Economic Impacts Of Climate Change Research Articles

Effects of Innovation Capabilities on Organisational Sustainability: Evidence from an Emerging Economy

The role of businesses in sustainable development gained increasingly more importance, together with the increasing speed of technological advancements, in addition to the economic effects of climate change, pandemics, disasters, and wars. The capabilities of businesses allowing them to adapt to environmental conditions to use their resources and turn them into productive outputs efficiently are considered critical factors in achieving sustainable competitive advantage. Therefore, the present study aimed to determine the effects of businesses’ marketing, process, organisational, and product innovation capabilities on corporate sustainability. The data used in the present study, which has an explanatory research design, were collected from managers of 452 SMEs in an emerging economy (Turkey) using the non-random quota sampling method. During the data collection, a survey was carried out on the manufacturing firms operating in Kocaeli, Sakarya, Düzce, Yalova, and Bolu provinces in a region called TR42 in the Eastern Marmara region, which is an important industrial region in Turkey. During the data analysis, SPSS was used to obtain the descriptive statistics, and AMOS to obtain the inferential statistics. Within this context, covariance-based Structural Equation Modelling (SEM) was utilised to test organisational sustainability’s causal relationships with variables constituting the innovation capabilities. The results achieved here suggest that marketing, process, corporate, and product innovation capabilities have an effect that increases organisational sustainability. Furthermore, the results indicate that marketing innovation capability had a higher impact on organisational sustainability than other capacities constituting the innovation capability. The present study offers important interpretations and conclusions for businesses which operate in an emerging economy at the level of SME to improve their sustainability objectives in terms of resource, capability, and environmental adaptation.

Economic consequences of climate change impacts on the agricultural sector of South Asia: A case study of Sri Lanka

Scientific evidence suggests that agriculture will be adversely affected by climate change globally in the near future, with the countries and small islands of South Asia projected to be amongst the most vulnerable. This study uses the ORANI-G-SL, a single-country, static computable general equilibrium model to investigate the economic impacts of climate change-induced agricultural productivity changes on Sri Lanka, as a South Asian case study. In comparison with a baseline scenario, the results show reductions in the output of most agricultural crops will cause increased consumer prices for these agricultural commodities, with a consequential decline in overall household consumption within next few decades. The projected decline in crop production and increases in food prices will enhance the potential for food insecurity. Thus, climate change will negatively impact the overall GDP and most of the macro and microeconomic variables of the Sri Lankan economy. These results highlight the need for future scientific research on climate change adaptation strategies and the importance of developing policy responses to counter adverse effects on agriculture and food security.

Uncertainty constraints on economic impact assessments of climate change simulated by an impact emulator

Abstract Since many new generation Earth system models (ESMs) have been suggested to overestimate future global warming, the latest report of the Intergovernmental Panel on Climate Change used the constrained range of global warming instead of that in the raw ensemble. However, it is not clear how the constraints of climate change projections potentially reduce the uncertainty of impact assessments. Here, we show that the climate-related uncertainty of the economic impact of climate change in the world can be constrained. By applying an impact emulator, we estimate the economic impacts in nine sectors based on 67 ESMs’ future climate change projections and find that the impacts in eight sectors are closely related to the recent past trend of global mean temperature, which is the metric used for the constraint of global warming projections. Observational constraints lower the upper bound of the aggregate economic impact simulated by the single emulator from 2.9% to 2.5% of the world gross domestic product (the relative reduction of variance is 31%) under the medium greenhouse gas concentration scenarios. Our results demonstrate how advances in climate science can contribute to reducing climate-related uncertainties in impact assessments, while we do not examine uncertainties of emulators and impact models.

