

6. IMF Survey Climate Change and the Global Economy.

7. The World Bank - Climate Change - Economics of Adaptation to Climate

Change.

8. The Guardian (http://www.guardian.co.uk)

9. Odysen (http://www.odysen.com)

10.METLA (http://www.metla.fi/)

11.Wikipedia (http://www.wikipedia.org)

12.Google

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