What is flight shaming ?
Discover why the flight shaming urges reducing air travel due to its environmental impact.
Guides & E-books
Everyone is vastly aware of how global warming is affecting the planet: with natural disasters destroying homes, causing delays in the government such as allowing for extensions to pay taxes, poor air quality, and even toxic water contamination – but global warming does more than just affect our livelihood: it’ll also have an impact on our global economy.
How does global warming impact our global economy, what will be the consequences of climate change on our economic systems, and how could the world prevent global warming from influencing our global economy?
The global economy, also known or referred to as the worldwide economy, is the intertwining of economic activities that happen across the globe between various countries, and can either be positive or negative for the countries involved.
💡The global economy refers to everything bought or sold on the planet, and this is the type of economy we all currently live in today.
Our global economy has contributed to several, well-known facets of our international world today, such as with the following:
However, if the world once functioned without a global economy – why is it pivotal in today’s society?
👉 The global economy is important as it helps to ensure the economy stays regulated even as the world’s population continues to skyrocket by observing economic micro and macro levels, and also as the global economy helps to predict the world’s economic growth in the future and for the long-run.
Even though the world was once perfectly functional without a global economy, there are numerous reasons why a global economy is beneficial in today’s world, and why it’s important to make sure it stays intact.
For instance, the global economy allows for free trade – which allows countries to exchange goods and services. In other words, one country may not have the money to purchase a good or service that it needs from another country – but they may have something that the other country wants in exchange for the product or service. This shows how the global economy helps developing countries to survive.
The global economy also helps with:
The global economy works with the help of large financial institutions, such as U.S. banks that work to improve the distribution of goods and services such as power production and oil or other finite resources. Ultimately, while governments do have power over various economies around the world, it isn’t large economies that control the global economy – but big banks and large corporations.
The global economy can refer to any goods or services being bought or sold across the globe, all the way from oil to almond milk. This type of international exchange helps to:
👉 It is important to remember that even if the global economy is functioning well at the moment, that the global economy can be easily influenced by factors such as the availability of natural resources, changes in infrastructure or population, labor laws, and new technology.
However, global warming may have the biggest impact on the global economy of them all.
The impact of global warming on our global economy isn't as apparent now as it was five years ago, but as we’ve learned – a lot can happen in a short amount of time.
Circumstances like Covid-19, inflation, and the Russian-Ukraine war have put strain on the global economy. In addition to these political stressors, the impact of global warming on the global economy has also become more conspicuous.
Extreme weather has caused wildfires, complete destruction of various crop fields, and even caused power plants to explode – with industries such as beer companies suffering long-term and indefinite consequences to their business. Unbeknownst to most, weather disasters spurred by climate change have even delayed taxes across the country – as individuals and businesses have suddenly become stripped for finances following the necessary clean-up and repairs after foreshadowed natural disasters.
All of these events and implications are bound to put a damper on our global economy.
Political matters are also having an indirect impact on the global economy, as issues such as the energy crisis that happened across Europe this past winter resulted in many countries across the continent reducing their consumption of energy or skyrocketing prices. If global warming wasn’t as prevalent of an issue as it is today, energy prices wouldn’t have needed to skyrocket – showing how the global economy is somewhat contingent on a world that pays attention to the ever-changing needs in our society: such as adhering to climate change.
💡However, instances such as the recent energy crisis demonstrate how globalization and our global economy illustrate how such an interconnected economy can be impacted by global warming – as countries were not as likely to rely on other countries for pivotal resources such as oil to fuel power or electricity before.
Much of the discrepancy between global warming and our global economy have been highlighted by massive events such as the global pandemic, wars, and rising political tensions.
Besides the recent Covid-19 pandemic and rising political tensions, there have been many events that depict how global warming has a profound impact on the global economy.
For instance, global inflation has a lot to do with global warming – and inflation will continue to rise as resources become more finite and scarce in the midst of global warming. This has already been demonstrated with the recent U.K. energy crisis that happened last winter.
Speaking of energy consumption, energy costs will increase as governments make the transition to a clean energy economy. Seeing as this mass transition is necessary due to global warming, the clean energy transition further illustrates how global warming affects the global economy.
Global warming hasn’t only affected the prices of goods, services, and energy – but also massive industries such as the insurance industry. Well-known insurance companies in the U.S. such as State Farm have limited their insurance coverage as aiding in numerous natural disasters could lead the company to bankruptcy. Insurance costs across the board will only continue to rise as global warming does, and as a result – will impact the global economy.
💡The impact of global warming will depend on the region; wealthier economies will be less susceptible to the damages of global warming on their economies – but developing countries suffering from the effects of climate change will still have an effect on the global economy, as wealthier countries may still depending on resources from developing countries.
👉 Countries on continents like Africa and Asia will be most vulnerable to the effects of global warming, and subsequently will impact the global economy the most.
Building a global economy that is less prone to the effects of global warming isn’t an easy task, but it’s possible if each individual economy takes the proper steps to achieve this ambitious goal.
Here are a few of the ways to cultivate a stronger global economy in the midst of climate change:
👉 Building a more resilient global economy will require attention in all three ESG factors: environment, social, and governance.
Ultimately, cultivating a more resilient global economy is contingent on a worldwide effort on behalf of businesses, governments, and individuals around the world. A more sustainable and lucrative global economy is possible, but it will require lessening the impact that global warming currently has on our interconnected, interdependent economic system.
If reading this article about how global warming will affect the global economy has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!
It can be hard to keep track of all of the news happening around the world, such as how the global economy could impact the fight against change – but don’t worry, Greenly is here to keep you up to date on all of the latest climate news.
Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.