Assessing the economic effects of drought using Positive Mathematical Planning model under climate change scenarios

In recent decades, regions all around the world have experienced severe droughts adversely affecting their agricultural production. Climate change, along with limited access to water will alter future production and agricultural development. The purpose of this study is to provide a perspective for the future cultivation regime in the Divandarre region in the Sepidrood catchment in Iran, using historical climatic, agricultural, and economic information. Future precipitation values are determined for three climate scenarios, then downscaled and converted to pixel-based precipitation maps using the Moving Least Squares method. Future droughts are identified using the Standardized Precipitation Index at 3, 6, and 9-month intervals based on precipitation values and the relationship between different types of droughts (meteorological, agricultural and hydrological). We introduce a new coefficient, the water cost coefficient, derived from drought characteristics that captures the added irrigation cost in drought years because of increased water price. Using the Positive Mathematical Planning method and considering limited land and water, predicted future prices and costs based on a linear regression of supply-demand, and the annual water cost coefficient values, an agroeconomic model is built. After prediction of future price and cost based on historical data from 2005 to 2018, we run future scenarios based on various price and cost values to determine the optimal annual cultivation area for each crop from 2020 to 2040. All scenarios indicate a decline in cultivation area for all crops making agriculture less beneficial in the future. The cultivation regime moves away from more water-consuming products with less economic value (e.g. watermelon) toward less water-consuming, more expensive products (e.g. lentils). The findings of this model along with expert economic judgments help determine the economic effects of climate change on irrigation, farmers' decisions, and water policies, including water markets, and improving irrigation efficiency. Authorities and farmers could adapt to drought shocks and changes in the market while experiencing less revenue loss.

Climate risk and financial disclosure in salmon aquaculture

The growth of the salmon aquaculture industry has attracted an increasing number of investors. Investors are conscious of economic consequences of climate change for the salmon farming companies, hence their demand for climate-related financial disclosure has increased. This study discusses potential climate-related financial impacts imposed on the salmon aquaculture production as identified by the Task Force on Climate-related Financial Disclosure (TCFD). We use data from 2016 to 2021 available on the Carbon Disclosure Project (CDP) platform, and we show to what extent salmon aquaculture companies disclose their climate-related risks. We find that when the demand of investors for climate-related financial disclosure increases, more firms tend to comply with their requests, while based on the CDP’s evaluation system, the firms perform better in minimizing their carbon impact. We argue that when salmon aquaculture companies publish their climate-related financial disclosure, they ensure transparency for their investors and secure a smooth transition into a low carbon economy.

The economy of climate change in the regions of Kazakhstan and its impacts on AIC

Climate change affects the agricultural economy. Sustainable agriculture develops at the intersection of the environment and the economy. The economics of climate change addresses challenges such as improved growth and the climate. When negatively impacted, climate change affects productivity, drives up prices, and leads to more intensive management practices, land expansion, redistribution through international trade, and reduced consumption. According to statistics, over the past 30 years, the impact of temperature changes and the share of regional agro-industrial complex in the economy show that there are possible difficulties in the sustainable development of the country. The article discusses the analysis of regional processes of climate change, to study the economic consequences of climate change on the agriculture of the regions of Kazakhstan, to evaluate the system of measures to prevent the consequences of climate change. In preparing the article, data from the IPCC, WMO, WTO, FAO, UNEP, UNFCCC, UNDP, IMF, WB, OECD, KAZHYDROMET, reports of the Statistics Committee of Kazakhstan, etc. were used.

Энергетика и климатические изменения: моделирование взаимосвязей

Assessing feasibility and possible consequences of integrated energy consumption regulation requires the creation of hybrid model complexes that combine climate modeling, energy modelling and economic modeling as well as investment in the development of certain technologies and areas. These model complexes allow to build various long-term development scenarios for the world and individual regions and countries, to assess the impact of introduced policies and regulation methods on all stakeholders and on the economy and public welfare in general. The paper describes the basic approaches to modeling and also considers in detail the European set of models and the main results that it provides at the output. Taking into account this foreign experience in developing assessments of the economic consequences of climate change and decarbonization, according to the author, will be useful for Russia.

When threat is imminent, does character matter for climate action? Exploring environmental concerns, well-being, and character strengths in the Pacific Island Countries

Pacific Island Countries are particularly vulnerable to the environmental and economic consequences of climate change including both direct and indirect impacts on individuals’ mental health. There is a need to better understand the links between environmental attitudes, pro-environmental behaviours, and well-being in this region and to develop cost-effective, culturally informed interventions. The present study explored the level of environmental concerns and attitudes among Pacific Island university students and how this relates to their overall well-being, the nature of their current pro-environmental actions, and the potential for individuals’ character strengths to predict pro-environmental attitudes. College students ( n = 269) from six Pacific Island Countries completed a survey measuring their character strengths, well-being, and environmental support. As expected, the young adults had very high levels of concern about environmental threats, and this was related to their overall well-being. The young adults felt a personal responsibility to protect the environments around their local communities, which suggests national climate change strategies should be embedded within this localised context. Character strengths were highly valued among the Pacific Island sample and showed some association with (specifically) support for environmental actions and policies. Given the high levels of environmental concern in the sample, the character strengths approach likely provides a bridge between emotional engagement and active allyship in some individuals. Therefore, further research should investigate the role of character strengths in empowering pacific students to play a more leading role in policy change.

Transiting to green growth in fossil export‐dependent economies: A pathway for Africa

AbstractDivestment from fossil fuels has been at the heart of global climate discourse. For developing countries that have traditionally been less emitters and at the receiving end of the severest economic impact of climate change, a sweeping divestment could lead to serious socio‐economic and political consequences. African countries must collectively adapt energy transition to local context and pursue a pragmatic approach that ensures a gradual transition from fossil fuels to a green economy. The African Continental Free Trade Agreement (AfCFTA) presents a unique platform for Africa to achieve net‐zero emissions by continued investments in fossil fuels while drastically cutting emissions arising from current externalised supply chains because AfCFTA will promote cleaner regional supply chains. Africa's fossil fuel‐dependent economies must redirect current fossil revenues into creating non‐fossil‐based industries while making a gradual‐but‐steady shift from fossil fuel as the source of fiscal revenues. African Export–Import Bank (Afreximbank) is partnering with the African Petroleum Producers Organisation (APPO) to establish an institutional structure, the African Energy Transition Bank that will support African fossil fuel‐dependent economies to achieve a smooth and orderly transition to green economies.

Quantifying uncertainty about global and regional economic impacts of climate change

The economic impacts of climate change are highly uncertain. Two of the most important uncertainties are the sensitivity of the climate system and the so-called damage functions, which relate climate change to economic costs and benefits. Despite broad awareness of these uncertainties, it is unclear which of them is most important, especially at the regional level. Here we construct regional damage functions, based on two different global damage functions, and apply them to two climate models with vastly different climate sensitivities. We find that uncertainty in both climate sensitivity and aggregate economic damages per degree of warming are of similar importance for the global economic impact of climate change, with the decrease in global economic productivity ranging between 4% and 24% by the end of the century under a high-emission scenario. At the regional level, however, the effects of climate change can vary even more substantially, depending both on a region’s initial temperature and the amount of warming it experiences, with some regions gaining in productivity and others losing. The ranges of uncertainty are therefore potentially much larger at a regional level. For example, at the end of the century, under a high-emission scenario, we find that India’s productivity decreases between 13% and 57% and Russia’s increases between 24% and 74%, while Germany’s change in productivity ranges from an increase of 8% to a decrease of 4%. Our findings emphasise the importance of including these uncertainties in estimates of future economic impacts, as they are vital for the resulting impacts and thus policy implications.

The shocks of climate change on economic growth in developing economies: Evidence from Iran

Understanding the economic consequences of climate change has become necessary for economists as evidence indicates that climate is changing and will have detrimental consequences in the upcoming decades, especially in developing countries. Accordingly, this study examines the consequences of climate change on economic growth in Iran located in the mid-latitude belt of arid and semiarid regions on Earth. The present study implements a dynamic integrated assessment model to evaluate the potential impact of climate change on per capita output, per capita consumption, capital per worker, input prices, and welfare over the current century. Two classes of climate change scenarios from CMIP3 (A2 and A1B) and CMIP5 (RCP 4.5, RCP 6.0, and RCP 8.5) under two assumptions of damage function known as “W-damage” and “DS-damage” were examined. In addition, three channels of damage –current production, productivity growth, and capital depreciation–were investigated. In general, the simulation results revealed a significant effect on the selected variables. Nevertheless, the effects were strongly dependent on climatic scenarios and assumptions about the damage function. The consequences of climate change under DS-damage were far more considerable than those under W-damage. The effects of capital damage from climate change were also more significant compared to those of other damage channels. It was revealed that the fall in consumption and welfare was far higher than the corresponding output reduction. When climate change damages from all examined channels were considered, capital per worker was dramatically affected. In particular, under the DS-damage assumption, it tended to decline over the study horizon. This happens while the contribution of capital to production is lower than expected for developing economies.

Economic Impact of Climate Change on Food Crop Production using Ricardina Approach: A Case of Kellem Wollega Zone, Ethiopia

Background: Historical records and increased scientific consensus provide strong evidence that the global climate is changing. Future climate change would lead to an increase in climate variability and the frequency and intensity of extreme events. Agriculture that is dependent on climate conditions is inherently sensitive to climate changes. Today’s world agriculture has gone through challenges from population growth and has adapted to changing economic conditions, technology and resource availabilities. But uncertainty remains concerning the ability of agricultural systems to adapt to climate change. Thus, climate change adaptation of the essence for a resilient food crop production system requires economic transformation by arrangement of institutional and technology. Methods: This study uses the Ricardian model to examine the economic impact of climate change on agriculture in Kellem Wollega Zone, Ethiopia. The net farm revenue is regressed against climate variable (temperature and precipitation), soil and socio-economic variables to help determine the factors that influence variability in net farm revenues. The study was based on the data from a survey of 400 smallholder farming households interviewed across the zone. Result: The Ricardian model analysis shows the coefficients of summer, autumn and winter temperature are positive whereas the coefficient of spring temperature is negative. Regarding the precipitation, the coefficients of summer and spring precipitation are positive while coefficients of autumn and winter precipitation are negative. The marginal impact analysis results show an increase in summer and spring temperatures has mostly negative effects on net farm revenues implying that further temperature increases would be harmful to agricultural activities while increases in autumn temperatures increase net farm revenues in the study area. The summer and spring precipitation would increase the net farm revenue but the autumn precipitation reduces the farm revenue. The elasticity results show that net farm revenues are highly sensitive to changes in climate and the elasticity is relatively high for both summer temperature and precipitation. The impacts of climate change under the three special Reports on Emission Scenarios, (Canadian General Circulation Model, Hadley Centre for Climate Prediction and Research and Parallel Climate Model) predicted that by 2100 net farm revenues would decrease across all farms per hectare by US$ 942.83, US$ 1048.16 and US$ 1024.32 respectively. The finding suggests there is a great need for the concerned bodies to provide up-to-date information about climate change and rainfall patterns in the forthcoming season so that the farmers make informed decisions and develop adaptation strategies.

Climate Change and Its Impact on Agricultural Gdp Growth in Ethiopia: A Time Series Analysis

Climate change is now a global phenomenon with growth, poverty, food security, and stability implications, and is one of the greatest challenges the world is facing today. The economic impact of climate change mainly depends on the sectoral composition of the economy. That are certain sectors like agriculture are more sensitive to climate change and the associated variability. The main objective of this paper is to investigate the impact of climate change on agricultural gross domestic product growth in Ethiopia. This study uses time-series annual data from 1992/93to 2017/18 and, an effort is made to identify the long run and short-run impact of climate change in Ethiopia using an autoregressive distributed lag (ARDL) and error correction methods. The results of the study provide evidence that climate change and variability affect real agricultural gross domestic product growth negatively in the long run. The coefficient of the error term that captures the speed of adjustment toward the long-run equilibrium is found with the correct sign and magnitude. The overall findings of the study underlined the importance of building resilience to climate change and minimizing the adverse impacts of climate change to promote agricultural output and hence economic growth in Ethiopia.

Climate Change and Farmers’ Household Financial Vulnerability: Evidence From China

Climate change is one of the most severe threats to human survival and a significant factor influencing financial stability. Different from previous studies, this paper investigates the economic impact of climate change at the micro level based on data from China Meteorological Administration database, and China Household Finance Survey (CHFS) 2017 released in 2019. The empirical findings indicate that climate change contributes to the financial vulnerability of farmers’ households, which is confirmed following robustness tests. The mechanism analysis reveals that climate change has effects on rural households’ financial vulnerability via farmers’ health, credit availability, and agricultural output. Furthermore, the effect of climate change on farmers’ household financial vulnerability (HFV) is more pronounced in farmers with lower education levels. The changes in temperature and precipitation show different intensity effects in different areas, but all of them provide reasonable heterogeneity mechanisms. This paper’s policy value is demonstrated by the fact that it uncovers the effects of climate change on farmers’ HFV, information that may be useful for addressing climate change and rural financial stability.

Concurrent 7. Presentation for: Climate change litigation: directors’ duties, legal developments and risk management

Presented on Tuesday 17 May: Session 7 Climate change is being repositioned in commercial, financial and legal spheres as a matter that requires board-level strategic attention. With a broad-ranging consensus that climate change risks are material and reasonably foreseeable, activists are pursuing a myriad of legal challenges seeking to hold government and companies to account. As the law develops, a number of trends are emerging which will require companies and directors to adapt their response to climate-change-related risks. In particular, directors are required to adequately inform themselves as to the broader physical and economic consequences of climate change, to critically evaluate the implications for financial performance and risk management, to adapt their company’s strategic response, and disclose and report relevant information to stakeholders. These requirements need to be managed amid significant uncertainties and complexities about the impacts of climate change, and also as to realistic emissions reduction targets, offsetting, innovation, measurement and reporting methodologies. This paper outlines climate litigation trends to assist in equipping boards, directors and general counsel to understand and engage with their company’s exposure. In particular, we consider claims against government which are of relevance to companies, including challenges to project approvals on climate change grounds; as well as potential actions against companies, directors and advisors in respect of fiduciary duties, disclosures and greenwashing. To access the presentation click the link on the right. To read the full paper click here

Climate change litigation: directors’ duties, legal developments and risk management

Climate change is being repositioned in commercial, financial and legal spheres as a matter that requires board-level strategic attention. With a broad-ranging consensus that climate change risks are material and reasonably foreseeable, activists are pursuing a myriad of legal challenges seeking to hold government and companies to account. As the law develops, a number of trends are emerging which will require companies and directors to adapt their response to climate-change-related risks. In particular, directors are required to adequately inform themselves as to the broader physical and economic consequences of climate change, to critically evaluate the implications for financial performance and risk management, to adapt their company’s strategic response, and disclose and report relevant information to stakeholders. These requirements need to be managed amid significant uncertainties and complexities about the impacts of climate change, and also as to realistic emissions reduction targets, offsetting, innovation, measurement and reporting methodologies. This paper outlines climate litigation trends to assist in equipping boards, directors and general counsel to understand and engage with their company’s exposure. In particular, we consider claims against government which are of relevance to companies, including challenges to project approvals on climate change grounds; as well as potential actions against companies, directors and advisors in respect of fiduciary duties, disclosures and greenwashing.

Climate Change Impact Assessment for Future Wind and Solar Energy Installations in India

Solar and wind assets are climate-dependent and changes in climate will result in variations in their generation and intermittency. Developers of solar and wind parks in India have observed changes in climate conditions and variability in solar irradiation and wind profiles at the seasonal and year-to-year timescales. Future climate change perturbations, including monsoon shifts, could lead to lower-than-predicted wind and solar energy production and affect the economics of solar and wind assets. Regional climate models (RCMs) are the basis of climate impact assessments and the most trusted source of information to extract knowledge about future trends in climate variables. However, RCM projections are tainted with variability and uncertainty about the future trends. For India as a case study, we use the RCMs generated by the Coordinated Regional Climate Downscaling Experiment West Asia project (CORDEX WAS) to calculate individual wind, radiation, and temperature trends at selected sites; estimate wind and solar PV energy time series; and embed them in portfolio methods to test the impact of combining wind and solar assets on the variability of the total production and the uncertainty about the predicted production. We include a comparison of CORDEX RCMs with the ERA5 reanalysis dataset and conclude that all available RCMs reasonably simulate the main annual and seasonality features of wind speed, surface solar radiation, and temperature in India. The analysis demonstrates that the uncertainty about the portfolio return can be reduced by optimizing the combination of wind and solar assets in a producer portfolio, thus mitigating the economic impact of climate change. We find that the reduction obtained with a mixed portfolio ranges from 33 to 50% compared to a wind only portfolio, and from 30 to 96% compared to a solar only portfolio.

The Economic Impact of Climate Change on Wheat and Maize Yields in the North China Plain.

Climate change has significantly affected agricultural production. As one of China’s most important agricultural production regions, the North China Plain (NCP) is subject to climate change. This paper examines the influence of climate change on the wheat and maize yields at household and village levels, using the multilevel model based on a large panel survey dataset in the NCP. The results show that: (i) Extreme weather events (drought and flood) would significantly reduce the wheat and maize yields. So, the governments should establish and improve the emergency service system of disaster warning and encourage farmers to mitigate the adverse effects of disasters. (ii) Over the past three decades, the NCP has experienced climate change that affects its grain production. Therefore, it is imperative to build the farmers’ adaptive capacity to climate change. (iii) Spatial variations in crop yield are significantly influenced by the household characteristics and the heterogeneity of village economic conditions. Therefore, in addition to promoting household production, it is necessary to strengthen and promote China’s development of the rural collective economy, especially the construction of rural irrigation and drainage infrastructures.

Assessment of the Impacts of Climate Change on the Russian Arctic Economy (including the Energy Industry)

Ongoing climate change most pronounces itself in northern latitudes, including in the Arctic zone of the Russian Federation (AZRF). Climate change is a complex multidirectional process that is characterized by both positive and negative effects on the functioning of territorial economic systems. In this regard, an analysis of the impacts of climate change on economic development is a particularly urgent scientific and practical task that requires comprehensive study. This research was devoted to assessing the probable impacts of climate transformations on the parameters of the economic development of the AZRF regions. The authors created a methodological approach to the assessment of the costs of the effects of climate change for the economy of the AZRF regions, taking into account the average predicted dynamics of surface air temperature and key regional economic specializations, as well as the degree of susceptibility of various industries to the climate change. The energy industry was considered in particular detail since it is the basis for all of the other industries and is the guarantor of life support for the populations that live in the extreme Arctic climate. Calculations have shown that the accumulated economic effects of climate change as a whole for the AZRF economy during the period 2020–2050 will be negative and have been estimated as having a cost of more than RUB 8 trillion (or nearly USD 111 billion in 2020 prices), which would be about 3% of total Russian Arctic GRP in average annual terms.

The Economic Impact of Climate Change on the Local Apple

An unavoidable climate change has an impact on agricultural production. This study aims at determining farmers’ knowledge concerning climate change and farmers’ behavior in apple cultivation, as well as it aims at investigating the impact of climate change on apple productivity, environmental damage, and apple prices. Primary data were collected using structured interviews to farmers of apple. Structural Equation Model (SEM) is employed to analyze the effect of climate change on production, environment and price changes. The results showed farmers possessed knowledge concerning climate change based on information mainly received from television and their perceived experience. Climate change causes the increase of warmer air temperatures, drought, and the need for product facilities, like fertilizers and pesticides. However, it causes the decrease of apple production. Climate change has a significant negative effect on apple productivity and the economic value of apples. The environment also has a negative effect on apple productivity at a lower level of significance. During climate change, apple productivity has a negative effect on apple prices, It means that the higher the apple productivity is, the lower the apple price will be. Hence, climate change caused the impact of a decrease in the economic value of local apple agribusiness in Malang Raya.